Long queues again? ATMs go dry as many states face cash crunch: Top updates

Several states are facing a cash shortage despite currency flows in the economy at the pre-demonetisation level

A cash crunch has been reported in several states of India -- Karnataka, Maharashtra, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh and Telangana. People are facing a huge monetary crisis, with a majority of automated teller machines (ATMs) running out of cash. In Bihar's Patna several ATMs have gone 'out of service' causing inconvenience to the locals.

Taking stock of the situation, Union Finance Minister Arun Jaitley said: "We have reviewed the currency situation in the country; there is more than adequate currency circulation and it is available with the banks... a temporary shortage caused by the sudden and unusual increase in some areas is being tackled.

Here are the top developments in the crisis caused by a sudden shortage of cash across several states and what the government is saying:1. Life gets miserable for many Indians, especially traders: Despite the currency flow in the economy going back to the pre-demonetisation level, ATMs are going dry making life miserable for many residents, especially traders. Many are running from one ATM to another in search of currency notes.

ALSO READ: Demonetisation redux? ATMs again running dry across states amid cash crunch

2. Some ATMs not dispensing more than Rs 5,000: Only one ATM at State Bank of India’s branch had cash, but the machine was dispensing only up to Rs 5000 cash and that too only in the form of Rs 100 currency notes, according to The Times of India report.

The people in Delhi, on the other hand, said that most of the ATMs are dispensing only Rs 500 notes.

3.Hyderabad, Varanasi office-goers face troubles: In Hyderabad, office goers have told news agency ANI, that they have been unable to withdraw cash from ATMs in several parts of the city since yesterday. There are reports from Varanasi as well of people saying there is no cash at ATMs since yesterday, said TOI report.

However, people in Madhya Pradesh claimed that they have been facing a cash crunch for the last two weeks.

4. Govt's meeting with RBI on cash shortage across states: The finance ministry held a meeting with the Reserve Bank of India (RBI), banks, and state government officials on Thursday to take stock of cash availability after receiving complaints of the dearth of money in some states. The non-release of funds by the Centre is being cited as one reason for the cash crunch.

RBI raises ATM withdrawal limit to Rs 10,000 a day

Up to Rs 1 lakh can be withdrawn per week from current accounts

Further relaxing the rules for cash withdrawal from automated teller machines (ATMs), the Reserve Bank on Monday raised the cap from Rs 4,500 a day to Rs 10,000 for each card, but within the existing weekly limit of Rs 24,000 per week, with immediate effect.

Besides, current account holders can now withdraw up to Rs 1 lakh per week. Earlier, they were allowed to withdraw only up to Rs 50,000 in cash in a week. This facility has been extended to overdraft and cash credit accounts as well.

Already the cash availability has improved vastly in cash vending machines as more new notes are getting released in the system, but the weekly limit persists. The enhanced withdrawal limit, will help banks to bring down the transaction cost, which has now been waived off by the central bank till March.

The RBI had imposed these limits in November after the government announced a ban on all high-value currency notes, and said it would replace them with new notes.

The withdrawal limits are unlikely to be removed completely until the RBI has supplied the economy with sufficient amount of new notes, analysts said.

Braking News :

• Top 5 biggest life insurance myths
• Arun Jaitley says July 1 rollout of GST 'more realistic'
• Samajwadi Party feud: Mulayam says he might contest against son Akhilesh
• Indian IT firms get jitters as team Trump flashes red card on H1B visa

Lining up at the ATM? Here's how your cash actually gets there

From the printing press to the ATM, its a journey that starts with calculations at the Reserve Bank of India

Everyone likes money, especially with the Modi government's Demonetisation policy in full swing. But how does the Rs 100 note, which has reasserted its real value, and the new Rs 500 and Rs 2,000 notes reach your nearest automated teller machine (ATM)?

From the printing press to the ATM, its a journey that starts with calculations at the Reserve Bank of India and culminates in the execution of a very complicated logistics plan.

From the printing press to the ATM:

1) Finding our the country's cash needs: The RBI first calculates India's annual cash requirement. According to an Indian Express report, the calculation takes into account the quantity of notes in circulation, those which might have been destroyed, and how many would be needed for replacement. Other factors, the report added, such as projected GDP growth and inflation are also accounted for. The process starts early in the calendar year, before the new fiscal year begins, and RBIinforms the Ministry of Finance about the amount of currency that needs to be printed.

2) Telling the printing presses: India has four printing presses: One in Nashik (Maharashtra), one in Dewas (Madhya Pradesh), another in Mysuru (Karnataka( and the last in Salboni (West Bengal). These presses print out the notes after an order is placed with them and instructions are received regarding denominations and quantity of notes to be printed. The high-security paper used to print the notes comes from the currency paper mills in Mysuru and Hoshangabad.

3) Distributing the notes across the country: Once the notes have been printed, they need to be distributed across 19 regional centres of the RBI. Along with these centres, there are 4,000currency chests which serve areas not covered under these centres and they too need to receive the freshly printed notes. However, as explained by the IE report, even after these notes have reached their destinations, they do not hold any value till they are backed by cash or securities of equal value.Read more

Decoding the big ATM problem: India just doesn't have enough engineers for the job

Decoding the big ATM problem: India just doesn't have enough engineers for the job

Ten days on, the banking sector is yet to recover from the government's Demonetisationmove. There are two main reasons for this. One, there is just not enough new notes being supplied by the Reserve Bank of India (RBI), even after running its printing presses over time. And the second, there are not enough technicians to recaliberate automated teller machines in the countries.

Only once the ATMs are recalibrated and enough Rs 500 notes are printed, the chaos will be under control, say bankers.

Even as top bankers are assuring public that the situation will normalise in a week, bankers behind the counters think otherwsie.

The new 500 notes have not been released in rural areas. Most of the branches just 20-30 kilometers from metros have not seen the new 500 rupee note as the currency chests are currently available only in cities. Even in metros, the stockpile of the new notes is thin.

A public sector bank branch manager in the outskirt of Kolkata told Business Standard that the currency chests are now dispensing soiled, old Rs 100 notes. Several customers withdrawing money from banks confirmed this. Customers who have withdrawn Rs 100 notes are not releasing them for daily transactions. Hoarding has ensured that the central bank is being forced to release old scrapped notes to the general public again.

The lack of technicians is the bigger problem.Read more.