Allahabad: A man stand next to an out-of-service Automated Teller Machine (ATM) in Allahabad on Wednesday. PTI Photo
(PTI4_18_2018_000120B) New Delhi: Even as Andhra and Telangana claimed they had voiced their concerns about the cash crunch as early as February, the government is determined to establish that the crunch was caused by a “sudden and unusual” increase in “some areas.”
It has even zeroed in on these areas where it says there were high-volume cash withdrawals worth crores — first in Telangana, then in northern Karnataka, and later in Andhra Pradesh. In other words, the recent surge in demand for cash was not caused by excessive withdrawals made by ordinary citizens from ATMs. The shortage started with large payments via cheques and other instruments by some in the aforesaid regions, a senior official told India Today. Now, the IT department is trying to determine why the large withdrawals were made. Among those making the withdrawals were a large number of rice millers, contractors and agro-traders in the three southern states, the magazine’s portal adds.
In one case, a single business made almost 20 high-volume payments in the span of a few hours. Now, all these are under IT scanner and a scrutiny has revealed that the payments they made didn’t tally with their past spending, and had little economic rationale. In many cases, payments were made to entities which did not previously have business links to the issuing company, or the recipient had no business to justify the receipt. In March-April, there was a 13-day period when withdrawals worth Rs 45,000 crore took place (Normally, it is just Rs 20,000 crore), sources in the Ministry of Finance were cited by the magazine as saying.