Published: Wed, April 18, 2018
Finance | By Loren Pratt

India's ATMs are running out of cash

India's ATMs are running out of cash

Currency with the public excludes cash with banks, while currency in circulation includes notes in circulation, rupee and small coins, and deposits with commercial banks in current and savings accounts. "We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far", the finance ministry statement said.

Meanwhile, reports of cash shortages and dry ATMs are also coming from Mumbai and other parts of Maharashtra besides the states listed above and the Modi government is being attacked by various opposition party leaders. There is one problem that some states have less currency and others have more.

"The ghost of demonetization has come back to haunt the government/RBI". "Out of 9,679 PNB ATMs, there is a 90 per cent availability of ATMs which is normal". The fate was similar in ATMs of Corporation Bank (MG Road), South Indian Bank (Ganga Nagar), Citibank, Bank of Baroda ATM near Garuda Mall, Canara Bank ATM on Cunningham Road, SBI and HDFC bank ATMs on Dinnur Road. As more and more people started withdrawing money, banks experienced a shortage of currency notes.

Speaking to the media, SBI authorities informed that the bank had to make "internal arrangement of cash from Basar and Seppa branches" to address the cash deficit in the capital complex. Economic affairs secretary Subhash Chandra Garg said the printing of Rs 500 notes would be stepped up five-fold to around Rs 2,500 crore a day to deal with the shortage.

"In certain states, the demand has gone up". Efforts are being made on a continuous basis to improve the cash availability further in a few geographies. Mr Garg said, in a month, supply will be about 70 thousand to 75 thousand crore.

"As of March, the currency in circulation was Rs 18.29 lakh crore as against Rs 17.89 lakh crore just before demonetisation", he added. While the growth in currency has been nearly flat (compared to the day before demonetisation), the need for currency has shrunk considerably because of the high level of digitisation. "I support digitization, but government can not force the pace of digitization or arbitrarily reduce the supply of cash". "ATMs were empty in November 2016".

Similarly, looking at the shortage in supply and banks inability to maintain adequate currency for dispensing through ATMs, its customers are forced to wait in queue for withdrawal and they end up withdrawing more amount than immediate requirement.

Farmers mostly accept only cash payments and bulk transactions in bigger states could go upto Rs.15crore-Rs.20crore/day.

Union finance minister Arun Jaitley tweeted that an unusual increase in demand in some areas has led to the shortage of currency notes. Deputy CM Nitin Patel, also the state finance minister, acknowledged that the banks are facing cash crunch and said that the government is in touch with the RBI to ensure enough cash is supplied to banks.

The awful memories of long queues outside ATMs in the country returned on Tuesday with as many as 15% of the total note-dispensing machines running out of cash.

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