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Posted at: Apr 17, 2018, 11:33 AM; last updated: Apr 17, 2018, 8:50 PM (IST)

ATMs run dry; FM says temporary, RBI blames logistical issues

ATMs run dry; FM says temporary, RBI blames logistical issues
A security guard stands inside an out of service ATM in Bhopal on Tuesday. Most of the ATMs in the city are either out of service or run out of cash. PTI photo

Bhopal/ Amethi/Kolkata/Ahmedabad,  April 17

A large number of ATMs failed to dispense cash to customers for the second consecutive day on Tuesday in many cities and towns in at least six states—Gujarat, Eastern Maharashtra, Madhya Pradesh, Bihar, Andhra Pradesh, Telangana and even poll-bound Karnataka.

People have been complaining about non-availability of cash since morning in ATMs.

In a situation reminiscent of the early days of the central government's scrapping of high value notes in November 2016, people queued up outside ATMs in an attempt to withdraw some money.  

It was also reported that most of the ATMs were out of service and one could only withdraw a little amount from a working ATM and that too after spending much time standing in a queue.

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In Madhya Pradesh, a large number of ATMs were empty and there were long queues at others where cash was still available.

Gujarat, Telangana and Andhra Pradesh meanwhile have reportedly been facing cash crunch for the past few days.

As his government came under fire for poor management, Finance Minister Arun Jaitley said there is "more than adequate" currency in circulation and the temporary shortage in certain states is being "tackled quickly".
Overall there is more than adequate currency in circulation and also available with the Banks. The temporary shortage caused by 'sudden and unusual increase' (in demand) in some areas is being tackled quickly," Jaitley said.

Minister of State for Finance Shiv Pratap Shukla said the government has formed a committee to address the problem of currency shortage in certain states and the issue would be resolved in next 2-3 days.

"The government has set up state-wise committee and RBI has also formed a committee to transfer currency from one state to other because for money transfer you need the permission of the RBI. It (the shortage) will be solved in 2-3 days," Shukla said. 

Adequate supply

At a hurriedly-called press meet, Economic Affairs Secretary SC Garg, said: "There is no cash crunch in the country. There is around Rs 18 lakh crore currency supply now, which is close to the circulation during the demonetisation period. We keep Rs 2.5-3 lakh crore more currency in stock for excess demand." He said there was unusually high demand for currency in the last couple of months. As opposed to an average demand of about Rs 20,000 crore a month, "in the first 13 days of April itself there was a demand of Rs 45,000 crore", he said.

In the last few days the government has pumped cash into the system to meet the demand, he said. "We still have a reserve of Rs 1.75 lakh crore." "We have taken steps to increase the supply of currency in case the demand were to go up further. To give you an example, Rs 500 notes—we print about 500 crore of notes per day. We have taken steps to raise this production five times," Garg said.

"Very soon, in the next couple of days, we will have a supply of about Rs 2,500 crore worth of Rs 500 notes per day. In a month, supply would be about Rs 70,000-Rs 75,000 crore. These notes alone can more than meet the demand of any month," he said.

Garg attributed the sudden cash demand to localised phenomena.

"This unusual spurt in demand is seen more in some parts of the country like Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar," the Finance Ministry said in a statement on Tuesday.

The RBI bank also denied cash shortage, instead saying it was due to logistical issues.

"There is no currency shortage. It is clarified at the outset that there is sufficient cash in the RBI vaults and currency chests. Printing of the notes has been ramped up in all the 4 note presses," RBI says in its statement on Tuesday evening.

"The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and the re-calibration of ATMs still underway. RBI is closely monitoring both these aspects."

'Conspiracy'

MP Chief Minister Shivraj Singh Chouhan claimed there was a conspiracy afoot.

Speaking at Shajapur, Chouhan, a BJP leader, said: "It is a conspiracy. Certain persons are hoarding Rs 2,000 notes to cause a cash crunch. When demonetisation was announced in 2016, there was Rs 15.50 lakh crore in circulation in the market. Now, this figure is Rs 16.50 lakh crore. Where are the notes of Rs 2,000 denomination going?" State Finance Minister Jayant Malaya admitted to currency shortage but maintained that black marketing of Rs 2,000 notes could not be ruled out.

In Gujarat, cash shortage exacerbated on Tuesday, with several ATMs and banks running dry, especially in villages and the tribal belts.

Deputy chief minister Nitin Patel, who is also the state finance minister, acknowledged that banks are facing cash crunch and said the government is in touch with the RBI to ensure enough cash is supplied to banks.

Bank officials said they are getting only one-tenth of the required cash, leaving them helpless to replenish the ATMs.

The shortage has especially affected farmers involved in cumin business, they said.

In Bihar, where cash has been in short supply in banks for almost a week, Finance Minister Sushil Modi he was sure that the crisis would be resolved soon.

"There has been a cash crunch at banks in Bihar since 5-6 days. I spoke to officials at both RBI and banks. They said the problem will be sorted in the next few days. Reserve Bank of India says shortage of supply has caused the problem," Modi said.

Opposition attacks

Congress President Rahul Gandhi said the "terror of note-ban" has again gripped the country due to reported shortage of cash in several states and accused Prime Minister Narendra Modi of destroying the country's banking system with his demonetisation decision.

The Congress chief, who is in his Parliamentary constituency Amethi, took to Twitter to attack Modi, alleging he "snatched" the Rs 500 and Rs 1000 currency notes from every Indian's pocket and "gave" it to Nirav Modi, but was neither speaking a word about it nor facing Parliament.
"Modi ji has destroyed the banking system of the country," Gandhi said on the reported cash crunch in some ATMs.

He alleged that Narendra Modi did not speak a word "after Nirav Modi fled the country with Rs 1,000 crore".

"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 pocket and put it in Nirav Modi's pocket. He fears standing in Parliament too," he said.

The terror of “noteban” has gripped the country again as the cash in various banks has gone dry, Gandhi alleged and used the hashtag "CashCrunch" with his tweet in Hindi.

"Understand the deceit of Noteban, 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.

Congress communications in-charge Randeep Surjewala also took a dig at the prime minister, saying "while the 'saheb' is enjoying abroad, the country's people are looking for cash in banks".

West Bengal Chief Minister Mamata Banerjee said the situation reminded her of the demonetisation days and wondered the country was gripped by a "financial emergency".

"Seeing reports of ATMs running out of cash in several states. Big notes missing. Reminder of #DeMonetisation days. Is there a Financial Emergency going on in the country? #CashCrunch #CashlessATMs," Banerjee tweeted.

RBI report shows that the currency in circulation in the country has reached the pre-demonetisation level of about Rs 17 lakh crore. — Agencies 

 

 

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