Bengaluru: Banks, especially the public sector banks in Karnataka are running short of cash because stacks of money, especially in the higher currency denomination of Rs 2,000 and Rs 500 were reportedly withdrawn from the banks and the ATMs over the last few months.
High cash withdrawal from depositors, most of who are contractors and builders, on the eve of elections should have set an alarm. The situation will ease off after the elections, said sources on condition of anonymity.
“There is hardly any money in circulation now. The RBI is unable to dispense the required currency, which has hit cash transactions in the banks in Bengaluru. ATMs with a cash dispensing capacity of Rs 40 lakh are either without cash or are running low on cash limited to Rs 4-5 lakh. Banks are turning down request for higher withdrawals against cheques because of acute cash shortage. The crisis started two months ago and has become severe in the last one month,” they added.
Many of the ATMs are running on ‘recycled’ cash, which is remitted in the cash kiosks of the bank, said a senior official of a leading public sector bank. Another bank officer said that in the last few months there has been an unnatural spurt in demand for cash by depositors, most of who are contractors and builders.
Cash flowing from TN, Andhra
Banks in neighbouring states are also reporting cash crunch. The money, which has been hoarded, is now being smuggled to Karnataka by ‘mules’, hired by political parties and their agents.
In one week alone, police and election officials have seized cash in crores from inter-state buses coming from Tamil Nadu, Telangana and Andhra Pradesh.
On April 19 the north east division police seized Rs 52 lakh in cash from one Karthikeyan, who was travelling to Bengaluru in a ‘KPN Travels’ bus from Hyderabad at Rani Circle in Devanahalli police station limits. The cash was wrapped in clothes and stuffed inside a huge bag.
On Thursday morning the police seized Rs 10.72 lakh in cash from one Zameer Ahmed, who was coming to the City from Hyderabad in a ‘SRS Travels’ bus at the same place. The cash was found hidden inside a polythene cover and it was stuffed inside another bag.
In North division the police seized Rs 4 lakh in cash. Last week in the south east division the police had seized Rs 70 lakh in cash from a business man. In all the instances the cash seized was undocumented and in Rs 2,000 and Rs 500 currency denomination.
“The money has been handed over to the Income Tax Department for further investigation. The police have registered non cognizable (NC) cases against the accused and informed the Returning Officer in the area,” said the officer.
Note from Kannada.Club :
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