Cash crunch: Over 85% ATMs functioning, deposits increase in banks

More than 85 per cent automated teller machines (ATMs) started dispensing cash across the country on Friday and deposits in banks increased, leading to an improved cash flow situation, a senior finance ministry official said.

“Over 85 per cent ATMs were functional on Friday. Cash deposit back to the system also improved. So, no net reduction in cash position of currency chests,” the finance ministry official said.

The share of functional ATMs will hover over 85 per cent for sometime now, another finance ministry official said. The situation has improved from Monday when about 60 per cent ATMs across India were dispensing cash, which went up to around 82 per cent on Thursday.

Low deposit of currency in banks and the high rate of cash withdrawal had worried the government that was seen as one of the reasons that led to a cash crunch in ATMs in states, particularly, Bihar, Telangana, Andhra Pradesh, Madhya Pradesh and Gujarat, among others. In Bihar, around 75 per cent ATMs of State Bank of India (SBI) were working on Friday morning, against 61 per cent operational ATMs in the state on Thursday, the official said. Over 30 per cent of the ATMs belong to SBI in Bihar — the highest among all other banks.

The RBI had supplied an additional Rs 10 billion to its regional office in Bihar on Thursday for distribution within the state and in Jharkhand in a bid to ease the situation.

The state-level bankers’ committee of Telangana, which held a meeting on Thursday attended by all banks and RBI officials, demanded more cash supply in the state though cash withdrawal has shown a decline there. Currency shortage still persists in the system, a banker told Press Trust of India on condition of anonymity. “With allowance of free-of-charge withdrawals from our PoS (Point of Sale) terminals across India, the bank has given an additional option to customers to withdraw cash. We hope the short supply of currency at ATMs will be normalised soon,” an SBI official said.

An official of a private sector bank said cash shortage was present in the system, but the bank had requested the RBI for more supplies. Punjab National Bank said cash supply to its ATMs had reached normalcy.