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 ogistical 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. 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