Money & Banking

Cash crunch continues in AP, Telangana

G Naga Sridhar Hyderabad | Updated on January 15, 2018

Ration cash to customers: RBI tells banks

The cash crunch being experienced in Telangana and Andhra Pradesh is expected to continue till the month-end even as the Reserve Bank of India (RBI) has asked banks to ‘prioritise’ withdrawals.

This contradicts RBI’s own directive on lifting of withdrawal limits from March 13, 2017.

“Even though the restrictions/limits on cash withdrawals from savings and current accounts have been removed, branch managers should prioritise withdrawals depending on cash position, till the situation improves,” Jogi Meghnath, General Manager (Cash Issue), Reserve Bank of India, Hyderabad, told bankers at the State Level Bankers Committee (SLBC) meeting held here on Thursday.

R Subramanian, Regional Director, RBI, said the frequency of currency remittances from printing presses had decreased in the recent past. “We have repeatedly requested our central office for more cash, in view of the demand in the two States,” he added.

There was no reverse flow of currency to banks and currency chests were not building up balances, he said.

The other possible reason for cash crunch, besides reduced remittances from printing presses, could be the ‘high’ demand for cash in the two States, Subramanian said.

RBI had so far received ₹2,600 crore cash in the month of March for distribution in the two States. It is expected to receive another ₹1,150 crore by the month-end.

Cash from ATMs

According to RBI data, there are 8,462 ATMs in the two States, of which 977 (about 10 per cent ) are not working.

ICICI Bank tops the list of non-functional ATMs with 335 ATMs not working due to cash crunch, followed by Axis Bank with 227 and HDFC with 146.

Expressing his displeasure over the development, the RBI official asked these banks to take corrective steps.

Meanwhile, the RBI has called for a meeting of all banks on Friday to take stock of the cash crunch.

Published on March 16, 2017

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