Published: Tue, April 17, 2018
Finance | By Claude Patterson

Severe cash crunch in ATMs in several states

Severe cash crunch in ATMs in several states

The reports of cash crunch at ATMs have brought back memories of November 2016, when Prime Minister Narendra Modi, in a midnight announcement said old notes of Rs 500 and Rs 2000 will be scrapped.

The sources in the government said that occurrence of various festivals like Baisakhi, Bihu and other harvest festivals which also mark the lunar new year recently might have pushed the demand for cash in the affected states.

The government, meanwhile, has been trying to encourage people to adopt cashless payment methods like debit cards, UPI and Aadhaar-Enabled Payments, but has had limited success so far. "We've cash currency of Rs 1,25,000 crore right now". There is one problem that some states have less currency & others have more. And the only party flush with cash is the BJP: "the people suffer", he tweeted. Many problems have occurred due to lack of currency.

Senior finance ministry officials, who held a meeting with RBI's currency circulation division, banks and state government officials on Thursday, blamed the shortage of cash to various factors, including mismanagement of cash flow by banks, recalibration of ATMs to support the new currency notes, and logistical issues. "We have visited several ATMs today as well but to no avail". "The temporary shortage caused by sudden and unusual increase in some areas is being tackled quickly". "We are facing difficulty, don't know what to do". As per reports, most of the ATMs are running out of cash that has created big problems for the people. There have been complaints that either the ATMs don't have cash or they are not working. We need to pay for the admission of children and purchase groceries and vegetables, ' said a common man from Varanasi. After this exercise (demonetisation), the currency in circulation increased to Rs 16,50,000 crore. "But notes of Rs. 2,000 are missing from the market". The situation has been the same since last 15 days.

Commenting on the situation, J N Singh, chief secretary, said, "We understand the urgency faced by the banks and are in constant touch with the RBI as well as the central government to resolve the issue".

Situation is worst in Madhya Pradesh where people are complaining that ATMs are non dispensing cash from the past 15 days.

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