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Cash situation improving across country, says govt

Sources say Andhra Pradesh and Telangana were distributing farm subsidy of Rs 4,000 per acre to each farmer in cash, one of the reasons for shortage

Parshant Mukherjee | New Delhi |

The cash situation across the country is improving with 86 per cent of the ATMs functioning normally on Thursday evening, senior government officials said. However, states such as Bihar, Jharkhand and Telangana are still facing some difficulty in finding cash as ATM operations are below 70 per cent there.

Sources said an additional Rs 1,000 crore is being moved to Bihar, which is among the worst-affected states where only 65 per cent of the cash machines are operational.

Andhra Pradesh and Telangana, which received the highest cash supply in the country in the last two years, are also facing cash shortage. “There are issues with certain societies which are cash guzzlers. Andhra and Telangana are these states. One of the reasons is that these states were distributing farm subsidy of Rs 4,000 per acre to each farmer in cash. The subsidy process amounts to nearly Rs 6,000 crore,” sources said.

On the tendency to hoard Rs 2,000 currency notes, which was cited as one of the reasons for the shortage, senior officials said, “Rs 2,000 notes have started flowing into the system since Wednesday.”

According to ministry officials, on the Andhra Pradesh government’s requests in February this year, fresh currency worth Rs 5,000 crore was despatched to RBI’s Hyderabad office with instructions to ensure appropriate distribution of the cash among currency chests in various circles so that cases of shortage at specific places do not arise.

According to RBI data, between November 2016 and March 2017, Rs 82,168 crore was supplied to the Hyderabad office of RBI which is the highest among all the offices of the central bank in the country.

There have been rumours that the passage of the Financial Resolution and Deposit Insurance (FRDI) Bill will lead to heavy monetary losses if a bank goes bankrupt. Fear among customers that their deposits may be used for bail-ins of banks under the FRDI Bill also triggered massive withdrawals in the two states.

In order to reach out and facilitate maximum number of people looking for convenient cash withdrawal, State Bank of India on Thursday said it is providing facilities of cash through ‘[email protected]’ initiative. Debit card holders of SBI and all other banks can withdraw cash from PoS machines installed by SBI across various merchant locations.

As per the RBI guidelines, a customer can withdraw Rs 1,000 in Tier I and Tier II cities whereas Rs 2,000 can be withdrawn in Tier 3 to Tier 6 cities per day per card. At present, the bank will not be charging any fees.

SBI has a total of 6.08 lakh PoS machines of which 4.78 lakh PoS machines are enabled to dispense cash to the customers of SBI and banks which have enabled this facility for their customers.

Loaded ATMs across the country

86% ATMs are functioning normally across the country

Chandigarh: 99%

Himachal Pradesh: 99%

J-K and Maharastra: 90%

Northeast and Orissa: 90%

Andhra Pradesh: 75%

Telangana: 69%

Bihar: 65%

Jharkhand: 67%

Karnataka: 76 %

Tamil Nadu: 90%