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Cash crunch is back as ATMs across India go dry

Apr 17, 2018

The cash crunch in few states in the country including Gujarat has become worse. With ATMs running dry, people are being reminded of the demonetization days. However, to take a stock of situation, the Finance Ministry reportedly had a meeting with the Reserve Bank of India and other banks last week. Below we have listed 10 developments reviewing the cash situation in India. 

1. According to a report in the Business Standard, a recent analysis by the RBI to the finance ministry found that the rate of cash withdrawal was far more than the cash deposits in banks in states such as Andhra Pradesh, Bihar, Karnataka, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Telangana. 

“We held a meeting with the RBI officials, banks, and states today (Thursday). There is no apparent cash crunch across states. Bihar and Manipur are facing some issues. Banks have been advised to optimise cash flow at ATMs well,” a senior finance ministry official told the newspaper. 

2.“After the introduction of Rs 200 notes, there were also some issues related to recalibration of ATMs. Banks have been told to address the issue immediately,” a finance ministry official added.

3. Meanwhile, days after banks in Gujarat said they were not getting enough cash from the Reserve Bank of India, complaints started emerging about ATMs going dry. Complaints started coming in from small towns like Unjha and Jamnagar. Businessmen and farmers are the worst hit as the trading cycle has been affected adversely.

4. Unjha, in north Gujarat, the largest hub for trading of cumin, isabgul and fennel is also severely hit. Farmers are told to transact cashlessly but are not willing, said office-bearers of local Agriculture Produce Marketing Committee.

5. Farmers,  who sell crops here, want payments in cash. They don’t want to get money deposited in their accounts, as there are no ATMs for about 25 km.  In villages, they have to transact in cash. Shortage of cash with traders means farmers are forced to sell crops at lower prices.  How will you double farmers’ income in such a situation, asked Gaurang Patel, president, Unjha APMC.

6. People are facing the problem of cash crunch in both Southern and Northern parts of India. 

We have been unable to withdraw cash from ATMs as the kiosks (ATM Kiosk), in several parts of the city, have run out of cash. We have visited several ATMs since yesterday but it is the situation everywhere"

7. Last month the cash situation in Andhra Pradesh and Telangana got so detoriated that the banks have decided to get cash from Maharashtra and Kerala for Telangana and for Andhra Pradesh, it got transferred from Odisha and Tamil Nadu. 

8. SBI alone has 2,200 ATMs in these two states, of which 1,500 are operated and maintained by the bank and 700 are maintained by third parties with the cash being supplied by SBI. However, at present, only 1,400 to 1,500 of its ATMs are operational.

9. There is also a severe shortage of Rs 2,000 denomination currency notes as they are neither being supplied by the Reserve Bank of India since September 2017 to banks nor are they coming back from customers in the form of deposits, many media reports claimed. 

10. ATMs have dried up in Nitish Kumar's Bihar too. 

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