Banks note growing population demand for cash

Banks note an increase in the population’s demand for cash, which is reflected in an increase in the average receipt for ruble withdrawals at ATMs. Experts believe that this is due to the “typical reaction of citizens to periods of instability,” when they prefer to keep their savings at home. In 2024, the demand for cash may decrease if the key rate and inflation decrease.

According to Russian Standard Bank, last year the average withdrawal amount from ATMs increased by a quarter: it amounted to 35 thousand rubles. against 28 thousand rubles. in 2022. The average bill for depositing funds through an ATM into your accounts in 2023 remained almost unchanged – 11.9 thousand rubles. versus 11.3 thousand rubles.

The bank clarifies that Russians more often deposit money through ATMs than withdraw them – in 2023, 76% of the total number of transactions were for replenishing accounts through ATMs, and only 24% for receiving funds, and this ratio has not changed since 2022. “Increasingly, modern ATMs are used for loan payments, replenishing their accounts, in order to later pay receipts for housing and communal services and so on in the Internet bank or mobile bank,” explains Russian Standard.

Sberbank noted that the peak days for cash withdrawals in 2023 traditionally fell on the pre-New Year days, December 28–29. At the same time, the growth of cash withdrawal transactions from ATMs in December 2023 compared to December 2022 was about 9%. In general, at the end of the year, Sberbank noted “a similar increase in turnover through ATMs.” “The growth in cash withdrawals from ATMs is due to an increase in wages and money supply,” the credit institution believes.

VTB considers the trends for 2023 to be an increase in the number of transactions for depositing cash in devices and an increase in the average transaction receipt. The bank associates this with the active growth of the lending market in the first half of 2023: clients deposit the funds received into an account to repay loans, and at the end of the year they actively opened deposits and savings accounts at ATMs.

Data from banks on the growth of cash withdrawals from ATMs are confirmed by statistics from the Central Bank. Thus, according to the Bank of Russia, in three quarters of 2023, citizens withdrew 24.1 trillion rubles from ATMs, and in the three quarters of the previous year – 21.4 trillion rubles. (an increase of 12.4%). According to the vice-president of the Association of Russian Banks, Alexey Voylukov, in 2023 the volume of cash in circulation increased by 12%, which is comparable to the growth in the first three quarters of 2023 in the volume of cash withdrawn by the population using plastic cards.

Mr. Voylukov clarifies that the average receipt for cash withdrawals from cards for January-September 2023 was about 16.2 thousand rubles, while for the same period in 2022 did not exceed 13.5 thousand rubles. (growth more than 20%). “Cash is increasingly used for large transactions and for storing money at home in a glass jar,” says Alexey Voylukov. The dynamics of cash volumes in 2024, he believes, depends on “how the Bank of Russia will adjust the key rate.”

At the end of 2023, transactions at ATMs reflected the growing trend in demand for cash, characteristic of periods of economic instability, says Roman Prokhorov, head of the board of the Financial Innovations Association. “The need for cash is due to both large acquisitions – real estate, vehicles, as well as repair work and construction, as well as savings in both foreign currency and rubles,” he explains. “At the same time, this year the need for cash should decrease in relation to by 2023, taking into account the reduction in inflationary pressure and reduction in consumer demand.”

The head of the Association of Electronic Money and Money Transfer Market Participants, Viktor Dostov, notes that the trend of increasing cash withdrawals was noticed in various banks some time ago. “There are several hypotheses, I like the assumption that large amounts are withdrawn to transfer money between their accounts in different banks without SBP commission, and since the law on free transfers between their accounts will soon begin to work, the hypothesis can be tested,” he says. The second assumption, according to Mr. Dostov, is that cash is used to purchase cash currency.

Maxim Builov