The RBI, it said, is closely monitoring both these aspects. The finance ministry officials held a meeting with their RBI counterparts last week to ensure there was no large-scale hoarding of cash.
“We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far”. I went to SBI to withdraw ‘20,000. Reports of a cash crunch in several states including Delhi, UP, MP, Bihar Telangana and Gujarat sent the central government scrambling to put together a contingency plan and allay fears. Daily ATM transaction volume is now at par /greater than the pre-demonetisation period. Restrictions on withdrawals have also been placed in some areas. “To facilitate currency velocity, recalibration of ATMs to dispense Rs 200 notes is progressing rapidly”, Sinha said.
However, never in the past has such a situation has been reported ahead of elections. As a rule, cash supply must grow at the same rate as the economy is growing and the government was obliged to provide as much cash as people need at any given time, Chidambaram said in a series of tweets. If we compare, then Rs 7,140 crore was the cash demand previous fortnight, and Rs 33,000 crore before that. Bank authorities when encountered with the issue raised their hands stating that currency shortage in ATM’s is because of the poor supply of currency from the RBI.
Another banker said on the condition of anonymity that there is a shortage in cash supply and that the bank has already sent revised currency requirements to their currency chest expecting a spike in demand for cash as the withdrawals have gone up. Garg asserted that there was no cash crunch in the country, pointing out that now around Rs 18 lakh crore worth of currency was in circulation – a little over what was in circulation at the time of demonetisation.
FRDI BILL OR SCAMS NOT RESPONSIBLE FOR CURRENCY SHORTAGESubhash Garg also dismissed rumours that the cash shortage is related to the recent scams in the banking sector, including one allegedly perpetrated by Nirav Modi or the Financial Resolution and Deposit Insurance (FRDI) Bill.
“Very soon, in the next couple of days, we will have a supply of about Rs 2,500 crore worth of Rs 500 notes per day”.
Harvest festivals were also blamed for cash crunch. “It has been there in different states at different times”. He attributed it to the huge demand in the last three months.
The government also said that the RBI will increase five-fold the printing of Rs 500 notes to deal with cash shortages in certain parts of the country, fuelled partly by hoarding of high denomination currency. ATMs are not dispensing cash. Over long weekends clubbed together with holidays, ATMs tend to run dry. Those open run dry of cash within few ho-urs. “We sincerely regret the inconvenience caused to some of our customers due to insufficient cash supplies at some of our locations”, said the chairman and further stated that “the bank highly values the unconditional loyalty of people of the state towards the bank”, the statement added.