KVP blames Centre’s policies for cash crunch

VIJAYAWADA: Congress leader and Rajya Sabha member KVP Ramachandra Rao has found fault with Union Finance Ministry for lack of action in spite of increasing cash crunch in the State with dry ATMs becoming order of the day.

In a letter to Finance Minister Arun Jaitley on Sunday, the Congress leader minced no words in stating that the efforts of the Central government to push for cashless transactions were yielding counter productive results.

Describing the cash crunch in the State as a “nightmare” for the people living in semi-urban and rural areas, KVP said the problem was only deepening day by day.  “ATMs in busy business districts are mostly dry in Andhra Pradesh and Telangana.

The situation is no different in Maharashtra, Madhya Pradesh and many other states,” he pointed out. He wondered whether the government has directed the banks to keep ATMs dry in order to give a push to cashless transactions and said if true, then it is a very short sighted approach.

“You know Indian rural economy and semi-urban economy is cash-based. Any single-minded pursuit of cashless transactions will push this sector deep into the hands of money sharks,” Ramachandra Rao wrote.
The Congress leader said he is baffled by the closure of the ATMS set up far away from the premises of bank branches as private banks are emulating the same. He said as per statistics, there are just around 15 ATMs per one lakh population in the country of billion plus and the fact is that compared to urban areas, the ATMs are much less in the rural and semi-urban areas.

He said people in villages do not need big money and their requirements are always small. In fact, most of the Indian farmers are small and marginal players, he pointed out.

Rao said people had welcomed the move of the Centre to promote zero balance accounts.  He said it was hoped that it would reduce rural people’s dependence on local money lenders to a great extend. “First the note ban and then dry ATMs have defeated the purpose of the scheme. It increased the indebtedness of people in urban slums and rural areas,” he observed.

He said PSU banks as well as private banks levying service charges on cash and online transactions, restricting the number of withdrawals and imposing fines on non-maintenance of minimum balances in saving accounts have only worsened the situation. “I do not know how will these restrictions on poor and middle class people for using the banking services improve cashless transactions,” he said and added that such restrictions are only making people lose faith in the banking system.

Stating that the situation is a direct blow to the NDA government’s ‘financial inclusion’ campaign, he advised the Finance Minister to ask National Sample Survey Organisation (NSSO) of India to give a reality check.