New Delhi, April 5: Even after four months of Prime Minister Narendra Modi’s demonetisation drive, the issue of cash crunch has not been completely solved. People across the nation were greeted with empty automated teller machine (ATMs) during the past few weeks. Despite various efforts by the government make cash available at ATMs, a large number of people across the nation complained of no cash at bank ATMs in the past few days. A senior bank official attributed the shortage to the withdrawal of a large amount of cash in a single day. It was reported that the ATM were fully loaded with cash of about 6 lakh on March 31 and that the entire money was withdrawn in a single day.
Experts believe that cash withdrawals were very high towards the end of a financial year due to which ATMs do not have enough cash to meet the cash withdrawal needs of the customer. “Typically, the first few days of April see higher than the normal withdrawal of cash due to the (financial) year-end. Hence, outflows from ATMs are slightly higher in some centres. Customers are depositing cash in branches and the situation should normalise”, Rajeev Anand, executive director of Axis Bank said.
Meanwhile, the Reserve Bank of India has decided to print Rs 200 notes after the government officially approves this new denomination. The bank is likely to start the process of printing the new Rs 200 notes after June. As per reports, the decision was taken at the RBI board meeting in March. ATMs continued to run dry in several locations across the nation, primarily due to lack of availability of lower denomination notes. Prime Minister Narendra Modi sent shockwaves across the nation when he made his surprise announcement of scrapping Rs 500 and Rs 1000 notes on November 8, 2016. Post demonetisation, the Reserve Bank of India (RBI) had imposed a cap of Rs 24,000 per week on cash withdrawal at bank branches and a cap of Rs 4000 per day on ATM withdrawal which were removed on March 13.
SBI report states that despite the cap removal, cash withdrawals seem on a decline. The report further said that the weekly cash withdrawals totalled Rs 34,500 crore on March 17 and Rs 32,500 crore on March 24. It was reported by Economic Times that about 60% of the ATM machines are working, but most of them are running out of cash very fast. This is because the ATMs are not being loaded to their full capacity. Post demonetisation, there has been an increase of 584 per cent in digital transactions done through the Unified Payments Interface (UPI), reports stated.
While the demand is about Rs 250 crore daily, supplies have been about Rs 50 crore. The banks are constantly in touch with RBI to fill ATMs at the maximum capacity. The other states of the country are facing the similar issue may be because of local distribution where ATM-filling is outsourced. An SBI executive said that it is not a problem of cash supply.
According to SBI, the cash crunch was acute in Andhra Pradesh and Telangana because the currency from RBI was much less than the usual demand. S Venkateshwara Reddy, General Secretary of Regional Rural Bank Employee Union was quoted by The News Minute saying, “The main problem is that Hyderabad alone needs nearly Rs.4000 crore, but the banks have received only Rs.1000 crore. Even though RBI has lifted the withdrawal limit, banks do not have enough cash to give their customers”.