Ex-Maharashtra CM writes to RBI about critical currency shortage

BJP's Rajya Sabha member and former Maharashtra chief minister Ashok Chavan has written a letter to the RBI, drawing its attention to the “critical currency shortage” in Nanded district, and said the availability of cash was essential for the rural economy.

Chavan has written the letter to the Regional Director of the Reserve Bank of India (RBI), Nagpur division, on April 26. “I wish to draw your urgent attention to the critical currency shortage currently prevailing in the Nanded district. We are presently in the peak of the wedding season, and farmers have also commenced their pre-sowing preparations. Consequently, there is a high demand for cash in the local market,” the letter says.

Chavan said that, as per the data from the State Bank of India (Shivajinagar branch), which serves as the primary currency chest for Nanded district, the “situation is deeply concerning”.

While the chest branch limit is Rs 450 crore, only Rs 70 crore cash was available with it at present, it said.

“Due to this significant gap between demand and supply, banks are forced to impose restrictions on high-value withdrawals. This is directly impacting common citizens, farmers and traders. While banks in rural areas are advising customers to use digital transactions due to the lack of physical cash, the availability of cash remains essential for the rural economy,” he said.

If the situation persists, it will have a severe adverse impact on wedding celebrations and agricultural activities, Chavan added.

Meanwhile, a shortage of Rs 500 currency notes is being witnessed in the banks and ATMs across the Marathwada region of Maharashtra, including Chhatrapati Sambhajinagar, with bank branches primarily dispensing notes of lower denomination to customers.

Bank officials claim that due to low cash supply from the RBI, local banks are issuing currency of lower denominations.

The cash supply is only 20 to 30 per cent of the amount required in Chhatrapati Sambhajinagar, they said.

When asked, a senior bank official said, “The supply of cash from the RBI is not meeting the needs. We cannot disclose the amount coming from the RBI, but it is around 20-30 per cent of what we need. We are not receiving Rs 500 currency notes from the central bank.”

The problem is not just in Chhatrapati Sambhajinagar but also in other districts of the Marathwada region.

''This problem also exists in other districts of Marathwada, including Chhatrapati Sambhajinagar. We are receiving cash currency of smaller denominations from the RBI. It may take 15 more days for the situation to normalise,'' the official said.

''We also need Rs 500 denomination notes in the ATMs, which are currently less. So, banks have started keeping less cash in the ATMs,'' the official added.