BHOPAL: It is now almost six months since PM Modi overnight placed lakhs of crores worth of currency notes out of circulation. But the after-effects of demonetisation continue to linger on and cash is still in short-supply. The situation is somewhat comfortable in the urban areas but the countryside is facing an acute dearth of cash. In Madhya Pradesh, the problem has assumed momentous proportions due to the ongoing process of purchase of wheat on MSP.
Traders are handing over cheques to farmers as payments for the farm produce bought by them. But the banks are refusing to handover cash to the farmers. The government is transferring payments for wheat being purchased on MSP in the bank accounts of farmers. However, farmers are unable to withdraw the money. The government has been flooded with complaints of problems in cash withdrawal from across the state.
The RBI, after a meeting of bankers with the CM, has decided to divert 70 per cent of the cash flow to rural areas and 30 per cent to urban centres. However, that may create a cash-crunch in cities and towns.
Ajay Vyas, Field General Manager of Central Bank of India – the lead bank of Madhya Pradesh – says the inflow of cash into banks is far lower than the outflow and that was the key reason behind the crisis. “People are withdrawing money but not putting it back in banks and the currency chests of banks are depleting at a fast rate”, he said. He said RBI was supplying more cash now than in the corresponding period of the last year but the cash crunch continued and the situation was unlikely to ease in the coming months.
Sources said in the last quarter, as against total withdrawals of Rs 62,000 crore, total deposits were Rs 55,000 crore, making for a deficit of Rs 10,000 crore. Sources in the banking industry said following the lifting of cap on withdrawals from March 13, the outflow of cash had increased considerably.
Sources claimed the finance ministry was keeping an eye on the situation and if things did not improve, RBI might issue some new directives.
