After the Government’s assurance for availability of sufficient currency in the system on Tuesday, cash position across the country is fast improving with over 80 per cent of 2.2 lakh ATMs operating normally on Wednesday, according to an official source.
However, it is learnt that ATMs in some parts of the country continued to remain out of cash even on Wednesday as the Government is reportedly to have moved quickly to rush currency to meet an ‘unusual spurt in demand’ ahead of looming polls in some States in the country.
Reacting to the currency situation, even India’s largest lender State Bank of India (SBI) said that cash availability at its ATMs has increased in the past 24 hours following reports of currency shortages and ATMs running dry from different parts of the country. Several other lenders, including PNB, Canara Bank and Axis Bank also claimed that cash shortage at ATMs was limited to select pockets and they are improving gradually.
Unusual spurt in demand for currency had led to many ATMs and banks running out of cash in Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telengana and poll-bound Karnataka and some other States on Tuesday even as the Government and the RBI assured the public that there was no currency shortage.
The Government on its part claimed that the situation was fast improving with over 80 per cent of 2.2 lakh ATMs operating normally on Wednesday as against 60 per cent on Tuesday. “The ‘unusual spurt in demand’ for payments made for crop procurement and looming elections,” the Government officials attributed.
On the other hand, banks, the officials said, are replenishing cash at ATMs. Also, all the four printing presses are working round-the-clock to print smaller currency notes.
Meanwhile, senior Finance Ministry officials on Wednesday held video conferences with public sector banks (PSBs) during which they have been asked to replenish ATMs with Rs 500 notes. The PSBs have been asked to ensure that above 80 per cent of ATMs start dispensing cash within a day and step up cash supply in all branches.
A PNB official also said overall the bank has not faced any cash shortage in its ATMs across the country and continue to function as usual. “Out of 9,679 PNB ATMs, there is a 90 per cent availability of ATMs which is normal. The bank would like to reassure its customers that all possible measures are being undertaken to ensure that its ATMs remain functional and are refilled regularly.”
The shortage has been blamed on inadequate availability of Rs 2,000 currency notes, and the fact that ATM cassettes have not been configured to dispense smaller Rs 200 notes.
Other reasons being attributed for the cash crunch are upcoming polls in Karnataka, State Government programmes in Telangana and Andhra Pradesh that are used to make cash payments, festive seasons, and misunderstanding of the Financial Resolution and Deposit Insurance Bill’s ‘bail-in’ clause, where depositors would bear a portion of any losses.
Amid currency shortage reported in at least six States, Economic Affairs Secretary Subhash Chandra Garg on Tuesday had said the Government had stepped up printing of 500 rupee notes by five times, and RBI clarified that there is enough cash available in the system. The Government is also analysing the demand pattern in the States.
“Availability of cash in SBI ATM has improved in the last 24 hours. Efforts are being made on a continuous basis to improve the cash availability further in a few geographies. Overall issue of less cash should come to normalcy within soonest possible time,” said Neeraj Vyas, DMD (Chief Operating Officer) of SBI.