India Tries to Cool Cash-Shortage Concerns

Representative

The no cash complaints are coming from various regions including Delhi, Noida, Madhya Pradesh, Karnataka, Maharashtra, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh and Telangana.

Blaming "unusual demand" for currency shortages in some areas, the government on Tuesday announced it has chose to increase printing of Rs 500 notes by five times. But there has been an unusual rise in currency demand in the last three months.

"At the time of demonetisation, the currency in circulation was Rs 17.5 lakh crore and currency in circulation now is Rs 18 lakh crore". He tweeted, "Have reviewed the currency situation in the country".

Currency withdrawal by individuals during January-March 2018 was at 1.4 trillion rupees, sharply higher than 1.1 trillion rupees in the same quarter of 2016, according to Reserve Bank of India data.

The finance ministry meanwhile noted, "There are reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country".

Telangana IT Minister, K. T. Rama Rao, in response to Mr. Jaitley's tweet said, "Sir, with due respect the cash shortage in Banks & ATMs is neither sudden nor temporary".

The Manipur government also wrote a letter to the finance ministry apprising them of acute shortage of cash in the state.

Even as India was in a festive mood celebrating Vishu and Baisakhi, ATMs across the country went offline. It cited bank officials' statements that people have been withdrawing cash more than they require at the beginning of the month.

Only 8% of the ATMs in the country have been having enough cash.

Severe cash crunch has been reported from across the country.

Most private sector banks are running short of cash and this has also made maintaining the ATMs an uphill task for us. Nirav Modi fled with Rs 30,000 crore and the Prime Minister didn't utter a word. While there's not much crisis in Delhi-NCR, the government claimed that the situation was improving in states hit by massive cash crunch. "At some places, people were standing in long lines but many, including myself, had to return empty handed as the machine ran out of cash in a matter of less than half an hour", said Abhay Singh, a small vendor on Jagdeo Path. Today, Rs 16.5 lakh crore currency notes have been printed and circulated. To give you an example, Rs 500 notes - we print about 500 crore of notes per day.

"However in FY18, the pace of circulating Rs 200 denomination increased manifold, as has happened with with notes of smaller denomination". It is a conspiracy to create problems.

Reacting to the situation, West Bengal Chief Minister Mamata Banerjee on Tuesday said it reminded her of the demonetisation days.

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