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Cash crunch continues in Andhra, Telangana; despite RBI intervention!!!

Fearing the banks would collapse, the public from both the states are withdrawing money

With the cash crunch continuing in banks and ATMs across Andhra Pradesh and Telangana, the situation is said to have been triggered from the fact that the people withdrew in large numbers due to fear of losig deposits as per clause in FRDI bill.

The situation remains worrisome despite the fact that RBI has made arrangements for cash inflow from the Reserve Bank of India (RBI).

It need be mentioned that the contentious FRDI Bill aims to set up a Resolution Corporation which will monitor financial companies such as banks and categorize them according to their risk profiles while also preventing them from going bankrupt by writing down their liabilities.

Fearing the banks would collapse, the public from both the states are withdrawing money from ATMs and banks.

The fear and apprehension is despite the fact that the Union Government has given out a clarification that the bail-in clause will not be used for public sector banks (PSBs).

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