Severe cash crunch in ATMs in several states

Mae Love
April 17, 2018

At a farmers' convention on Monday, the chief minister said that Rs 2000 currency notes are missing from the market even as the notes in circulation are more than pre-demonetisation.

"Currency in circulation is at Rs 18.29 lakh crore".

However, Minister of State for Finance SP Shukla has assured that there is no cash crunch and said government and RBI have formed committee to transfer currency where there is shortage. "It will be done in three days", Shukla told ANI.

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According to a report in the Business Standard, a recent analysis by the RBI to the finance ministry found that the rate of cash withdrawal was far more than the cash deposits in banks in states such as Andhra Pradesh, Bihar, Karnataka, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Telangana. When the cash shortfall was reported from Andhra Pradesh and Telangana in March, it was attributed by some to a misunderstanding of the Financial Resolution and Deposit Insurance Bill, which had a "bail in" clause where depositors would bear a portion of any losses. "News reports say that ATMs around the country are running of out cash. We need to pay for the admission of children and purchase groceries & vegetables". We have visited several ATMs today as well, to no avail, ' people in Bhopal said. ANI on Tuesday quoted people as saying in Bhopal that they have been facing cash crunch for the last 15 days as the ATMs are not dispensing currency notes. The Modi government on November 8, 2016 had announced demonetisation of high value notes, Rs 500 and Rs 1000, which together accounted for 86-87 per cent of the currency in circulation. The NSUI workers showed protest against Acche Din claims of Bhartiya Janata Party led Union Government.

Public sector bank executives also said there is a spurt in demand for cash to make payments for agricultural activities as well. "We have visited several ATMs since yesterday but it is the situation everywhere". This is a conspiracy to create problems. "Banks have been advised to optimise cash flow at ATMs well", a senior finance ministry official told the newspaper. "We are facing difficulty, don't know what to do", they said. ATMs dried up in north Bihar due to issues related to transportation of cash from currency chests located in other parts of the state, officials said. "We are facing a lot of inconvenience in this heat".

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