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Government to raise printing of Rs 500 notes by five times

18 Avril 2018

But is it possible to hoard cash to the level that it leads to cash shortage in the whole country? "Currency in circulation has not grown despite growth in the economy after demonetisation".

According to the latest Reserve Bank of India (RBI), cash in circulation as on April 06, 2018 is Rs18.4lakh crore which is very close to currency in circulation pre-demonetization which was Rs17.97lakh crore. Adequate cash is not loaded in the machines.

Further, as a matter of abundant precaution, RBI said it is also taking steps to move currency to areas that are witnessing unusually large cash withdrawals.

Minister of State in Finance Shiv Pratap Shukla told TV channels: "There is an issue of disparity". The government has formed a state-wise committee and RBI also formed a committee to transfer currency from one state to other. He promised to rectify the issue within three days but the problems are deep-rooted. "These notes alone can more than meet the demand of any month", he said. As opposed to an average demand of about Rs 20,000 crore a month, "in the first 13 days of April itself there was a demand of Rs 45,000 crore", he said. Farmers, weddings hit Cities and towns across Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan and Uttar Pradesh were said to have been affected by the cash crunch.

Officials of the Reserve Bank of India, who held a meeting with finance ministry officials, said cash was back in demand.

According to him, "Currency printing will increase from Rs 500 crore to Rs 2,500 crore per day of Rs 500 note".

"We have our fingers crossed this time", quipped one jeweller. Some ATMs are still being retrofitted to take the new 200-, 500- and 2,000-rupee notes that replaced the banned cash, and that may have contributed to the current shortage.

Within a month, it said, Rs 70,000-75,000 crore will be printed.

Congress president Rahul Gandhi said Prime Minister Narendra Modi has "destroyed the banking system".

One reason could be that since all the 2.2 lakh ATMs have not been recalibrated to dispense the new Rs 200 and Rs 50 notes, while at the same time Rs 2,000 notes are being phased out, cash is finding it hard to make its way to the people. A report by ANI quoting Rajnish Kumar, Chairman, State Bank of India (SBI) on Tuesday assured the people of the country that the situation of cash crunch is "temporary" and that normalcy will be restored within a week.

The problem of empty ATMs seems to have returned to haunt citizens in several parts of the country, such as Andhra Pradesh, Telangana, Karnataka, Bihar and Madhya Pradesh, prompting the government and Reserve Bank of India to swing into damage control mode to calm jittery depositors.

The state government has acknowledged that banks are short of cash and has taken appropriate action.

Their timely action by remitting sufficient cash to the Currency Chests here is a big relief in cash-starved situation when most of the states in the country are experiencing severe cash crunch.

Mamata Banerjee, chief minister of West Bengal, tweeted: "Is there a Financial Emergency going on in the country?"

Many people in the political circles are of the view that due to upcoming elections in several states, political parties have begun hoarding notes.

Government to raise printing of Rs 500 notes by five times