Cash crunch hits Mysuru

Mysuru:  Tomorrow is Ugadi and Mysuru is in a festive mood with people splurging on goodies and buying new clothes as it is the New Year as per the Hindu Calendar. But as if to dampen the festive spirit, most of the ATMs in city have run out of cash and even banks have reported cash shortage.

ATMs are either sporting ‘No Cash’ boards or ‘Out of Order’ display signs. However, there are no such boards in ATMs that accept cash deposits. Bank sources told Star of Mysore this morning that they were facing cash shortage since the last three months as the Reserve Bank of India (RBI) is not fulfilling their actual cash demands as per the indents submitted. The situation is aggravated now, they added.

“Normally, we fill cash in the ATMs that can last up to three to four days in an ATM. But as there is a cash shortage, we are unable to fill the ATMs to the maximum and whatever amount we fill, lasts only for two days. In places where there is a high density of people, ATM cash lasts just for a day,” a manager from a nationalised bank said, requesting anonymity.

But for a few ATMs of some nationalised banks, most ATMs are dispensing currencies in lower denominations like Rs. 200, Rs. 100 and Rs. 50. Not only nationalised banks but private banks too are facing cash shortage.

“All banks in Mysuru place cash indents daily to the RBI currency chests which distribute the cash based on the availability. But only a fraction of the indent banks are able to access from the currency chests, leading to the crunch. There is a gap between demand and supply. For example, if we place an indent for Rs. 40 lakh, we are given only Rs. 20 lakh. In such a case, it is difficult to manage cash,” another bank manager said.

Mysuru has 13 currency chests and the RBI directly supplies currency notes to them. But since the last two or three months, the RBI has not supplied sufficient currency. Rs. 15 crore is required for ATM kiosks in Mysuru and each ATM can store Rs. 40 lakh cash. Due to a shortage of money, only about Rs. 15 lakh to Rs. 20 lakh is being filled to each machine, bank officials said.

Lead Bank Chief Manager K.N. Shivalingaiah admitted to SOM that the district is facing a shortage of currency notes as the RBI is not supplying enough cash. “There is a cash shortage but it is not grim. We have informed the RBI authorities and they are not disclosing reasons for cash crunch as it is a confidential policy matter,” he said.

“People are being discouraged from withdrawing bulk cash and they are being advised to go for online transactions. Yes. We are facing the shortage since the last couple of months and we do not know when the situation will improve,” he said and added that most of the districts in Karnataka are facing cash crunch.

On reports floating in social media that due to elections in Karnataka, the government is deliberately holding cash so that it should not reach hoarders, Shivalingaiah said, “These are false reports and there is no connection between cash shortage and elections.”