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Ghost of demonetization returns with reports of cash crunch across the country

ATMs around the country have been running dry over the last week and dredged memories of long queues during demonetization in November. Reserve Bank of India (RBI) deputy governor SS Mundra attributed the lack of cash to the financial year closing and said that the situation is temporary, as indicated by this Indian Express report.

MediaNama’s writers checked in a number of ATMs in their respective neighbourhoods and found many shutters down or signs which said that there was no cash. In Mulund West, ICICI Bank, Kotak Mahindra Bank, State Bank of India and HDFC Banks were not filled with cash over the weekend. Similar reports were reported in Bangalore as well.

Meanwhile, the Times of India reported that only a handful ATMs out of 400 were dispensing cash in Bareilly. Bank officials said the amount made available to us by the RBI could only meet day-to-day banking requirements at branches and there was no money in off-site ATMs.

Kerala also reported cash shortfall and many of SBI’s ATMs were out of money.  Kerala government’s finance minister TM Thomas Isaac warned that currency notes shortage could hit salary and pension disbursals. In Nagaland, many SBI ATMs were hit again as there was no cash in the SBI main branch which acts as a depot for the RBI  with no money supply coming from the RBI branch, Guwahati.

The Economic Times reported that about 60% of ATMs in Mumbai are running and many of them are running out of cash quickly as they are being loaded only at one-third capacity. It added that only Rs 10 lakh is being loaded into ATM machines against a maximum capacity of Rs 30 lakh.

Recently, a question was raised in the Lok Sabha which asked if the RBI was facing difficulties in replenishing cash. The finance ministry replied that the RBI will continue to supply cash “as much as is required consistent to its stocks.” The ministry added that the RBI will make sure that at least 40% bank notes are supplied to rural areas to mitigate the issue.

RBI data: Moneycontrol added that currency circulation was at Rs 22,190 crore for the week ended Marck 31 and decreased 31.65% from Rs 32,470 crore for the week ended Marck 24.

 

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