India's cash woes just won't quit
ATM cash outages are again an issue in India, nearly 18 months after Prime Minister Narendra Modi's government sent the banking industry into turmoil by wiping out 86 percent of India's cash supply overnight with the demonitization of 500 and 1,000 rupee banknotes.
For the past two weeks, reports of cashless ATMs across parts of the country have been mounting, creating a growing sense of frustration among the country's largely cash-dependent population, according to a CNBC report.
On Tuesday, the government convened a special committee to address the problem and its causes, and Finance Minister Arun Jaitley took to Twitter to ensure Indians that the "temporary shortage" was being "tackled quickly."
A government statement claimed that the problem resulted from a "sudden and unusual increase in cash withdrawals in some areas, but did not specify a cause for the increase.
The Indian Express has reported that this increase is directly related to rumors that the government is considering a reduction in deposit insurance for bank accounts. In response, citizens have begun to hoard cash, cutting off the flow of currency back to banks and making it impossible for ATM operators to keep their machines filled, the report said.
Another rumor circulating is that the government is intentionally limiting cash supply in order to force an unwilling population to switch to digital payments, the Express said.