Cash shortfall in the system is of about Rs 70,000 crore, confirms SBI Research
Cashcrunch is of about Rs 70,000 crore, SBI Research SBI Research on Wednesday pegged the cash shortfall in the system at a whopping Rs 70,000 crore, even though the government and Reserve Bank have asserted that there is no currency shortage. A 9.8 per cent nominal GDP growth would have taken the currency available with the public to Rs 19.4 trillion by March 2018, as against the actual availability of Rs 17.5 trillion, it said, stressing that the gap of Rs 1.9 trillion is not the shortfall. "The apparent shortfall thus could be around Rs 70,000 crore or even less," it said. The note estimates that Rs 15,291 billion was withdrawn from ATMs through debit cards in the second half of Financial Year 2018. Reacting to reports of the currency shortage, it said the currency in circulation has breached the pre-note ban levels of Rs 17.84 trillion and added that such reports are "intriguing and defy logic". The report explains that a part of the reason why the shortage is being felt could be the introduction and faster-acceleration in printing Rs 200 notes."This may have altered the demand for smaller denomination notes in a larger way to possibly substitute for the currency of larger denominations," it said. "As ATMs have to be replenished more frequently, it can lead to the conjecture that cash is not available," the report added. The RBI had yesterday attributed the shortage to "logistical issues" in both replenishing ATMs with cash and also recalibrating those to accommodate the Rs 200 notes. -PTC News
