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Cash Crunch: Government to raise printing of Rs 500 notes by five times

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NEW DELHI: Amid concerns over cash crunch in ATMs (Automated Teller Machines) in different parts of the country, the government on Tuesday said that it has taken steps to ramp up the minting of Rs 500 currency notes by five times.

Briefing the media, S C Garg, Secretary, Department of Economic Affairs said, “We print about 500 crore of Rs 500 notes per day. We have taken steps to raise this production 5 times. In next couple of days, we’ll have supply of about 2,500 crore of Rs 500 notes per day. In a month, supply would be about 70,000-75,000 crore.

Earlier on Monday, there were complaints of cash shortage in eastern Maharashtra, Bihar and Gujarat. This was almost a month after ATMs in Andhra Pradesh and Telangana had run dry. Since Tuesday morning, similar reports started emerging from different parts of the country, following which the finance minister issued a statement.

READ ALSO: Adequate currency in circulation, shortage temporary: FM Arun Jaitley

Finance Minister Arun Jaitley took to micro-blogging site Twitter to assuage concerns over currency shortage. He said there is more than adequate currency in circulation and the same is available with banks. He cited ‘sudden and unusual increase’ (in demand) in some parts of the country, as the reason behind the crisis.

Earlier in the day, a statement by the finance ministry confirmed reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country.”There has been unusual spurt in currency demand in the country in last three months,” it said.

READ ALSO: Currency shortage spreads to more states

While currency supply increased by Rs 45,000 crore in the first 13 days of April, “unusual spurt in demand” was seen more in some parts of Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, it said.

Minister of State for Finance Shiv Pratap Shukla said the government has formed a committee to address the problem of currency shortage in certain states and the issue would be resolved in next 2-3 days.

SBI Chairman Rajnish Kumar said it would not be correct to state that there is a currency shortage in the country. There has been an “imbalance” due to the crop procurement season, when demand for currency goes up. He said Punjab, Madhya Pradesh and Uttar Pradesh are seeing heightened demand due to procurement season.

According to RBI data, currency in circulation as on April 6 was Rs 18.17 lakh crore, which is close to the number at the time of demonetisation. Since the amount of currency put out by the Reserve Bank of India (RBI) and government printing presses is adequate for normal transactions, bankers believe there is hoarding of the Rs 2,000 notes. Nearly Rs 5 lakh crore worth of Rs 2,000 notes were printed after demonetisation.

Updated: April 17, 2018 — 9:57 am

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