Cash crunch: Govt to increase printing of Rs 500 notes by five times

Amid concerns over cash crunch in ATMs across the country, the government has decided to increase printing of Rs 500 notes by five times.

"We print about 500 cr of Rs 500 notes per day. We have taken steps to raise this production 5 times. In next couple of days, we'll have supply of about 2500 cr of Rs 500 notes per day. In a month, supply would be about 70000-75000 crore", SC Garg, Secy, Dept of Economic Affairs was quoted as saying by ANI.

A statement by the finance ministry confirmed reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country.

"There has been unusual spurt in currency demand in the country in last three months," it said.

While currency supply increased by Rs 45,000 crore in the first 13 days of April, "unusual spurt in demand" was seen more in some parts of Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, it said.

Minister of State for Finance Shiv Pratap Shukla said the government has formed a committee to address the problem of currency shortage in certain states and the issue would be resolved in next 2-3 days.

"The Government of India with the Reserve Bank of India have taken all steps to meet this unusual demand. We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far," the finance ministry statement said.

Soon after reports of cash-crunch across the country, Jaitley tweeted, "Have reviewed the currency situation in the country. Over all there is more than the adequate currency in circulation and also available with the Banks. The temporary shortage caused by 'sudden and unusual increase' in some areas is being tackled quickly."

West Bengal Chief Minister Mamata Banerjee tweeted, "Seeing reports of ATMs running out of cash in several States. Big notes missing. Reminder of #DeMonetisation days. Is there a Financial Emergency going on in the country? #CashCrunch #CashlessATMs," she said in a tweet. Meanwhile, SBI Chairman, Rajnish Kumar Sinha said that the cash-shortage is due to geographical factors.