No currency shortage, printing of notes ramped up: RBI

Cash crunch Bank unions threaten to launch nationwide agitation

In a note that comes a day after reports of currency shortages made national headlines, SBI Reserach said it depended on nominal gross domestic product (GDP) growth, currency with the public and the rise in digital transactions to arrive at the shortfall estimate. There were several reasons cited by different people for this man-made crisis. Following this, some months ago the government and the RBI chose to not issue fresh Rs 2,000 notes to join the circulation.

This theory was floated by Madhya Pradesh CM Shivraj Singh Chouhan. Then there are persistent reports of '2,000 currency notes being hoarded and disappearing from the system. Rs 2,000 notes are not being printed for the past few days, ' Economic Affairs Secretary S C Garg has stated. When questioned about this theory MP finance minister Jayant Malaiya said: "It can not be ruled out".

"The ATMs are also being replenished with Rs 500 and Rs 2,000 notes to meet the demand", Kumar said. "Nevertheless, printing of the notes has been ramped up in all the four note presses", the statement read. Industry estimates at the time had pegged the cost of this exercise at a whopping Rs 100-120 crore for the country's 2.4 lakh ATMs collectively. However, he did not specify when the printing of notes stopped. The government has said it will investigate the reasons for the shortage.

He also needled the government on the recent bank scams, saying people appeared to have lost confidence in banks.


The most contentious part in the bill is a suggestion to have a "bail-in" provision, which if incorporated result in cancellation of a liability on the part of the bank and can extend to bank deposits.

"Availability of cash in SBI ATM has improved in the last 24 hours. But due to cash shortage, tourists won't spend much". If banks have already started acting on these provisions, it could lead to cash supply shortage in the interim. "Demand for cash has been rising".

Limited supply apart, the Rs 2000 note itself is acerbating the current cash crunch.

"There has been unusual spurt in currency demand in the country in last three months", a statement by the finance ministry said. This has also become a contributing factor in triggering shortage. This too has added to the problem. But news reports say it got delayed in many parts of the country. They argue that they take less space to stock and are easier to transport. Notably, Karnataka goes to polls next month. It is an open secret that cash remains the king in Indian elections despite all talks of digitisation. State Bank of India chief general manager of Hyderabad circle, J Swaminathan, told TOI on Wednesday: "All banks will have to take steps to move currency from cashsurplus locations".

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