Cash crunch situation overrated, dispensing Rs 33K cr cash daily: SBI Chairman Amid reports of no cash in ATMs, SBI chairman Rajnish Kumar said "I don't think it's right to make statement that there is shortage of currency, ATM availability at around 88% which is normal." Citing RBI data, SBI chairman said that currency in circulation as on April 6 was Rs 18.17 lakh crore, which is more than the currency at the time of demonetisation. Cash crunch in ATMs may also be the result of a slowdown in deposit growth.

NEW DELHI: The government said there was a temporary shortage of currency notes in some areas because of an unexpected spurt in demand but said there was no need to panic amid reports of ATMs emptying out in parts of the country, sparking fears of a cash crunch reminiscent of the one following November 2016’s demonetisation initiative.The central bank attributed the shortage to cash machines not being replenished frequently enough or not being adjusted to accept new Rs 2,000 and Rs 500 notes introduced after demonetisation.There were enough notes to meet the surge, the government said. The Reserve Bank of India ( RBI ) said its vaults and currency chests had sufficient levels of cash. Nevertheless, printing of Rs 500 notes was being stepped up fivefold to increase supply.“The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly,” finance minister Arun Jaitley tweeted after reviewing the situation. “Overall, there is more than adequate currency in circulation and also available with the banks.”RBI said printing of notes had been accelerated at all four presses. “The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and recalibration of ATMs being still underway,” the central bank said.“RBI is closely monitoring both these aspects. The Reserve Bank of India is also taking steps to move currency to areas which are witnessing unusually large cash withdrawals,” it said.The finance ministry said there have been reports of cash shortages and ATMs running dry or not working in some parts of the country.“In the current month, in the first 13 days itself, the currency demand was Rs 45,000 crore,” according to the ministry release. “This unusual spurt in demand is seen more in some parts of the country like Andhra Pradesh Telangana , Karnataka, MP and Bihar .”That’s despite supply exceeding pre-demonetisation levels. The ministry said there was enough currency to fully meet the extraordinary demand generated so far. “We continue to have in stock adequate currency notes of all denominations, including of Rs 500, Rs 200 and Rs 100 to meet any demand,” it said.Economic affairs secretary Subhash Garg also said note supplies were more than adequate.“There is no cash crunch in the country,” he said.“There is around Rs 18 lakh crore currency supply now, which is close to the circulation during the demonetisation period. We keep Rs 2.5-3 lakh more currency in stock for excess demand.” Garg said monthly demand had shot up to Rs 40,000-Rs 45,000 crore in the past few months, twice the usual Rs 20,000 crore. April has seen an even sharper spike.“This month, in the first 13 days alone, there has been demand of about Rs 45,000 crore of currency,” he said, adding that about Rs 2 lakh crore of currency is available for distribution even now after meeting the higher demand of the past few months.The accelerated printing of Rs 500 notes will alleviate any perceived shortage and meet demand if it does shoot up further. “Very soon, in the next couple of days, we will have a supply of about Rs 2,500 crore worth of Rs 500 notes per day, which would mean in a month, supply would be about Rs 70,000-75,000 crore,” Garg said.“These notes alone can more than meet the demand of any month.”Steps were being taken to ensure that ATMs are supplied with cash and get non-functional ones working again, the ministry said.State Bank of India, the country’s biggest bank, said the issue had been overblown and there was no cash crunch. “Before demonetisation, the currency with the public and in the system was Rs 17.8 lakh crore, which has gone up to Rs 18.28 lakh crore, so where is the shortage?” SBI chairman Rajnish Kumar told ETNOW, calling on people not to panic.Garg said the government was trying to analyse the reasons for the spurt in demand. Speculation about shortages and possible hoarding of Rs 2,000 notes could have also contributed to the problem.“There might also be some sort of a feeling in some people that if the cash runs out, why not draw and keep it in reserve? It may be safe... a kind of shortage mentality,” Garg said at a media briefing, urging people not to unnecessarily stock up on cash and increase dependence on digital payment methods.Garg indicated that there may be some hoarding going on.“In the system, there are about Rs 6.70 lakh crore of Rs 2,000 notes. They are more than adequate to meet the transaction demand of customers... But of late we have noted somewhat lesser inflow coming back from circulation,” he said. “We have not got this investigated, but you can assume that this is the one note which is most suitable for people to keep with themselves.There may been some tendency of some people using Rs 2,000 notes, but that does not affect the overall supply of the Rs 2,000 notes.”RBI has stopped printing Rs 2,000 notes reasoning that there is enough supply of the highest-denomination currency.Principal economic advisor Sanjeev Sanyal also said there was no need to panic and this was not a repeat of demonetisation by any stretch of the imagination.“This is not Demonetisation 2.0 and nor is this, as some people have speculated, something to do with the standing of the banks. The banking sector is in absolutely no risk at all,” he told ET NOW.On the issue of currency circulation crossing predemonetisaiton levels, Garg said, “At the time of demonetisation, the currency in circulation was Rs 17.5 lakh crore. Currency in circulation now is about Rs 18 lakh crore. So it is in absolute numbers higher than at the time of demonetisation."And, he pointed out, demonetisation had taken place one-and-a-half years earlier.“If we had taken that growth path, we would have still been much higher. If the currency had grown as it was growing before demonetisation, probably it would have been somewhere at the level of Rs 22-23 lakh crore,” Garg said. “So, we are at a lower level.”