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The cash crunch at ATMs: Rs 2,000 notes being hoarded…

New Delhi,

The citizens of India in several parts of India seems to have once again the problem of cash at the ATMs. Andhra Pradesh, Telangana, Karnataka, Bihar and Madhya Pradesh, prompting the government and Reserve Bank of India to swing into damage control mode to calm jittery depositors.

the government attributed it to an “unusual spurt in currency demand”, While the public searching for a reason of the cash crunch, But there is no official explanation for this.

Several bank officials said “a lot of 2,000-rupee notes were not coming back to banks, leading to speculation that they were going into the black economy, perhaps as they take less space to stock and are easier to transport. One theory doing the rounds is that cash is being hoarded by political parties and their supporters in the run-up to the Karnataka elections next month.”

While finance minister Arun Jaitley said “there was a ‘sudden and unusual increase’ in demand in some parts of the country,” the opposition on the issue P Chidambaram said “supply had been ‘arbitrarily reduced’. His party chief Rahul Gandhi linked the problem to the Nirav Modi fraud and demonetization

government said “currency supply had risen to Rs 45,000 crore during the first 13 days of April from Rs 7,140 crore in the previous fortnight and Rs 33,000 crore in the comparable period prior to that. on an average, over Rs 10,000 crore was being placed in ATMs every day, compared to Rs 6,000-7,000 crore before demonetisation which suggests that despite the push to go digital, the appetite for cash remains undimmed.”

The shortage first surfaced in Andhra and Telangana home to some of the country’s biggest contractors, and contractors, it is often said, like cash. The shortage gradually spread to some other parts of the country with MP CM Shivraj Singh Chauhan acknowledging the problem on Monday.

Bihar deputy CM Sushil Modi said “The RBI said there was a shortage of supply of currency notes, due to which the cash crunch occurred. But they have assured us that the problem will be resolved in the next day or two,” Gujarat deputy CM Nitin Patel, who is also finance minister, acknowledged that banks were facing a cash crunch and said the government was in touch with the RBI. RBI, however, maintained there was no shortage of cash. “It is clarified… there is sufficient cash in the RBI vaults and currency chests.”

Nevertheless, printing of the notes has been ramped up in all the four note presses.

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