With only feeble signs of improvement late on Tuesday, cash shortage continued to hurt people across Telangana.
In the neighbourhoods of Hyderabad, most ATMs, including those attached to bank branches, remained cashless. Braving the summer heat, denizens were forced to run between banks or queue up to withdraw limited amounts.
“Cash shortage has been there for about a month now and turned severe over the past few days. It takes more than 20 minutes to get cash here,” A. Ramankanth, a resident of Tarnaka said while at Andhra Bank’s ATM in Tarnaka.
Like cash dispensing outlets at Tarnaka’s Andhra Bank, a few other banks only filled cash deposit machines, to restrict withdrawals to the bank’s account holders.
“Limited cash loaded at the ATM is getting exhausted in no time. Only cash deposit machine is functional and restricted to ICICI bank customers,” security personnel at ICICI Bank’s A.S. Rao Nagar Branch said.
On Tuesday, nationalised banks seemed worse hit than private banks. However, in upmarket areas of the city including Banjara Hills, Somajiguda, Hitech City and Gachibowli, many ATMs of private banks downed shutters or warded off visitors with “no cash” signs.
In response to RTI queries by D. Rakesh Reddy, founder of Factly, a data-driven portal, information provided by State Bank of India revealed a sharp fall in cash supply from Reserve Bank of India to SBI’s chests in Telangana. Between September 2017 and January 2018, the monthly cash supply to SBI was only ₹ 629 crore or one-third of the supply between November 2016 and August 2017.
Hoarding indicated
Data with Factly also suggests supply of high denomination ₹ 2000 has dried up. Mr. Reddy reasons that cash crunch and shortage of high denomination currency indicates hoarding, owing to trust deficit in the banking system.
“It appears there is cash hoarding and fixed deposits are being broken. There is an associated rise in the real-estate market, and the moneyed are able to pay in cash for land deals,” Mr. Reddy opined. RBI had refused to responds to Mr. Reddy’s queries.
Widespread shortage
The situation in smaller cities and towns of Telangana remained just as dire as the capital city on Tuesday. In Khammam, where, last month representatives of All India Students Federation protested with mock funeral proceedings of an ATM, banks continued to run dry. In Adilabad, toll-booths and petrol bunks handed out high-denomination notes in exchange for small change.
Telangana Circle of State Bank of India attributed cash shortage to accelerated withdrawals, while assuring improvement in supply within the next three days. The bank said it would take until end of April for normalcy to be restored, following increased infusion of ₹ 500 currency which RBI has promised.
