Cash crunch: Arun Jaitley says more than adequate cash in circulation

A guard stands inside an 'out of service ATM' in Bhopal. Pic/PTI

Several parts of Andhra Pradesh, Telangana, Madhya Pradesh, Bihar and poll-bound Karnataka have reported shortage of currency and ATMs running dry, which the government yesterday attributed to unusual spurt in demand in last three months.

Finance Minister Arun Jaitley said in a tweet, "Overall, there is more than adequate currency in circulation and also available with the banks. The temporary shortage caused by 'sudden and unusual increase' (in demand) in some areas is being tackled quickly." The government is checking with banks and the Reserve Bank of India to ensure adequate supply of currency.

Arun Jaitley

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. 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 set up state-wise committee and RBI has also formed a committee to transfer currency from one state to other, because for money transfer you need the permission of the RBI. It (the shortage) will be solved in 2-3 days," he said.

RBI report shows that the currency in circulation in the country has reached the pre-demonetisation level of about Rs 18 lakh crore. The government said there has been adequate supply of currency notes to meet entire demand.