'ATM withdrawals dipped in fourth quarter of FY18'

To beat cash crunch, the SBI said it was allowing consumers to withdraw cash from PoS machines installed by the lender.

The ‘no cash’ boards have become a common sight at the ATM kiosks since past few days. (File | EPS)

MUMBAI: A day after pegging a cash shortage of Rs 70,000 crore in the system, SBI Research uncannily said the shortage could be superficial. Why? Because cash withdrawals at ATMs actually declined in the fourth quarter of FY18 over the previous quarters.Sequential ATM cash withdrawal trends indicate that there has been a continuous increase in withdrawal during the first three quarters of FY18. Interestingly, in Q4 of FY18, there was a sequential decline. In fact, some of this decline is visible in the previous years.

“Thus, the decline in ATM withdrawals in Q4 could actually be a seasonal phenomenon apart from the usual reasons floating around like currency shortage. This strongly supports our contention that the current shortage could be superficial rather than real,” said Dr Sowmya Kanti Ghosh, Chief Economist, SBI Research.

He also found the sudden surge in currency in circulation perplexing. As against the average growth of 4.4 per cent in past five years, growth shot up to eight per cent in Q4 of FY18, notwithstanding remonetisation and digitisation. “The incremental pace of currency in circulation is three times higher in Q1, 2018 as against Q1 of the five previous years. However, it spikes and expansion in April 2018 till date is as usual,” Ghosh said.

The average increase was 0.43 lakh crore for FY12-16. This year, by mid-April, this number rose to 0.44 lakh crore. However, the catch is this can go up even further if the hoarded `2,000 notes are not back into circulation as RBI will have to print more notes to fix the artificial shortage,” he noted.

TACKLING CASH CRUNCH ISSUE
■ To beat cash crunch, the SBI said it was allowing consumers to withdraw cash from PoS machines installed by the lender
■ As per the RBI guidelines, a customer can withdraw Rs1,000 in Tier I and II cities, whereas Rs 2,000 can be withdrawn in Tier III-VI cities per day per card
■ The bank has also waived off the charges on such withdrawals
■ SBI has a total of 6.08 lakh PoS machines, of which 4.78 lakh machines are enabled to dispense cash to customers of SBI and banks who have enabled this facility for their clients