ATMs go dry: PM gave our money to Nirav, says Rahul; RBI denies cash crunch

Several states are facing a cash shortage despite currency flows in the economy at the pre-demonetisation level

Severe cash crunch has been reported in several states of India – Karnataka, Maharashtra, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh and Telangana, and automated teller machines (ATMs) in these regions are running dry. People are facing a huge monetary crisis, with a majority of ATMs running out of cash. In Bihar's Patna, several ATMs have gone 'out of service' causing inconvenience to the locals. Taking stock of the situation, Union Finance Minister Arun Jaitley on Tuesday said the temporary shortage of currency caused by a sudden and unusual increase in some areas was being tackled.

"We have reviewed the currency situation in the country; there is more than adequate currency circulation and it is available with the banks... a temporary shortage caused by the sudden and unusual increase in some areas is being tackled," Jaitley said. Congress President Rahul Gandhi slammed PM Modi for the cash crunch, saying: "Modi has destroyed the banking system."

Rahul Gandhi said, "Nirav Modi fled with Rs 300 billion (Rs 30,000 crore) and Prime Minister didn't utter a word. We were forced to stand in queues as he snatched Rs 500 and Rs 1,000 notes from our pockets and put in Nirav Modi's pocket."

The Congress chief also took a dig at BJP-led Central government's slogan 'Achhe Din' and questioned as to when 'these goods days' were going to come. Not only Rahul Gandhi, terming the situation as "financial emergency", Trinamool Congress MP Derek O'Brien said: "PM Modi had said that everything will be fine in 50 days, but it has now been more than 1.5 years, and there is still a cash crunch."

Here are the top developments in the crisis caused by a sudden shortage of cash across several states and what the government is saying:

No cash shortage, claims RBI: There is no currency shortage, has sufficient cash in vaults and currency chests, RBI said.

Printing of currency ramped up in all 4 note presses, shortage in some pockets due to logistical issues.

1) Cash crunch worsens in rural Gujarat: The ongoing cash crunch in Gujarat worsened on Tuesday with several ATMs and banks running dry, especially in villages and the tribal belts, even though the Centre played down the issue terming it as only "temporary shortages".

Deputy chief minister Nitin Patel, who is also the state finance minister, acknowledged that banks are facing cash crunch and said the government is in touch with the RBI to ensure enough cash is supplied to banks.

2) Cash crunch temporary, says SBI: Rajnish Kumar, Chairman, State Bank of India (SBI) on Tuesday assured the people of the country that the situation of cash crunch is 'temporary' and that normalcy will be restored within a week.

"In the next week, things will start coming back to normal. There is a department which monitors situations like this. This is not new. The Reserve Bank of India (RBI) has been given an indent to increase the flow of Rs. 500 notes in the system," Kumar said.

3) Govt taking all steps to ensure ATMs are replenished: SC Garg, Secretary of the Department of Economic Affairs, on Tuesday, assured that the government is doing it's utmost to resolve the situation at the earliest.

"The Government is taking all steps to ensure that ATMs are supplied with cash and to get the non-functional ATMs normalised at the earliest," Garg said.

"The Government of India would like to assure that there has been an adequate supply of currency notes which have met the demands so far. It would also like to assure it would be supplying adequate currency notes to meet even higher demand in coming days/months," he added.

"We print about 5 billion of Rs 500 notes per day. We have taken steps to raise this production 5 times. In next couple of days, we'll have a supply of about 25 billion of Rs 500 notes per day. In a month, supply would be about 700-750 billion," informed Garg.

4) ATMs run dry in some states, FM says temporary shortage: Finance Minister Arun Jaitley said the "temporary shortage" in certain states is being "tackled quickly" and that there is "more than adequate" currency in circulation.

"Overall there is more than adequate currency in circulation and also available with the Banks. The temporary shortage caused by 'sudden and unusual increase' (in demand) in some areas is being tackled quickly," he said in a tweet.

A statement by the finance ministry confirmed reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country.

"There has been unusual spurt in currency demand in the country in last three months," it said.

5) Life gets miserable for many Indians, especially traders: Despite the currency flow in the economy going back to the pre-demonetisation level, ATMs are going dry making life miserable for many residents, especially traders. Many are running from one ATM to another in search of currency notes.

Have reviewed the currency situation in the country. Over all there is more than adequate currency in circulation and also available with the Banks. The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly.

— Arun Jaitley (@arunjaitley) April 17, 2018

6) Some ATMs not dispensing more than Rs 5,000: Only one ATM at State Bank of India’s branch had cash, but the machine was dispensing only up to Rs 5000 cash and that too only in the form of Rs 100 currency notes, according to The Times of India report.

The people in Delhi, on the other hand, said that most of the ATMs are dispensing only Rs 500 notes.

7) Hyderabad, Varanasi office-goers face troubles: In Hyderabad, office goers have told news agency ANI, that they have been unable to withdraw cash from ATMs in several parts of the city since yesterday. There are reports from Varanasi as well of people saying there is no cash at ATMs since yesterday, said TOI report.

However, people in Madhya Pradesh claimed that they have been facing a cash crunch for the last two weeks.

8) Govt's meeting with RBI on cash shortage across states: The finance ministry held a meeting with the Reserve Bank of India (RBI), banks, and state government officials on Thursday to take stock of cash availability after receiving complaints of the dearth of money in some states. The non-release of funds by the Centre is being cited as one reason for the cash crunch.

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. 

9) RBI not disbursing enough cash? The cash shortage, according to informed sources in the banking sector, has been there for almost a fortnight as less amounts of cash was received from the RBI. The cash crunch is believed to be right from the level of currency chest, from where the cash is disbursed to various bank branches across the state.

10) March salaries of over 22,000 govt employees held up: of More than 22,000 government employees are yet to get their salary for the month of March, even as the Finance Department authorities are working hard to fix the glitch.
 

Madhya Pradesh CM cries conspiracy: Madhya Pradesh Chief Minister Shivraj Singh Chouhan today claimed that Rs 2,000 notes were vanishing from the market, and alleged that there was a "conspiracy" behind it, said an NDTV report. He was referring to news reports of ATMs running out of cash at some places in the state. Shukla said that the problem will be resolved within three working days as the government has about Rs 1,25,000 crores of cash currency.