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The precautionary behaviour in cash usage is also evident from the excess financial savings of households, which rose to 15.5 per cent of the Gross National Disposable Income (GNDI) in 2020-21 from 11.7 per cent a year ago. The analysis also suggests that for transaction purposes cash is being increasingly substituted by digital means.
The transactional use of cash has been on a decline and is increasingly getting substituted with digital modes of payments, even as the store-of-value role of cash remains intact, said the paper.
Cybersecurity, customer protection, and cost-effectiveness are essential for sustaining the momentum towards digital payments pushed by the Covid pandemic, said Reserve Bank paper on Tuesday. The transactional use of cash has been on a decline and is increasingly getting substituted with digital