News

Need cash? If you're in Hyderabad, that might be a problem

April 14, 2017

On March 13, the Reserve Bank of India lifted the cap on ATM withdrawals it had imposed in November, when demonetization of India's most popular banknotes set off a cash crisis.

But the removal of withdrawal limits has not necessarily signaled the end of the nation's cash crunch, according to a report by India Today.

A new survey of 10,000 citizens in 11 cities across India indicates that banknotes are still in short supply at the country's ATMs. Really short supply.

In a poll by LocalCircles, a citizen engagement platform, 83 percent of respondents in the city of Hyderabad said they could not find a working ATM during the survey period (April 5­–8).

In Pune, 69 percent could not find an ATM stocked with cash. Cardholders in Delhi were best off, comparatively speaking — only 11 percent of survey participants in that city could not find a cash-stocked ATM.

April is the first month since the introduction of demonetization measures that the ATM cash situation has become worse rather than better. Not surprisingly, Indians are blaming the lifting of cash withdrawal limits for the renewed cash crunch.

The report also cited the imposition of ATM transaction charges as a culprit. Though the fees are not high, people are hanging onto larger amounts of cash in order to avoid them, starving banks of vault cash for their ATMs, India Today said.

RBI expects to complete remonetization by the end of May, but it remains to be seen whether it will end the cash crisis in India.