Cash Crunch Caused By Spike In Withdrawals, Not Enough Deposits
The government had yesterday acknowledged that there was “a temporary shortage” of cash in some areas but has been able to pinpoint a reason for the crunch. A quick analysis of the figures available at the finance ministry’s banking department has suggested some of it could have to do with excessive withdrawal of money from banks in some states.
In Andhra Pradesh, for instance, officials say people withdrew Rs 483 crore from their bank accounts on 6 April. But only Rs 219 crore was deposited into the banks by customers. In adjoining Telangana the same day, cash withdrawals were 130 per cent more than deposits.
On Monday, people withdrew Rs 29,475 crore from banks but only Rs 23,651 crore made its way to the banks.
“Yes, there has been a definite slowdown in the number of people making deposits,” Rabindra Gupta of the All India Bank Officers Confederation told NDTV.Mr Gupta said it was a matter of concern where the cash was going since the total cash pumped into the economy had gone up over the last two years.