To beat cash crunch, government to print more Rs 500 notes

To beat cash crunch, government to print more Rs 500 notes

The short fall in the supply was reflected at ATMs of SBI on Tuesday.

Earlier reports from various states, including Andhra Pradesh, Madhya Pradesh, Telangana, Maharashtra, and Bihar, said that a majority of ATMs were facing a cash crunch due to non-supply of notes from the nodal branches of banks.

The central bank also said it was "asking steps to move currency to areas which are witnessing unusually large cash withdrawals".

Demanding an immediate statement from the government on "the truth behind the cash crunch", he told PTI that "the people have a right to know and you can not hoodwink them in a democracy".

"This situation (cash crunch) is not restricted to the state; it is there in the entire country". Big notes missing. Reminder of #DeMonetisation days. She also wondered whether there was a "financial emergency" in the country.

Currency with the public excludes cash with banks, while currency in circulation includes notes in circulation, rupee and small coins, and deposits with commercial banks in current and savings accounts.

In a note that comes a day after reports of currency shortages made national headlines, it said Rs 15,291 billion was withdrawn from ATMs in the second half of FY2017-18, 12.2 per cent higher than the previous six months.

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The ban removed 86% of the country's currency from circulation at a stroke, and threw the cash-dependent economy into turmoil for weeks. Now, government is complaining that Rs 2,000 notes are being hoarded! Most of the ATMs are not dispensing cash, the ones which are dispensing, have only Rs 500 notes. One should note that digital transactions have significantly increased in the country post demonetisation. This Rs seven lakh crore number is huge and the supply of Rs 2,000 notes beyond this is not required.

"Many banks are suffering because of inadequate supply of notes".

However, never in the past has such a situation has been reported ahead of elections.

"The country is moving to a very risky scenario as this cash crunch erodes faith in the banking system", said C.H. Venkatachalam, general secretary of the All India Bank Employees' Association, which represents about 1 million bank employees. "I support digitization, but government can not force the pace of digitization or arbitrarily reduce the supply of cash". We have taken steps to raise this production five times. Cash in circulation (with banks and public) as on April 06, 2018 was Rs18.4 lakh crore, according to RBI, which is very close to currency in circulation during pre-demonetisation, which was Rs17.97 lakh crore. In the first fortnight of the month, currency supply was increased by Rs 45,000 crore. Minister of state for finance Shiv Pratap Shukla said, "The government has set up state-wise committee and RBI has also formed a committee to transfer currency from one state to other, because for money transfer you need the permission of the RBI".

Rama Dorai of FIS stressed that "different states have seen cash crunches at different times, and this is not in itself a new phenomenon".

"We had to tell our suppliers to wait for a few days for payments".

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