bank, banks, atm, cash, note ban, demonetisation, modi govt, no cash, rbi, bank deposits
A man inserts his card to withdraw money from a mobile bank ATM machine in New Delhi on November 15, 2016.CHANDAN KHANNA/AFP/Getty Images

A majority of automated teller machines (ATMs) in Andhra Pradesh and Telangana are still running without cash due to non-supply of notes from the nodal branches of banks.

Negligence of ATM distribution agencies in filling the machines with cash from time-to-time is also one of the major reason for this cash crunch.

Here's what has caused a cash crunch in ATMs and banks in the two states:

  • The 'bail-in' clause in the Financial Resolution and Deposit Insurance (FRDI) Bill – has triggered widespread fear among the people of Andhra Pradesh and Telangana that they will lose their heard-earned cash if a bank goes bankrupt
  • In these two southern states, in particular, people are withdrawing money from ATMs and banks, fearing the banks could collapse
  • People are withdrawing cash even if they don't require it and money is not coming back into the banking system - H. Purnima, the regional manager of State Bank of India in Visakhapatnam, told Indian Express
  • Although the government has repeatedly issued clarifications on the controversial bail-in clause under the FRDI Bill, people are panicking
  • The government has clarified that the bail-in clause will not be used for public sector banks and bankers have urged members of the public against accelerated withdrawals from their savings bank accounts and deposits
  • Around 70% of ATMs in places such as Tarnaka, Moula Ali, Kushaiguda, Sainikpuri, Neredmet, ECIL, AS Rao Nagar, Nagarjuna Nagar, Kamala Nagar, Dammaiguda are running dry