In many parts of the county, there have been reports of ATMs out of cash.
Highlights
- Increase in cash withdrawals led to mismatch between availability, demand
- Government yesterday acknowledged there was "temporary shortage" of cash
- All banks asked to replenish at least 80% of ATMs by tomorrow: Sources
A spike in cash withdrawals from banks over the last fortnight that people did not deposit into the banking sector has contributed to the cash crunch faced in several parts of the country, official statistics accessed by NDTV has indicated. This increase, finance ministry officials said, had led to a mismatch between the availability of cash and demand in several parts of the country.
The government had yesterday acknowledged that there was "a temporary shortage" of cash in some areas but has been able to pinpoint a reason for the crunch. A quick analysis of the figures available at the finance ministry's banking department has suggested some of it could have to do with excessive withdrawal of money from banks in some states.
In Andhra Pradesh, for instance, officials say people withdrew Rs 483 crore from their bank accounts on 6 April. But only Rs 219 crore was deposited into the banks by customers. In adjoining Telangana the same day, cash withdrawals were 130 per cent more than deposits.
On Monday, people withdrew Rs 29,475 crore from banks but only Rs 23,651 crore made its way to the banks.
"Yes, there has been a definite slowdown in the number of people making deposits," Rabindra Gupta of the All India Bank Officers Confederation told NDTV.
Mr Gupta said it was a matter of concern where the cash was going since the total cash pumped into the economy had gone up.
That is a question, the government hopes, the income tax department would be able to answer when it completes its investigation into huge cash withdrawals.
The central bank had yesterday attempted to play down continuing reports of the cash crunch, describing the shortage to local "logistical issues of replenishing ATMs frequently".
But it nevertheless ramped up printing of notes in all the four printing presses. It was not clear why this decision had been taken if there was no shortage of cash in the economy.
Rajeev Kumar, the top finance ministry official who heads the centre's banking department, appeared to back up the Reserve Bank of India.
"There has been no mismatch in printing of currency and growth in the economy," Mr Kumar told NDTV, rebutting the criticism levelled that the central bank and the centre had tried to control the amount of cash in the economy.
"It is the unusual spurt in withdrawals in the first 15 days of April in some states and in case of some states, it has been noticed for over a month," the top official of the centre's banking department said.
It isn't clear why the centre, which has been scrambling to fix the gaps in the currency delivery system, hadn't fixed the problem if it had noticed the trend for longer.
The top finance ministry official said the government had asked all banks to replenish at least 80 per cent of the ATMs with cash by tomorrow.