January 23, 2017

India takes steps to boost cash supply

India takes steps to boost cash supply

With no end in sight to the cash crunch faced by millions, the government has eased restrictions on the withdrawal of alternative currency and extended by 10 days deadline for use of the defunct Rs500 and Rs1,000 notes for paying utility and fuel bills. The Finance Ministry took a series of steps to increase cash supply in the system, including introducing a new Rs500 note in the recalibrated ATMs. Prime Minister Narendra Modi yesterday rejected the opposition’s demand to roll back the demonetisation, saying the country has welcomed the move. Also, a Task Force was set up to expedite process of recalibration of ATMs as well as draw up action plan and ensure implementation of this action plan for quick change-over to enable them to dispense new bank notes of Rs500 and Rs2,000. The measures followed ever increasing queues at banks. Yesterday being a bank holiday in northern and western India, long queues are expected today.About half of the ATMs have not yet started functioning and where they were operational ran out of cash in no time. Economic Affairs Secretary Shaktikant Das said the government has also raised cash withdrawal limit of at least three-month old current accounts to Rs 50,000 per week.

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