ATMs run dry: RBI, finance ministry were warned of cash crunch in March, but bank didn't act on Andhra tipoff

New Delhi: Almost one-and-half months before the currency crisis exploded causing much distress to the aam aadmi, the Andhra Pradesh government had warned the Reserve Bank of India (RBI), Ministry of Finance and the State Bank of India (SBI) about the lurking threat. Top sources said the Andhra Pradesh chief secretary Dinesh Kumar had written a communique on 9 March, 2018 about the currency crunch in certain pockets of the state and subsequently the Centre asked the RBI to take appropriate action.

Representational image of people queueing up before an ATM. PTI

Representational image of people queueing up before an ATM. PTI

When contacted Kumar confirmed that he had written the letter to all three — RBI, finance ministry and SBI.

"We were facing currency crisis in certain rural areas so I wrote a letter to resolve it. That was almost one and half months ago," Kumar told Firstpost.

Why did the RBI not act? This may sound cliche in the mid of ATMs running dry but a senior RBI official at its Mumbai-based head office refused to respond to the query saying the government has already issued a statement and RBI is not in a position to reply to the Andhra Pradesh chief secretary's letter.

Another RBI official at its regional centre in Hyderabad on the condition of anonymity said they had several rounds of meeting on Monday as well as Tuesday to ensure that currency chest are operating as per the norms.

Firstpost has learnt that the state of Telangana had also warned about currency crisis in certain areas of the state in March. A missive, sources said was sent to RBI and the finance ministry. Subsequently, a communique was sent from Jharkhand as early as last week. Despite repeated attempts, the chief secretaries of both the states were not available for the comment. However, an official from the RBI regional office in Patna said a letter was issued to all the banks last month to ensure that all the branch have enough cash and ATMs are refilled regularly.

"We had received complaints in March that ATMs in two bordering areas of Bihar—Katihar and Purnea—are running dry so issued a directive to the banks to ensure enough cash. I can assure you that all the currency chest have sufficient money and on an average, there is eight to 10 remittance from the chest," he told Firstpost requesting anonymity.

Questions are also being raised about the vanishing of Rs 2,000 notes with Madhya Pradesh chief minister Shivraj Singh Chauhan calling it a conspiracy. Chauhan had indicated that some people are keeping the highest denomination note to create a crisis.

ATm Map of India

Who are hoarding the Rs 2,000 notes? A senior officer closely monitoring a hawala case cracked by Rajasthan Anti-Terror Squad (ATS) said there could be massive illegal network behind the vanishing Rs 2,000 notes besides other issues at the RBI and banks' level. The Rajasthan ATS after a sustained two-months long surveillance on one of the modules had seized Rs 4 crore that was going to Ahmedabad from Delhi. The officer disclosed that out of the seized money Rs 3 crore were in Rs 2,000 notes. He further said that Bhilwara was the nodal point for the module that was operating an illegal transaction of huge cash in the four states of Delhi, Rajasthan, Gujarat and Madhya Pradesh.

“We have been able to nab just one module but intelligence input suggests there are several modules operating in other states as well. We have roped in the Income Tax Department as well as other agencies to unearth the entire chain. More details may come out after the interrogation of some suspects picked up by the agencies," the officer further said.


Updated Date: Apr 18, 2018 15:09 PM

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