Serving as a stark reminder of demonetisation and its immediate aftermath, ATMs across the country reportedly ran out of cash, with banks putting up notices stating their ATM kiosks are not functioning.
The problem seems to have affected ATMs in cities and towns in Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan and Uttar Pradesh, leading to a monetary crisis since last week, causing inconvenience to the locals.
The crunch in Gujarat worsened on Tuesday with several ATMs and banks running dry in villages and tribal belts. Deputy chief minister Nitin Patel, who is also the state finance minister, acknowledged that banks are facing a cash crunch and said the government is in touch with the RBI to ensure enough cash is supplied to banks.
Many ATMs seen 'out of service' in Patna, locals say, 'have been taking rounds of ATMs since last three days but cash is still not available. Facing a lot of inconvenience in this heat' #Bihar pic.twitter.com/hBXwBq6SNv
— ANI (@ANI) April 17, 2018
Commenting on the sudden cash crunch, Finance Minister Arun Jaitley assured hassled customers that the government will resolve the problem "quickly". Minister of State for Finance, SP Shukla, said the Centre needs three days to fix the problem. Separately, however, State Bank of India chairman Rajnish Kumar told CNBC-TV18 that there is sufficient cash in the system.
Have reviewed the currency situation in the country. Over all there is more than adequate currency in circulation and also available with the Banks. The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly. — Arun Jaitley (@arunjaitley) April 17, 2018
Shukla said, "We have cash currency of Rs 1,25,000 crore right now. There is one problem that some states have less currency and others have more. The government has formed state-wise committees and the RBI also formed committees to transfer currency from one state to other. It will be done in three days."
Delay in recalibration of cash vending machines to dispense Rs 200 notes is understood to be one of the reasons for the currency shortage. Following the introduction of Rs 200 notes by the Reserve Bank of India (RBI), it was decided that recalibration of ATMs for new notes would be done at a faster pace, sources told PTI, adding that the drive had started soon, but was delayed in some parts of the country.
The RBI said shortage "may be felt" in some pockets largely due to logistical issues of replenishing ATMs frequently and recalibration of ATMs still being underway. Meanwhile, the printing of Rs 2,000 notes has also been halted for a past few days.
"There is no need for supplying Rs 2,000 notes as it is in over supply. The total worth of Rs 2,000 notes in the system is Rs 7 lakh crore. This is a huge number, and the supply of Rs 2,000 notes beyond this is not required. Rs 2,000 notes are not being printed since the last few days," economic affairs secretary SC Garg said on Tuesday. "What was required we have printed and put it in the system. Besides, lower denomination currency notes are in over-supply."
When asked if upcoming elections can be a reason for the cash shortage, Garg said it's only Karnataka which will go to polls, but the issue was seen elsewhere too. He added that some of the ATMs may have some problems, but these are temporary phenomena. "On any given day, one percent of ATMs are usually out of order. And it could be a local management issue, not a countrywide phenomena," he added.
The current crop cycle season is also being suggested as another possible reason for the crunch. Owing to the cropping season in Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, large numbers of farmers in those states are withdrawing cash for transactions, contributing to the resultant shortage. Another reason cited is that people in rural areas continue to transact in cash, as the technology for digital transactions in the hinterland remains woefully inadequate.
Madhya Pradesh chief minister Shivraj Singh Chouhan, while claiming Rs 2,000 notes were vanishing from the market, alleged a "conspiracy". "Where are these notes of Rs 2,000 denomination going? Who is keeping them out of circulation? Who are the persons creating shortfall of cash? This is a conspiracy to create problems. The government will act tough on this," he said.
Congress president Rahul Gandhi said the "terror of noteban" has once again gripped the country, and accused Prime Minister Narendra Modi of destroying the country's banking system with his demonetisation decision. "The prime minister has not uttered a single word after he made the entire country stand in a queue, snatched Rs 500 and Rs 1000 currency notes from your pockets and put it in Nirav Modi's pocket. He fears standing in Parliament too," he said.
"Understand the deceit of note ban, your money in Nirav Modi's pocket. Modiji's 'Mallya maya', the terror or noteban is again spreading. The country's ATMs are again empty, what has been done to the country's banks," he tweeted.
With inputs from PTI
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Updated Date: Apr 18, 2018 09:44 AM