Beena Parmar Moneycontrol News
As ATMs run out of cash, the pace of currency availability with the public slowed towards the end of March.
According to the RBI data, there was a 4 percent increase in currency in the hands of the public at Rs 12.64 lakh crore as on March 31, as against a 7 percent rise a fortnight ago at Rs 12.13 lakh crore as on March 17. The increase in the preceding two fortnights was 6.8 per cent and 8.5 percent.
The currency with public was at a low of Rs 7.8 lakh crore in December, immediately after the cash ban, while it was at a peak of Rs 17.01 lakh crore as of October-end before demonetisation.
Nearly five months since the Prime Minister Narendra Modi announced the sudden doing away of old Rs 500 and Rs 1000 rupee notes on November 9, there has been a gradual pickup in the cash in circulation in the economy, but now seems to be some liquidity crunch again in some regions of the country.
Many ATMs were running dry in the past month in places such as Hyderabad, Andhra Pradesh, Telangana, Mumbai and Pune after they faced occasional shortage of cash supply, even as average transactions had returned to normal pre-demonetisation days.
The supply of currency from banks to ATMs has dipped to 50 percent from the pre-November 8 levels. Before November 8, banks' supply to ATMs was an average Rs 12 lakh per booth, which has now declined to Rs 6 lakh per booth, according to reports.
Bankers say they are filling the ATMs where they see the largest usage, which could be commercial office areas and the more densely populated locations. “There could be some off-site ATMs in not-so-populated locations, especially the rural areas which might get adequate loading in the next 2-3 weeks,” said a banker with a large public sector bank.
An executive with a cash logistics firm said, “Now, about 90 percent of the ATMs are being loaded on a daily basis and we get 90 percent of the value that we ask from banks but the challenge exists on the denomination mix. They run out of the required currency as there is more supply of 2000 notes and 500 supply is limited. Customers want more of 500 and 100 rupee notes and the 100 rupee notes get exhausted quickly while 2000 are not wanted. Banks and the RBI are working to normalise things in 2-3 weeks.”
Post November 8 the,re was evident cash crunch that resulted in long queues and scuffles outside banks and ATMs and people adapted to the digital mode of transacting.
However, with cash coming back into the system, digital transactions have also started slowing.
The government and RBI’s only hope would be that the people would continue to adapt to the digital channels for making transactions which would serve the dual purpose of facing cash crunch and meeting the aim of India becoming a cashless or less-cash society.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
