Srinagar: The Reserve Bank of India (RBI) has restricted the cash flow to Jammu and Kashmir, sources privy to the development divulged, apprehending that it could be the worst ever fiscal disaster witnessed by the state in its modern history.
Official sources working in different banks operating in the state said that the RBI has halted the flow of higher currency notes including Rs 500 notes to Jammu and Kashmir for past one month, sending common masses and business fraternity into tizzy.
“The amount from the RBI has also been reduced up to almost 80 per cent for last one month. We are getting mere 20 per cent amount against the required sum. The flow of higher currency notes has been halted by the RBI while it sends currency notes of mere Rs 100, Rs 50, Rs 200,” official sources wishing anonymity said.
However, the state’s Finance Minister, Haseeb Darbu said that such reports are baseless and carry no weight.
“It is impossible. No such thing is happening that the RBI can halt the cash flow to the state. Paucity of the higher currency notes could be a country-wide issue but it can’t be specific to the Jammu and Kashmir state,” Drabu said.
When asked about the mounting complaints related to the dearth of cash in banks and in ATMs, the finance minister said he will take up the issue with the concerned officials.
However, top sources within the banks divulge details contrary to that of the incumbent finance minister.
They reveal that the banks have been informed ‘unofficially’ that the higher currency notes have been restricted in view of the surge in the militancy related activities in the state.
“We were not informed officially but unofficially we have been told that the currency notes have been restricted in the backdrop of the increased violence in the state at present,” sources said, adding that they have never witnessed the cash crunch of such a dreadful nature even when the militancy was at its peak in 90’s.
The officials claimed that they are facing a tough time while it is also being apprehended that the situation may further deteriorate as the stoppage of notes from the RBI has resulted in the frequent cashless ATMs at various places.
Divulging the details further about the ATMs present in Valley, the official sources said that over 2400 ATMs including that of Jammu and Kashmir Bank are currently available in the state.
“The people across the state were withdrawing Rs 90 crores in a day while the withdrawal limit from past one month has been reduced to mere Rs 70 crores due to the lack of notes,” sources claimed.
They added that the current crises have begun impacting the banks’ ability to load the ATM to the possible capacity in value of the cash.
“An ATM can have a cash of Rs 40 lakh but given the lower denominations, it can hardly reach Rs 7 lakh. With such kind of situation, banks have to load the teller machines almost ten times a day,” they said.
“The higher ups of the Banks have written to the RBI officials but instead of resolving the problem, the RBI officials are giving lame excuses, claiming that the higher denomination notes will be dispatched for the state soon,” sources informed.
The official sources further revealed that with stoppage of notes and sufficient amount, the Jammu and Kashmir Bank would be affected mostly as it has 70 per cent of share in the total business. (KNS)