Indians Money News

Demonetisation woes return? ATMs turn cashless, bankers point to lower currency supply from RBI

It seems the painful days of demonetisation period is not over yet. Several cases of ATMs running dry across the country and people returning without cash seems to be steadily on the rise. The scary situation of number of ATMs failing to dispense cash has been increasing since the start of the month.

Immediately after the closure of financial year on 31 March, several banks began facing cash shortage from 1 April which they said was the result of staff shortage and lack of supply due to year-end closing.

Most of the ATMs in the city continue to remain dysfunctional, reminding people of the days of demonetisation period in November last year, when the government’s sudden decision to invalidate high value currency notes of Rs 500 and Rs 1,000 triggered cash crunch at both the bank branches and their respective ATMs.

Representational image. Reuters

Representational image. Reuters

According to a report in The Times of India, an ATM at Andheri-Link Road dispensed only Rs 1,000 per customer, where as in Thane the limit was set at Rs 2,500 in select banks.

New currency notes the country’s central bank prints and sends to banks has fallen drastically in recent times. “We are also not seeing any recycling of cash happening. This could mean customers are holding on to currency notes and not depositing them back,” the TOI report said quoting an official.

However, industry experts also feel the sudden cash crunch at several ATMs in most parts of the country could also be due to the government’s focus on digital transactions, which seem to have moderated post the noteban exercise.

Faced with repeated messages of no cash at ATMs, there have been a rise in cases of people getting angry and resorting to vandalism, the report said, adding that a group of unidentified people vandalised a State Bank of India ATM in the Sangvi area of Pune.

“The angry suspect/s broke the screen of the cash dispensing machine after finding it to be out of cash,” a TOI report said quoting Arvind Jonddale, inspector of the Sangvi police station.

In places like Chennai, people have queued up in bank branches to withdraw cash using their cheques after ATMs in the city failed to dispense any cash.

Bank officials said non-supply of Rs 2,000 notes coupled with huge demand for cash at the start of the salary week has also resulted in a sudden shortage in cash at several ATMs.

Although the cash supply situation has improved after the Reserve Bank of India lifted cash-withdrawal limits nearly three weeks ago, the availability of lower-denomination notes of Rs 500 and Rs 100 is insufficient, the Mint newspaper report said.

“There has been a steep fall in currency production. Earlier, if the presses were printing 150 million pieces of all denominations a day, it has now fallen to 110 million pieces,” Mint reported quoting a senior bank official. “Workers have gone back to their earlier schedule. They are no longer working on 12-hour shifts.”

According to a report in the Hindustan Times, the central bank is deliberately cutting down on remonetisation in order to support the government’s black money hunt. The remonetisation is likely to flatten by this month-end, says the report. The move seems to be an attempt to put pressure on people to take the digital route to thereby curb black money generation.

According to the latest data with the central bank, currency in hand increased to a meagre Rs 22,194 crore from week ended 24 March to 31 March, 2017. At Rs 13.35 lakh crore, the liquid cash in the economy as of 31 March was around 74 percent of Rs 17.97 lakh crore, which was the corresponding figure on 4 November 2016.

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