Union Finance Minister Arun Jaitley on Tuesday said there was more than adequate currency in circulation in the country.
A review of the the currency situation indicated that the temporary shortage of notes was mainly due to sudden and unusual increase in some areas, he said.
“Overall, there is more than adequate currency in circulation and also available with the banks,” Mr. Jaitely said in a tweet . “The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly,” he further tweeted.
The official handle of the Ministry of Finance tweeted, saying: "The Govt continues to have in stock adequate currency notes of all denominations, including of Rs.500, 200 and Rs.100 to meet any demand. The Government would like to assure all the people that there have been adequate supply of currency notes which have met entire demand so far."
Media reports talked about currency shortage in several areas in Telangana and Andhra Pradesh in the last few weeks. Similar reports are coming in from eastern Maharashtra, Bihar and Gujarat.
Long queues for closure of FDs
Reports pointed out that banks in the two States witnessed long queues for closure of fixed deposits as well as withdrawal from saving bank accounts. They cited concerns over the proposed FRDI (Financial Resolution and Deposit Insurance) Bill and the PNB (Punjab National Bank) scam as reasons for the withdrawals.
The Finance Ministry said cash shortages were due to unusual spurt in currency demand in the last three months. "In the current month, in the first 13 days itself, the currency supply increased by Rs. 45,000 crores. This unusual spurt in demand is seen more in some parts of the country like Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar," a Ministry statement said.
The Government of India, along with the Reserve Bank of India, had taken all steps to meet this unusual demand, the Ministry said.
RBI clarifies
The Reserve Bank of India (RBI), in the meanwhile, said that it had sufficient cash in its vaults and currency chests. Nevertheless, printing of the notes had been ramped up in all the four note presses, it added. `` The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and the re-calibration of ATMs being still underway,'' the apex bank said. It went on to add that it was closely monitoring both these aspects. Further, as a matter of abundant precaution, the RBI was also taking steps to move currency to areas which were witnessing unusually large cash withdrawals, a release from the apex bank said.
