"The temporary shortage caused by "sudden and unusual increase" in some areas is being tackled quickly", ANI quoted Finance Minister Arun Jaitley. RBI sources have said that "higher than normal withdrawal of cash" in these states have led to acute shortage of cash. Reserve bank has already formed the committee to transfer currency from one state to other.
Elections in India involve a lot of expenditure, most of which is carried out using untaxed or illicit income, and can therefore only be done via cash. "We can not do much unless RBI starts dispatching currency to the currency chest from where we get cash". He smelled a conspiracy in the cash crunch. Below we have listed 10 developments reviewing the cash situation in India. The ministry officials also held consultations with state officials and bank heads in the wake of shortage of cash. Taking cognizance to the matter, Mos Finance SP Shukla said that government is aware of the issue and steady steps are taken by the Government.
There is another reason for cash shortage. The government has reportedly claimed that the lack of currency notes could be due to high demand of cash during Baisakhi, Bihu and other harvest festivals.
He further added, "Where are these notes of Rs. 2,000 denomination going? SBI is facing a major problem because payment under many government schemes is made through the bank". The issue was quick to take political overtones.
The situation is same in Madhya Pradesh. When the cash shortfall was reported from Andhra Pradesh and Telangana in March, it was attributed by some to a misunderstanding of the Financial Resolution and Deposit Insurance Bill, which had a "bail in" clause where depositors would bear a portion of any losses. There is one problem that some states have less currency & others have more. "We are in touch with centre also".
People in Bhopal told ANI, "We are facing a cash crunch". They don't want to get money deposited in their accounts, as there are no ATMs for about 25 km. The problem will be resolved within next 3 day. while Chhattisgarh Chief Minister Raman Singh accepted the cash crises in state and the situation will normal soon. We have visited several ATMs today as well, to no avail, ' people in Bhopal said. We have visited five to six ATMs since morning. "We need to pay for the admission of children and purchase groceries and vegetables".
People in the national capital are also tweeting about non-availability of cash in the ATM machines. "We are facing difficulty, don't know what to do", they said.