Parts of Gujarat staring at cash crunch as RBI reduces supply

Parts of Gujarat staring at cash crunch as RBI reduces supply

In a reminder of cash crunch during demonetisation, banks in parts of Gujarat are learnt to be bracing for a cash shortage.

"We have come to know about some kind of cash scarcity in the state and have instructed chief secretary to be in touch with RBI officials on the issue," Nitin Patel, deputy chief minister of Gujarat, said on Friday.

According to sources, The banks had begun experiencing cash shortage for over a fortnight as they were receiving less amount of cash from the bank regulator, Reserve Bank of India (RBI).

The crunch is said to be from the level of currency chest, from where the cash is disbursed to various bank branches across the state.

The Gujarat region of RBI has about 257 currency chests.

Several banks, especially those located in rural areas, and cooperative banks are facing the problem.

In some of these banks, in the north Gujarat districts of Arvalli, Sabarkantha, Mehsana and Unjha, notices had been put up regarding the limit on cash withdrawal.

The body representing cooperative banks in the state- Gujarat Urban Cooperative Banks' Federation (GUCBF)- had even made written representations to the RBI, the Governor of Gujarat and the state chief minister, about the deteriorating situation of the cash availability.

"In some cases, banks are receiving only 10% of the weekly requirement of cash," a leading banker said on condition of anonymity.

"Though the situation is not that acute as yet in urban areas, the plight of rural areas in wake of farmers coming in to sell their harvest in the markets or seek loans, the issue can really become worrisome going forward."

The state government on its part said that it was primarily banking on RBI to help sort out the situation. "We have asked the RBI to ensure the currency flow," Nitin Patel said.

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