NEW DELHI, April 17 - Unusual spurt in currency demand in states like Uttar Pradesh, Madhya Pradesh, Andhra Pradesh as well as poll-bound Karnataka led to dry ATMs in several parts of the country, sending the government scrambling to make contingency plans to cover the deficit.
The government said it suspects that Rs 2,000 notes were being hoarded and plans to increase five-fold the printing of Rs 500 notes. Within a month, it said, Rs 70,000-75,000 crore currency notes will be printed. The Reserve Bank of India (RBI) said the printing of currency has been ramped up in all the four note presses, and the shortage in some pockets is due to logistical issues.
ATMs of both public and private sector lenders in several cities were either not operating or showed �no cash� signs, a situation that officials insisted was not alarming and did not warrant panic. Cities and towns across Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan and Uttar Pradesh were impacted by the cash crunch.
Some ATMs downed shutters with �No cash� and �Out of service� signs, prompting the government to move currency from surplus regions. Some ATMs in national capital Delhi too went dry.
Political leaders from Rahul Gandhi of Congress to TMC�s Mamata Banerjee trained guns on the government saying ATMs running dry was a reminder of demonetisation days.
While Finance Minister Arun Jaitley assured hassled customers that the government will fix the problem quickly, officials attributed the cash crunch to crop procurement and hoarding of high denomination currency ahead of elections in Karnataka. Such crisis was, however, not witnessed in any of the previous procurement seasons.
�Overall there is more than adequate currency in circulation and also available with the Banks. The temporary shortage caused by �sudden and unusual increase� (in demand) in some areas is being tackled quickly,� Jaitley, who has been away from office since April 2 due to a kidney ailment, said in a tweet.
Jaitley said he has reviewed the currency situation in the country.
The government is checking with banks and the RBI to ensure adequate supply of currency. The RBI has, meanwhile, announced that there is no currency shortage and there is sufficient cash in vaults and currency chests.
A statement by the Finance Ministry confirmed reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country. �There has been unusual spurt in currency demand in the country in last three months,� it said.
While currency supply increased by Rs 45,000 crore in the first 13 days of April, �unusual spurt in demand� was seen more in some parts of Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, it said.
Minister of State for Finance Shiv Pratap Shukla said the government has formed a committee to address the problem of currency shortage in certain states and the issue would be resolved in next 2-3 days.
�The government has set up state-wise committees and the 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. It (the shortage) will be solved in 2-3 days,� he said.
The RBI report shows that the currency in circulation in the country has reached the pre-demonetisation level of about Rs 17 lakh crore. �The Government of India with the Reserve Bank of India has taken all steps to meet this unusual demand. We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far,� the Finance Ministry statement said.
�We continue to have in stock adequate currency notes of all denominations, including of Rs 500, Rs 200 and Rs 100 to meet any demand,� it said, adding, there has been adequate supply of currency notes to meet the entire demand. � PTI