CASH CRUNCH AT ATMs - INDIA #2

As per my previous post, I have mentioned that some big contractors in Karnataka and Andhra Pradesh are hoarding the Rs. 2000 notes, the tax authorities are swing into action and start raiding.

The tax authorities have conducted 30-35 raids in Banglore and some parts of Andhra Pradesh on the cash hoarders. Though the amount seized are not so much but the operations are expected to intensify in coming days. The reason for these are the cash crunch in ATMs and it is speculated that Rs. 2000 notes have been hoarded by the big contractors. These big contractors issue cheques to the small contractors or sub-contractors and they withdraw the amount for the projects.In some cases it has been revealed that no work has been done by the small contractors. The main focus of the raids are individuals and entities those have withdrawals of large amount in last few weeks and these transactions are not justified and do not tally with the income or spending in patterns. According to the government it is suspected that the cash is hoarded for the upcoming election of Karnataka or even for the Andhra and Telangana next year. These Rs. 2000 notes are being hoarded as black money that is leading to cash crunch in ATMs in several states of the country.

Apart from this the banks have started to pump currencies in the ATMs, the public sector banks have been instructed to increase the currency at ATMs. The ATM operation companies has started to focus on refilling of small denomination of Rs. 200 and Rs. 500 notes to the ATMs, but all the ATMs are not equipped with small notes dispensers.

Source : TOI
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