Chidambaram Blames Cash Crunch On Loss Of Confidence In The Banking System
The cash shortage in certain Indian states is a fallout of the recent banking frauds in the country. That's according to the former finance minister P Chidambaram.
“I suspect ordinary people are withdrawing cash but not putting back into the banks their surplus cash,” Chidambaram said in a series of tweets. “It is possible that there is some loss of confidence in the banking system, thanks to the bank scams.”
Reports of ATMs running dry over the past couple of weeks have emerged from Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar. The government and Reserve Bank of India officials attributed the shortage to unusual local demand. Finance Minister Arun Jaitley called the cash crunch a “temporary shortage”. This has been pegged to various ranging from elections to cash hoarding, and farm payout during the procurement season.
The RBI said that its largely because of logistical issues of replenishing the ATMs.
In a string of tweets, Chidambaram said that the RBI's defence was unsatisfactory. “If RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage,” he tweeted.
"Cash is back with a vengeance" says Navrose Dastur, MD, NCR Corp, India. I support digitisation, but Govt cannot force the pace of digitisation or arbitrarily reduce the supply of cash.
April 18, 2018The senior Congress leader added that the “ghost of demonetisation” had come back to haunt the government and the banking regulator. “Why are ATMs still bring re-calibrated even 17 months after demonetisation,” he questioned.
After demonetising 500 and 1000 rupee notes, Govt printed Rs 2000
April 18, 2018
notes! Now, Govt is complaining that Rs 2000 notes are being hoarded!! We always knew that Rs 2000 notes were printed only to help hoarders.He added that the government or RBI cannot arbitrarily control the supply of cash. "A government is obliged to provide as much cash as the people need at any given time," Chidambaram said.
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