Severe cash crunch was faced in India following November 8 ban on high-value currency notes. The government said there has been adequate supply of currency notes to meet entire demand. The currency supply increased by?45,000 crore in the first two weeks of April, it said.
Amid concerns over cash crunch in ATMs across the country, the government has chose to increase printing of Rs 500 notes by five times. Tajganj resident Mohammad Saif said, "I have visited 5-6 ATMs since morning".
"We print about 500 crores of Rs 500 notes per day".
According to reports, officials of the Finance Ministry held a meeting with the Reserve Bank of India to take stock of the situation.
State Finance Minister Jayant Malaya admitted to currency shortage but maintained that black marketing of Rs 2,000 notes could not be ruled out. "In a month, supply would be about 70000-75000 crore", ANI quoted SC Garg, Secretary, Department of Economic Affairs as saying.
Several netizens took to Twitter and expressed their disappointment over the issue. The RBI said shortage "may be felt" in some pockets largely due to logistical issues of replenishing ATMs frequently and the recalibration of ATMs being still underway.
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Former Finance Minister P. Chidambaram said the government was "obliged to provide as much cash as people want and the government and the RBI can not arbitrarily control the supply of cash".
Experts blamed a series of recent developments for suspected cash hoarding, resulting in a shortage of notes. They are more than adequate to meet the transaction demand of customers... Bankers also attributed the present crisis to skewed flow of cash in the economy with people reluctant to deposit Rs 2000 notes at branches, fearing further shortage. There is one problem that some states have less currency and others have more. Over the last few weeks, the higher rate of withdrawals can be explained, to a certain extent, in some states.
For the last few weeks, South Indian states including Telangana and Andhra Pradesh have reportedly seen ATMs go dry. As SBI's Sinha pointed out, one reason for a greater need for cash is that "procurement season has come and that payments to farmers have gone up". He added that the temporary shortage of currency in some areas was being tackled. Earlier, on an average, the government used to supply Rs 20,000 crore per month, it said.
She also asked whether a "financial emergency" was going on in the country.
Already huge bank defaults in Punjab National Bank, ICICI bank scam, and evasion of thousands of crores by big business magnates are making round every day in the country, leading to loss of people's faith in the banking system.