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Cash crunch spreads to other states; Finance Ministry keeping close watch

central government is aware of the problem of shortage of currency and it is infact checking with the banks on where the problem is

The problem it appears began from two states of Telangana and Andhra Pradesh where people complained of shortage of cash.

But now it is learnt that similar reports are also coming in from Maharashtra, Bihar and Gujarat.

The central government is aware of the problem of shortage of currency and it is infact checking with the banks on where the problem is.

The central government is also asking the Reserve Bank of India to ensure adequate supply of currency for now.

Despite the assurance from the Finance Ministry, the situation on the ground is getting critical.

This is because more and more states are reporting cash crunch and that the ATMs have run of the cash.

Union Finance Minister Arun Jaitley today acknowledged the cash crunch situation while also adding that there is more than adequate currency in circulation.

Sources blamed the unusual increase in cash withdrawal for the situation.

This has been warranted because of, it is believed, the ‘certain provisions’ in the proposed Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 as also the recent outbreak of new items that many a absconders have siphoned off money from banks and have fled the country.

The situation is Telangana and Andhra became grave enough that banks had to impose unauthorized rationing on cash disbursals.

There is also speculation that hoarding of Rs 2000 notes is on and this may be one of the reason why cash crunch has spread to other states.

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