Cash crunch comes to Tamil Nadu too

CHENNAI: The cash crunch reported in several States including the poll-bound Karnataka, has reared its head in parts of Tamil Nadu too. At certain places in Coimbatore, Ooty and Vellore, several ATMs reportedly went dry resulting in enormous difficulty for the members of the public and tourists as well, in withdrawing cash. In Nilgiris district, known for the oldest mountain ranges, for instance, many faced difficulties in withdrawing the cash from ATMs at Ooty and Coonoor areas. Following the advent of summer, a large number of tourists are likely to visit the hill stations in the coming days and they are bound to land in a precarious position if the situation does not improve, said sources.

The recent cash shortage experienced by the public in many parts of the country has created panic and apprehension as to whether another demonetisation exercise would follow. In order to ease cash crunch at ATMs, the Bank Employees Federation of India - TN has urged the Centre to introduce people-friendly measures like waiving off charges for usage of debit cards, recalibrating ATMs to dispense Rs. 200, among others, to build people's confidence.

"Though Central Government and Reserve Bank of India ought to explain about the present situation, there are certain basic measures that the government and RBI have to take to overcome this shortage," claims Bank Employees Federation of India - TN president T. Thamilarasu and its general secretary C. P. Krishnan. "There should not be any charge for usage of debit cards. Otherwise this usage will be reduced and people will be driven to more cash usage. Also, ATMs should be recalibrate to dispense Rs. 200 notes introduced recently and the cost of recalibration should be borne by the Government. This will ease the circulation," they said.

Putting forth certain basic measures which the Government and RBI should take to overcome the present shortage, they said these measures, if taken, would send a strong positive message among the people and build confidence among them. "We urge the Centre and RBI to consider our suggestions seriously," Tamilarasu and Krishnan appealed on Wednesday.

Pointing out that the cash in circulation is Rs 18.3 lakh crore, which is higher than demonetisation level, according to RBI, federation said when the demand for cash grows, there needs to be increase in cash circulation. Accordingly the cash in circulation has not increased to the extent of the demand. That needs to be increased. 

Further, questioning the rationale of introducing Rs 2,000, they said this currency would not help and what the public needed is the reintroduction of Rs 1,000 denomination and withdrawal of Rs 2,000 notes slowly. In addition, currency notes of 500, 200 and 100 denomination should be printed in large numbers. Also, the FRDI (Financial Resolution and Deposit Insurance) Bill should be immediately withdrawn to discourage people from developing the tendency to keep cash at home.

ATMs run dry in Ooty, Vellore and Coimbatore
The cash crunch reported in several states including the poll-bound Karnataka, has reared its head in parts of Tamil Nadu too. At certain places in Coimbatore, Ooty and Vellore several ATMs reportedly went dry resulting in enormous difficulty for public and tourists as well, in withdrawing cash.

In Nilgiris district, known for the oldest mountain ranges, for instance, many faced difficulties in withdrawing the cash from ATMs in Ooty and Coonoor areas. Following the advent of summer, a large number of tourists is likely to visit the hill stations in the coming days and they are bound to land in a precarious position if the situation does not improve, said sources.

According to a bank official in Coimbatore, there are 250 State Bank of India ATMs in Coimbatore region and owing to shortage of Rs.500 notes, the ATMs have been loaded with currency notes of Rs.100 and Rs.200 denomination. But, these were exhausted within hours and as a result many ATMs went dry. When this was taken to the knowledge of the RBI, the bankers were assured that '500 notes would be dispatched within 2 or 3 days. "They said that the situation will improve soon," the official pointed out.

Those in Vellore too experienced similar pangs with many ATMs not dispensing cash. Ambur, Vanniyambadi, Tirupattur, Gudiyatham, Katpadi, Ranipet, Arcot and Arakkonam, too, in the district were affected as a result.

The Reserve Bank of India said the shortage may be felt in some pockets due to logistical issues and clarified that there is sufficient cash in RBI vaults. Currency in circulation has not grown despite growth in economy after the demonetisation in November 2016. Currency in circulation on November 4, 2016, was Rs 17.74 lakh crore. Currency in circulation now stood at Rs 18.04 lakh crore, it was pointed out.