Cash Crunch: Finance Ministry assures of resolving issue in three working days

Cash Crunch: Finance Ministry assures of resolving issue in three working days

Responding to reports that ATMs are out of cash or not working in several states, Finance Minister Arun Jaitley today conceded a "temporary shortage in some areas" and said it was being "tackled quickly".

"Have reviewed the currency situation in the country". Since the amount of currency put out by the Reserve Bank of India (RBI) and government printing presses is adequate for normal transactions, bankers believe there is hoarding of the Rs 2,000 notes. Jaitley took to micro-blogging site Twitter and said that the shortage is "temporary" and that it has been caused due to "sudden and unusual increase" (in demand) in some parts of the country.

SP Shukla, Finance Ministry official, said that RBI has formed a committee to transfer currency from one state to cash-crunch hit states.

Almost one and a half years after the cash crisis that gripped the nation in the wake of Prime Minister Narendra Modi's sudden demonetisation announcement, parts of the country have again been haunted by shortage of currency. "It (the shortage) will be solved in 2-3 days", Shukla said.

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People in Madhya Pradesh, Delhi, Bihar, Gujarat and Telangana too have reported problems in withdrawing money from ATMs. However, people in Madhya Pradesh claimed that they have been facing a cash crunch for the last two weeks. After the demonitisation exercise, the currency in circulation increased to Rs. 16,50,000 crore. In some states, the recalibration of ATM machines to dispense 200 rupee currency notes is yet to be finished. Even though the government clarified that there could be no such outcome, the rumour drove people to ATMs and bank branches to withdraw money, according to a report on economictimes.com.

Addressing a farmers' convention, Chouhan said, "The currency worth Rs 15,00,000 crore was in circulation before demonetisation". 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.

He had taken up the issue with the Union Government, Mr Chouhan added. This is a conspiracy to create problems.

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