SBI Chairman Rajnish Kumar on Thursday said that the problem of cash crunch will be resolved by Friday as currency…
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SBI Chairman Rajnish Kumar on Thursday said that the problem of cash crunch will be resolved by Friday as currency notes are being sent to states that are facing shortage of notes.
“It is not a uniform cash crunch problem. It is there in geographies like Telangana and Bihar. We are hoping that the problem will be resolved by tomorrow because cash is in transition and it is reaching these states by today evening,” Kumar told reporters in New Delhi.
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Holding cash hoarders accountable for the crisis, Kumar said the money should be recycled, meaning that if people withdraw money from the bank and the money needs to be deposited back as well.
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For the past few weeks, banks in several states, especially in UP, MP, Rajasthan, Gujarat, Telangana, Andhra and the poll-bound Karnataka have been facing severe cash shortages, with many ATMs showing ‘no cash’ signboards.
While the central bank has claimed that there is enough printing and supply of cash, the government attributed the unusual spike in cash demand to ongoing farm procurement.
Describing recent reports of cash shortage in the country as “logic defying”, state-run State Bank of India on Wednesday had said the possible reasons could be the declining income velocity of currency with the public in 2017-18 coupled with increased ATM withdrawals during the second half of last fiscal.
An SBI Ecowrap report authored by Chief Economist Soumya Kanti Ghosh said that currency in circulation in the economy had reached Rs 18.29 lakh crore by March 2018, surpassing its pre-demonetisation level of Rs 17.98 lakh crore.
Blaming “unusual demand” for currency shortages in some areas, the government on Tuesday announced it has decided to increase printing of Rs 500 notes by five times.
(With inputs from agencies)
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