ATMs in several states run out of cash, govt says currency unevenly distributed between states

ATMs in many cities across the country ran out of cash today.

People in the states of Telangana, Uttar Pradesh, Madhya Pradesh, Uttar Pradesh and Gujarat reported that they were unable to withdraw cash since several kiosks within their city had run out of money. 

Finance Minister Arun Jaitley said that he had reviewed the currency situation in the country. He assured that there was more than adequate currency in circulation and available with the banks. 

The finance minister said the temporary shortage had been caused by "sudden and unusual increase in some areas and is being tackled quickly".

Minister of State for Finance SP Shukla said that the problem was because some states had less currency and other states had less. The minister said that the government had formed state-wise committees and the RBI had also formed a committee to transfer currency from one state to the other. He said that the problem would be resolved within the next three days.

"We've cash currency of Rs 1,25,000 cr right now. There is one problem that some states have less currency and others have more. Government has formed state-wise committees and the RBI also formed committee to transfer currency from one state to other. It'll be done in three days," SP Shukla said.

The finance ministry held a meeting with the RBI last Thursday, to take stock of the situation, media reports said.

State Bank of India chairman Rajnish Sinha said the situation was a temporary one because of geographical factors. He said one reason was that that procurement season had come and payment to farmers had gone up. He added that things would start getting normal by next week.

"One reason is that procurement season has come and the payment to farmers have gone up. In Maharashtra and Mumbai there is no cash crunch as far as SBI is concerned," the SBI chairman told ANI.

In the next week, things will start coming back to normalcy. There is a department which monitors situations like this. This is not new. RBI has been given an indent to increase the flow of Rs 500 notes in the system," he added.

"Yes this is a temporary situation which is mainly due to geographical factors. There is one solution for it that a proper cash management system be maintained".

The cash crunch is a reminder of the demonetisation of Rs 500 and Rs 1000 notes undertaken by the government in November 2016 when a shortage of cash had led to non-functional ATMs and long queues.