Govt working to meet currency crisis in select areas: Jaitley

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The government is doing a reality check with the different banks and has also checked with the Reserve Bank of India.

According to the manager of nationalised bank in the city who wished to remain anaonymous, confirmed to CityToday that there was a cash crisis following short supply of money from the currency chests.

S C Garg, Secretary, Department of Economic Affairs while briefing the media said, "We print about 500 crores of Rs 500 notes per day".

In response to the Finance Minister, KT Rama Rao, a minister in the Telangana cabinet, said that this was an issue being faced by customers for the last three months. In the current month, in the first 13 days itself, the currency supply increased by Rs.45000 crores.

However, this time, reports say that the cash crunch was a knee-jerk reaction to the latest Financial Resolution and Deposit Insurance (FRDI) Bill, being tabled in parliament. "Since morning I have visited at least four ATMs in different areas but unfortunately there is no cash even at one".

"We were forced to stand in queues as he snatched Rs 500-1,000 notes from our pockets and put them in Nirav Modi's pocket". "Union Finance Ministry and RBI should make coordinated efforts to check the problem of cash shortage and take steps for availability of the funds in the banks and ATMs", he said. Government or RBI can not arbitrarily control the supply of cash. There are also reports of ATMs in states like Delhi, Uttar Pradesh, Telangana, Gujarat, Chhattisgarh and Bihar running out of cash.

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But despite the assurances, reports of shortage of cash poured from all parts of the country. Though the government rubbished this claim, people unwilling to take a chance withdrew whatever they could.

Bank officials said they are getting only one-tenth of the required cash leaving them helpless to replenish the ATMs. "RBI is closely monitoring both these aspects", the apex bank said in a statement.

Further, as a matter of abundant precaution, RBI said it is also taking steps to move currency to areas that are witnessing unusually large cash withdrawals. The total worth of Rs 2,000 notes in the system is Rs 7 lakh crore in the system. Some states have less currency and others have more.

"Where are these notes of Rs. 2,000 denomination going? The SBI chief said this was restricted to certain states where the demand has gone up, a possible reason was that the agricultural procurement season has started".

The government has made a decision to increase the production of currency notes by five times, reported the Indian Express. As a rule, cash supply must grow at the same rate as the economy is growing and the government was obliged to provide as much cash as people need at any given time, Chidambaram said in a series of tweets.

The government also dismissed concerns over a lack of adequate supply of the high-value 2000 rupee note while acknowledging early signs of hoarding.