Cash flow improves, shortage in limited areas: Bank officials
ATMS ACROSS MANY PARTS OF THE COUNTRY HAD RUN DRY BECAUSE OF A SPIKE IN DEMAND FOR CASH, FORCING THE GOVERNMENT TO STEP IN ON TUESDAY TO INCREASE THE DAILY PRINT ORDER
PATNA/AHMEDABAD/RANCHI/DEHRADUN/BHOPAL: A shortage of money in automated teller machines (ATMS) in parts of the country, including Bihar, Madhya Pradesh, Uttarakhand and Gujarat, seemed to have eased on Wednesday, reflecting what banks described as an improvement in cash flow. Residents of Bihar were still struggling.
In separate statements, State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank and Axis Bank claimed the shortage of money in ATMS was limited to select pockets.
“Availability of cash in SBI ATMS has improved in the last 24 hours,” said Neeraj Vyas, deputy managing director and chief operating officer of SBI. In a statement by SBI, a spokesperson said transactions in the bank’s ATM network were 92% normal. “It had dropped to around 85% on Tuesday. But the situation has improved today,” it said.
ATMS across many parts of the country had run dry because of a spike in demand for cash, forcing the government to step in on Tuesday to increase the daily print order for ~500 notes fivefold to ~2,500 crore. In the first 13 days of April, demand for cash shot up to ~45,000 crore from a monthly ~40,000-~45,000 crore in the previous two months. Demand in February and March had already doubled from ~20,000 crore a month on average for the past year.
Economists attributed it to several factors: the harvest season, which usually means more demand for cash to pay farm workers; festivals, a revival in the economy after the twin shocks on demonetisation in November 2016 and the Goods and Services tax implementation starting on July 1. Fears that the passage of the Financial Resolution and Deposit Insurance Bill could lead to people losing their money if banks failed also contributed to increased withdrawals of money.
Axis Bank said it had enough cash, which is “better than the industry average and there is no such crisis”. “Even if there are cases of ATMS running out of money it is because people from other banks are coming to withdraw money,” an Axis Bank official said.
Admitting a shortage of money in ATMS, Bihar deputy CM Sushil Kumar Modi expressed confidence that the situation will be normal soon . In Patna, many ATMS displayed ‘No Cash’ and ‘Out Of Service’ signs.
“...Since I had to board an autorickshaw, I needed cash and so walked for about one-and-a-half kilometres but did not find cash in ATMS in the route,” said Jitendra Kumar, a private company employee in Patna.
In Jharkhand, a day after chaos was seen at ATM counters, the situation improved in the state capital Ranchi. Most ATMS dispensed money in the morning, but they ran dry by evening.
“SBI has 174 ATMS in the capital city. There is no shortage of currency in the ATMS. Due to shortage of high-denomination notes of ~2,000, some ATMS are exhausting money fast,” said Sunil Kumar Gupta, an assistant general manager at the bank.