Adjust Your Focus

Cash Crunch Caused By Spike In Withdrawals, Not Enough Deposits


Spike In Withdrawals, Not Enough Deposits Caused Cash Crunch, Data Shows

In many parts of the county, there have been reports of ATMs out of cash.

NEW DELHI:  A spike in cash withdrawals from banks over the last fortnight that people did not deposit into the banking sector has contributed to the cash crunch faced in several parts of the country, official statistics accessed by NDTV has indicated. This increase, finance ministry officials said, had led to a mismatch between the availability of cash and demand in several parts of the country.

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.


Source link

Subscribe to our newsletter