Money & Banking

How Assembly elections sucked cash out of AP, Telangana

G NAGA SRIDHAR M SOMASEKHAR Hyderabad | Updated on January 13, 2018

ATMs in cities and towns across Telangana and Andhra Pradesh have no cash to dispense, leading to queues reminiscent of the demonetisation days - Photo: Nagara Gopal

Money supplied to poll-bound States to ensure voters were not inconvenienced

If you are in Telangana or Andhra Pradesh and cannot get cash out of an ATM, blame it on the Assembly elections in distant UP, Manipur or Punjab.

The last several days, a large number of cash dispensers belonging to both public and private sector banks have been either ‘temporarily out of order’ or simply ‘shut down’.

While a top executive of the State Bank of Hyderabad (SBH) blamed it on shortage of ‘currency supply’, RBI sources told BusinessLine the real reason: cash supply stepped up in the last six weeks to poll-bound Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa.

This was “to ensure uninterrupted cash availability for voters”, they said.

According to a senior SBI official, there has been no shortage of cash in places like Lucknow, Allahabad, Mumbai, Guawahati and Kolkata.

“There is shortage in the Telugu-speaking States and in Karnataka to some extent,” he said, without attributing any reasons. Hopefully, the situation will improve soon, he said.

There is also a trend of withdrawing higher amounts of cash now, given the experience of the demonetisation days, and this is leading to shortages.

A shortage of cash is also being reported in other States, albeit to a lesser degree, and temporarily.

Apart from a possible ‘diversion’ of currency to the election States, hoarding of ₹2,000 and ₹500 notes is another reason, said an Andhra Bank official. Interestingly, local markets and business centres have been reporting a jump in cash transactions in the past few weeks.

Bankers expect the crunch to ease in about a week, with the Assembly elections coming to a close on Thursday.

“Yesterday, a large consignment of currency reached Vizag from one of the printing presses. Hyderabad is also expected to receive a tranche,” an RBI source said.

Published on March 09, 2017

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