Cash Crunch In AP & Telangana; Money Being Shipped From Kerala, TN To Fill Dry ATMs
March 29th, 2018
During demonetisation, ATMs around the country were cash-strapped. There were never-ending ordeals of standing in long queues in front of ATMs for cash.
ATMs in Andhra Pradesh and Telangana are facing the crisis again. This time, for a different reason.
People in these States are going for bank-runs. They have been going to the banks and withdrawing cash with the fear that the banks might collapse because of the number of scams that are coming out and also because of the “bail-in” clause in the controversial Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, reported The Economic Times.
Downed shutters and ‘no cash’ and ‘out of service’ signs plastered across several ATMs in Hyderabad, Visakhapatnam, Vijayawada and rural AP and Telangana have thrown life out of gear for many in the two States. The issue is graver in the rural areas with cash being filled in some of the ATMs only once in a month.
In fact, even on Rama Navami, many were forced to spend most of their time running from one ATM to the other in their quest for some cash to meet their festive requirements instead of spending some time in prayer and celebrating the festival, reports The Times of India.
Not just this but banks are facing massive queues where people are closing their fixed deposit and savings account. This has led to banks imposing unauthorised rationing on cash disbursals, ranging from Rs 20,000 to Rs 40,000 per day per person in their home branches.
Cash being shipped from other States
Andhra Pradesh and Telangana are now dependent on their neighbouring States for cash. While Telangana had to ship in cash from Maharashtra and Kerala, Andhra Pradesh did so from Odisha and Tamil Nadu.
The crunch is so severe, that despite efforts, only ATMs of big banks have cash and that too only for 60% of the day. Many banks have closed their ATMs three months ago, reported The Times of India.
There is also a severe shortage of Rs 2,000 denomination currency notes as they are neither being supplied by the Reserve Bank of India since September 2017 to banks nor are they coming back from customers in the form of deposits.
“With the approval of RBI, we moved cash from Maharashtra and Thiruvananthapuram in Kerala to Hyderabad to tackle the situation of accelerated withdrawals from ATMs and bank branches in January and February but did not do so in March. We usually try to ensure that cash is available in ATMs at least 94 percent of the time. Post demonetisation, following the cash crunch, we had taken several measures to ensure that ATMs had cash available for at least 85 percent of the time but in January 2018, this came down to 70 percent and is now hovering around 60 percent,” State Bank of India’s (SBI) Hyderabad circle chief general manager Swaminathan J told The Times of India.