Cash crunch may hit you this long weekend amid short supply from RBI
Banking sources said the Reserve Bank of India (RBI) is supplying only about 25% of the cash required for ATMs in several states such as Maharashtra, Andhra Pradesh, Gujarat, Karnataka and Kerala.india Updated: Apr 13, 2017 20:45 IST
Bank holidays on Good Friday and Sunday as well as a shortfall in cash supply could trigger a weekend monetary crisis at ATMs in the country, especially the western and southern states.
Banking sources said the Reserve Bank of India (RBI) is supplying only about 25% of the cash required for ATMs in several states such as Maharashtra, Andhra Pradesh, Gujarat, Karnataka and Kerala.
Banks and cash logistics companies are finding it difficult to replenish ATMs in these states. The country has more than 200,000 ATMs.
The situation is better in New Delhi, Uttar Pradesh and the rest of northern and eastern India. West Bengal and Odisha have adequate cash supply, bankers said.
“The cash situation has stabilised considerably but once again problems are cropping up. Supply is thinning … complaints have started pouring in,” said NSG Rao, the secretary of the Cash Logistics Association.
The association represents cash logistics companies such as SIS Prosegur and CMS which are hired by banks to ship cash and replenish ATMs.
The situation could exacerbate into a crisis as banks will be open only on Saturday in the next three days, starting with Good Friday on April 14, which is a national holiday.
Sources said the cash shortage is expected to stabilise in the next two weeks.
“It could be because of the state elections … typically more cash is supplied to states going to the polls. That’s done to prevent law-and-order disruption. Things are expected to fall in place by this month-end,” a senior executive with private sector bank said.
Bank ATMs ran dry after the government scrapped 500- and 1,000-rupee notes last November and triggered a cash shortage. The shortfall eased in January with the government pumping new 500- and 2,000-rupee notes into the system.
But ATM replenishment is getting hit after the RBI lifted restrictions on withdrawals from savings accounts, prompting banks’ to ensure enough cash for their customers at their branches.
First Published: Apr 13, 2017 20:40 IST