Economy

ATM cash crunch sparks oppostion uproar, comparison to note ban

ATM cash crunch sparks oppostion uproar, comparison to note ban

However, Finance Minister Arun Jaitley has taken cognizance of the matter and has assured citizens that there is no shortage of funds in circulation.

The currency in circulation in the country has reached the pre-demonetisation level of about Rs 17 lakh crore, according to a report by Reserve Bank of India (RBI). "This should give you assurance that we are geared up to meet the rising demand", he said.

However, to meet the shortage of cash, RBI has ramped up printing of notes in all the four presses, it said.

The incidents were observed initially in the Southern states of Telangana, and Andhra Pradesh among others, and have now been joined by Bihar, Uttar Pradesh, Chattishgarh, Gujarat, Delhi and Madhya Pradesh.

In some states, this has led to a run on banks from where people are withdrawing deposits and collecting cash, especially, in Rs.2000 notes so as to hoard it easily at home. Nirav Modi fled with Rs30,000 crore and the PM didn't utter a word.

Finally, the liquidity issues that were introduced as a result of the Rs 2,000 note could still be lingering, with the reported increase in Rs 100 and smaller-value bank notes not picking up enough slack. "In Maharashtra and Mumbai, there is no cash crunch as far as SBI is concerned", Kumar told NDTV. She also wondered whether there was a "financial emergency" in the country.

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In response to the Finance Minister, KT Rama Rao, a minister in the Telangana cabinet, said that this was an issue being faced by customers for the last three months. While the reports indicate that Rs 2,000 notes are disappearing, the Centre admitted that there is an acute shortage of Rs 500 notes, adding that it would take a week to up the supply. "We have visited several ATMs today as well, to no avail". In next couple of days, we'll have a supply of about 2500 cr of Rs 500 notes per day.

"I have reviewed the currency situation in the country". There is one problem that some states have less currency and others have more.

People in Bhopal say, "We are facing a cash crunch".

Reacting on the cash crunch situation in the country, the Finance Minister Arun Jaitley on Tuesday said that the shortage is temporary and is being tackled quickly. "The government will act tough on this". As a rule, cash supply must grow at the same rate as the economy is growing and the government was obliged to provide as much cash as people need at any given time, Chidambaram said in a series of tweets.

While it is hard to trace any specific reason for such massive cash withdrawals this year, analysts say that concerns over the health of India's banking system has also triggered savers to withdraw cash.


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