Cash shortage: Govt might take 3 days to restore cash


While several states across the country have reported instances of ATMs going dry, the government has asked for at least three days to mitigate the lack of availability of currency. "The temporary shortage caused by "sudden and unusual increase" in some areas is being tackled quickly", Jaitley tweeted.

Mos Finance SP Shukla said that the Reserve Bank has formed a committee to transfer currency from one state to other. According to a NDTV report, Addressing a farmers' convention, Mr Chouhan said on Monday, "The currency worth Rs. 15,00,000 crore was in circulation before demonetisation". There is one problem that some states have less currency and others have more.

The Centre on Tuesday admitted to the cash crunch and blamed it on uneven distribution of currency by the RBI across states.

Minister of State for Finance Shiv Pratap Shukla, meanwhile, said a committee has been set up to look into the issue.

He was referring to news reports of ATMs running out of cash at some places in the state. While the growth in currency has been nearly flat (compared to the day before demonetisation), the need for currency has shrunk considerably because of the high level of digitisation.Cash crunch in ATMs may also be the result of a slowdown in deposit growth.

People in Madhya Pradesh, Delhi, Bihar, Gujarat and Telangana too have reported problems in withdrawing money from ATMs. A proper cash management system has been suggested to overcome such difficulties, which could help in maintaining the cash in the states, so that there is no misbalance of the funds, and people don't have to face the ordeal often times. Earlier, finance ministry officials had reportedly met with the RBI officials to take stock of the situation. After this exercise (demonetisation), the currency in circulation increased to Rs 16,50,000 crore.

Puneet Sharma, a trader at Lucknow's Aminabad market compared the situation to that after the government scrapped high-value notes in November 2016. He alleged a "conspiracy" to create a shortage of cash in the state, where assembly elections will be held later this year, by keeping the highest denomination notes out of circulation. "The government will act tough on this", the Madhya Pradesh Chief Minister said.