The news of not having cash in the bank’s ATMs across the country has once again reminded of the note-period. People on the social media are sharing photos of ATMs held on a board ‘No Cash’.
In Bihar, Gujarat, Andhra Pradesh, Telangana, Maharashtra, Rajasthan, Uttar Pradesh and Madhya Pradesh, the situation is being said to be more severe.
Recent reports of the Reserve Bank also say that the system has adequate cash in the system. According to the Reserve Bank of India’s April 6 report, 18.17 lakh crores were in circulation.
The Reserve Bank says that the amount of cash currently in cash that is in circulation is more than the ban on bondage.
Finance Minister Arun Jaitley also said on Tuesday that the condition of cash in the country has been reviewed. Overall, more than enough cash is in circulation and banks also have it. Sudden and increased demand in some areas has created some problems in some places and it will be settled soon.
Minister of State for Finance Shiv Pratap Shukla also repeatedly reiterated Jaitley’s statement and said there is no shortage of cash, it is a different matter that if the cash is much less then there is more to it. Everything will be fine in two to three days.
ATM empties, wandering rates for cash
So the question arises that there is no cash in the ATM despite having sufficient cash in circulation. Are some people hoarding a large number of cash? It means that he has taken out money from the banks, but then he has stopped it instead of keeping it in the system. Or banks have a shortage of currency notes and printing of notes from machines is decreasing.
Banking experts believe there may be several reasons for the lack of cash in the system.
Hoarding of two thousand notes
On November 8, 2016, along with a declaration of 500 and 1000 rupees, prime minister Narendra Modi had announced to bring a new note of 2000 rupees. So, some people started raising the notes of 2000 rupees. Madhya Pradesh Chief Minister Shivraj Singh Chauhan has alleged that a conspiracy to disappear 2000 rupees notes is being planned to disappear from the market.
Shivraj said on Monday, “Before the ban, there was a circulation of 1.5 lakh crore rupees, and after that it was raised to Rs 16 lakh crore, but the notes of 2000 rupees are disappearing from the market.”
Banking Expert Kajal Jain told the BBC, “This is a matter of detecting investigating agencies, but it is certain that the amount of money that people are withdrawing from the banks is not coming back in the banking system, meaning the people Are stopping. ”
Kajal further says, “If you believe the government’s figures then you will have to say that the currency is hoarding, and if it is not so, then there is a lack of cash in the banking system.”
Fear of FDRI bill
It is also discussed in the media on the social media that after the introduction of the Financial Resolutions and Deposit Insurance (FDRI) bill, the funds deposited in banks are not guaranteed.
In order to scam around Vijay Mallya’s State Bank about 10 thousand crores, scam over Rs 13 thousand crores in Nirav Modi and Punjab National Bank of Mehul Vigilance, ICICI Bank also sums up thousands of crores of debt, Trust system trusts.
These reports have raised the FRD fear among the customers. It has been made in the bill that if a bank stays in financial crisis for some reason or becomes bankrupt then it can be withdrawn from depositor’s money.
Yes, the government is guaranteeing the return of at least one lakh rupees to the account holder. That is, if you have 5 lakh rupees in the bank and the bank becomes insolvent, then you guarantee that the bank will only return one lakh rupees to this effect.
However, Ramachandran of Banking Expert and Vice President of BNP Paribah says that there is no truth in these stories. Ramachandran says, “It is fine that many big bank scams have come up in the past few years, but there is a lot of strongness in the Indian banking system, they were standing firmly during the 2008 recession.”
But the Modi government is also troubled by the ongoing banking scandals and the news agency PTI has said in the context of the sources that the Parliamentary Committee has summoned Reserve Bank Governor Urjit Patel on 17th May. Former Prime Minister Manmohan Singh is also a member in this committee headed by Veerappa Moily. The committee will question the Governor on the shortcomings in banking scandals and the financial sector.
New financial year and payment to farmers
Another reason for the lack of cash is being explained and that is the harvesting of crops and the payment to the farmers. However, banking expert Kajal Jain does not consider this a big reason. He himself asks, “The crops are cut at this time every year, then why not every year in April, there would be less cash?”
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Apart from this, one of the reasons for the problem is that ATMs are not ready for 200 notes. So far only 30 percent of ATMs have been calibrated with Rs 200. That is, 70 percent of ATM 200 is not capable of giving a note. Not only this, it was also revealed in the RBI report last week that on average, 30% of ATMs are poor in the country.
The crisis has also been speculated by the government, hence the efforts of the damage control have also begun.
Economic Affairs Secretary SC Garg said on Tuesday, “In the country’s currency circulation of Rs 18 lakh crore, we still keep in the Rs 2.5 trillion crore in stock, to face any problem of cash in the country. There is enough supply from where the demand came from. The work of currency printing has also been increased. ”
Decrease in Deposit Growth
Statistics of the banking sector say that the withdrawal of money from the bank is more than depositing. In the financial year ending March 2018, the deposit amount was 6.7 per cent in the bank, compared to 15.3 per cent during the same period of the year 2016-17.
As far as the credit growth of the bank is concerned, it was 10.3 percent in 2017-18, while it was 8.2 percent during 2016-17.
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