ATMs across the country start running dry
RBI ramps up printing of notes; Centre and banks downplay the impact
Mumbai/New Delhi April 17
“There is sufficient cash in the RBI vaults and currency chests,” a central bank statement said. “The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and the recalibration of ATMs being still under way.” The RBI, it said, is closely monitoring both these aspects.
However, the statement made no mention of ₹2,000 bank notes, which, according to a December 2017 State Bank of India research report, the RBI may either be holding back or may have stopped printing altogether.
Key factorsIndustry insiders said the cash crunch may have been triggered by the advent of the marriage and procurement season, and the uneven distribution of currency by the RBI across States. Others blamed the conversion of ₹2,000 cassettes in ATMs to ₹200 ones.
Radha Rama Dorai, Managing Director — ATM & Allied Services, FIS, said, “The cash-carrying capacity of ATMs has gone down in terms of value. Over long weekends clubbed together with holidays, ATMs tend to run dry. Refilling the ATMs on Sundays or holidays is difficult since banks are closed.”
The Centre and the banks chose to downplay the impact. The Finance Ministry said there has been an unusual spurt in currency demand in the past three months. In just the first 13 days of April, the currency supply increased by ₹45,000 crore. This unusual spurt in demand is seen more in some parts of the country such as Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, an official release said.
Restriction on withdrawalsInterestingly, currency in circulation (about ₹18.42 lakh crore) now is more than the pre-demonetisation level (around ₹17.72 lakh crore), and yet ATMs in Hyderabad and Chennai were virtually running dry. Customers in these cities were being asked to wait for hours to withdraw money. Restrictions on withdrawals have also been placed in some areas. For instance, a notice put up at an SBI branch in Osmania University reads: “Due to shortage of currency, withdrawals beyond ₹10,000 are not permitted.’’ However, inside the branch, customers were being allowed to withdraw even less.
The cash crunch put the ruling BJP on the backfoot as the Opposition described it as a continuation of the “demonetisation disaster”. West Bengal Chief Minister Mamata Banerjee wanted to know whether a “financial emergency” was in force.
“This government, which has still not been able to count the demonetised currency, is asking us to trust its jumla that there is no cash crunch… Demonetisation did not kill terrorism. It did not kill corruption or fake currency either. But it has certainly killed the Indian economy. The cash crisis tells us how Modi’s demonetisation is still wreaking havoc,” Sitaram Yechury, General Secretary, CPI(M), said.