Published: Thu, April 19, 2018
Money | By Armando Alvarado

Reports of 'crunch' lead to queues outside ATMs

Reports of 'crunch' lead to queues outside ATMs

Cash shortage has been reported from several parts of the country including states such as Andhara Pradesh, Telangana, Karnataka, Bihar, Jharkhand, Madhya Pradesh, Rajasthan and Uttar Pradesh.

The clouds of demonitisation have not cleared yet India faced the worst cash shortage across the nation with ATMs going dry and people running from one point to another.

Dismissing the statement of the Reserve Bank of India that there was no shortage of currency in the system as "unsatisfactory", the senior Congress leader said if the RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage. "Main banks like SBI, Bank of Baroda, Union Bank of India, Central Bank, ICICI, HDFC have confirmed availablility of enough cash in their currency chests", an official spokesperson said.

Seeking to assure the public, Finance Minister Arun Jaitley said on Tuesday that he has reviewed the situation and the government would fix the problem quickly.

There is also a perception that there may be shortage of currency in the future.

Another RBI circular said banks should consider using lockable cassettes in their ATMs which shall be swapped at the time of cash replenishment. Economic Affairs Secretary Subhash Garg said that printing of Rs 500 notes has been ramped up.

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The shortage has been blamed on inadequate availability of Rs 2,000 currency notes, and the fact that ATM cassettes have not been configured to dispense smaller Rs 200 notes.

"As ATMs have to be replenished more frequently, it can lead to the conjecture that cash is not available", the report added.

The fear of suffering after demonetisation still haunts the general public and non-dispensation of cash from cash-starved ATMs has forced to withdraw more than the needed amount. But there has been an unusual rise in currency demand in the last three months. The response to the query said, "To print Rs 2,000 currency notes no demand has been made by the RBI to the SPMCIL". However, this ATM is only dispensing Rs. 2,000 notes.

Officials said that re-calibration of ATMs to fit Rs 200 notes has been slow due to inadequate supply of these newly introduced notes.

A year and half after currency notes of RS 500 and Rs. 1000 denomination, representing over 85% of cash in circulation, were withdrawn, not one of the stated objectives of demonetisaion has been fulfilled.

As a share of the economy, cash in circulation is about 11 per cent, lower than the 12 per cent before the demonetisation drive. According to media reports, printing of Rs2,000 notes was stopped at about 350 crore notes with a value of Rs7 lakh crore.

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