Cash crunch haunts Hyderabad for six months

Hyderabad: There’s no change in the cash crisis in the city after six months of the demonetisation announced by Prime Minister Narendra Modi. Banks are still facing a cash crunch due to lesser supply of cash from the RBI.

An RBI source said there were two likely reasons for the present cash crisis. “A major cause could be the public is not circulating the cash they withdrew from banks. Another likely reason is there are rumours among netizens that the government will impose tax on bank balances. As per our records, the circulation of cash came down by 20 per cent compared to the pre-demonetisation period,” the source said.

Secretary of the Federation of Bank Employees’ Association M.S. Kumar said the number of deposits with banks came down and this was having an impact on the cash chests.

“The big branches that used to see deposits of Rs 50 lakh and above per day before the demonetisation are getting only Rs 2 lakh to Rs 5 lakh of deposits at present. But, the withdrawals are increasing day-by-day. The city is having about 1,000 branches of all banks, of which 250 are big branches. The big branches are facing the problem of lesser deposits and higher withdrawals. Due to this reason, bankers are distributing the available cash in a ration system. Those who are seeking withdrawals up to Rs 1 lakh are getting up to Rs 25,000,” he said.

Another source from the RBI said that the RBI supplied Rs 1,000 crore for Telangana banks and Rs 3,000 for the banks in Andhra Pradesh on March 15. “Recently, the RBI supplied some more currency. After demonetisation, both the Telugu states got Rs 35,000 crore. But, compared with other states, the crisis is still more acute in Telugu states. We are expecting some more cash by the end of this month,” the source explained.