Published: Tue, April 17, 2018
Culture&Arts | By Laurence Reese

Demonetisation deja vu: Cash crunch hits multiple states as ATMs run dry

Demonetisation deja vu: Cash crunch hits multiple states as ATMs run dry

While several states across the country have reported instances of ATMs going dry, the government has asked for at least three days to mitigate the lack of availability of currency.

Cash-starved customers in large numbers started queuing up outside ATMs and banks since early Tuesday morning to withdraw currency notes from vending machines, but majority were either out of service or had a board notifying "no cash". Jaitley took to micro-blogging site Twitter and said that the shortage is "temporary" and that it has been caused due to "sudden and unusual increase" (in demand) in some parts of the country. The Reserve bank of India held a meeting, in which a committee discussed the crisis and how to overcome it. Minister of State for Finance, SP Shukla has stated that the situation has arisen because some of the states have low reserves of cash, which makes the it hard for some areas to maintain the high quantity of cash. "We've cash currency of Rs 1,25,000 crore right now". Some states have less currency and the others have more. "It'll be done in 3 days", Shukla said. Similar reports have come from other cities in several states. ATMs are not dispensing cash.

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Media reports talked about currency shortage in several areas in Telangana and Andhra Pradesh in the last few weeks. Reportedly, RBI has directed banks with surplus cash to help other banks facing a shortage of funds.

According to reports, officials of the Finance Ministry held a meeting with the Reserve Bank of India to take stock of the situation. After the demonitisation exercise, the currency in circulation increased to Rs. 16,50,000 crore. Currency notes in circulation are now at Rs 18.04 trillion. "But notes of Rs 2,000 are missing from the market". Even though the government clarified that there could be no such outcome, the rumour drove people to ATMs and bank branches to withdraw money, according to a report on economictimes.com.

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"Prior to note ban on November 8, 2016, the total value of Rs 500 and Rs 1000 denomination notes in circulation was Rs 17.74 lakh". Who are the persons creating shortfall of cash?

The government has assured that the issue will be resolved soon. "The government will act tough on this", the Madhya Pradesh Chief Minister said.

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