Looking into reasons for high cash demand, taking steps to ensure supply to ATMs: Govt

After reports started pouring in, that ATMs in many states were running out of cash, the finance ministry held a press conference to reassure the people that there was enough cash in the system. Attributing the shortage of cash in ATMs to unusually high demand the government said that the demand spiked to Rs 45,000 crore in the first 13 days of April, compared to average demand of about Rs 20,000 crore a month.

The government along with the RBI was taking steps to ensure cash supply and that non-functional ATMs started working at the earliest.

“The government would like to assure all the people that there has been adequate supply of currency notes which has met entire demand so far. The government would also like to assure that it would be supplying adequate currency notes to meet even higher levels of demand if such demand were to continue in the coming days/months,” according to the department of economic affairs.

ALSO READ:Finance Ministry accepts cash crunch; says will be resolved soon

Secretary, department of economic affairs, SC Garg, said that the sudden cash demand was a localised phenomenon and the government will look into the reasons for it. People in states including Delhi, Karnataka, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh, Telangana, Maharashtra, Bihar said that they were not able to withdraw cash from some ATMs.

Earlier in the day Union Finance Minister Arun Jaitley called the cash crunch as a ‘temporary shortage’ and assured that the situation will be tackled quickly.

In response to the ATMs running dry the Congress leader Rahul Gandhi accused the government of weakening the banking system, in a tweet.

What the government said:

  • Unusually high demand for currency, more in some parts of the country like Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar.
  • As opposed to an average demand of about Rs 20,000 crore a month, the demand was Rs 45,000 crore in the first 13 days of April.
  • In the last few days cash has been pumped into the system to meet the demand. Country has a reserve of Rs 1.75 lakh crore.
  • Adequate reserves of currency notes which have been used to meet fully the extraordinary demand. Currency notes of all denominations, including of Rs 500, 200 and Rs 100 are in stock to meet any demand
  • About 500 cr of Rs 500 notes are printed per day. Steps to raise this production 5 times will be taken, increasing the supply of  of Rs 500 notes per day to about 2500 cr. In a month, supply would be about 70000-75000 cr.

 

 

 

 

 

 

 

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