Former Maharashtra Chief Minister Ashok Chavan Warns of Critical Currency Shortage Amid High Demand for Cash

Cash Crisis Hits Rural Maharashtra

A critical currency shortage has gripped the Nanded district in Maharashtra, with the situation taking a toll on local businesses and citizens. In a letter to the Regional Director of the Reserve Bank of India (RBI) Nagpur division, dated April 26, BJP's Rajya Sabha member and former Maharashtra chief minister Ashok Chavan has warned of the dire consequences of the cash crunch.

The shortage has been exacerbated by the peak wedding season and pre-sowing preparations by farmers, resulting in a high demand for cash in the local market. According to data from the State Bank of India's Shivajinagar branch, which serves as the primary currency chest for Nanded district, the situation is deeply concerning. The chest branch limit is Rs 450 crore, but only Rs 70 crore cash is available at present, creating a significant gap between demand and supply.

As a result, banks in the area are forced to impose restrictions on high-value withdrawals, impacting common citizens, farmers, and traders. While banks are advising customers to use digital transactions due to the lack of physical cash, the availability of cash remains essential for the rural economy. If the situation persists, it will have a severe adverse impact on wedding celebrations and agricultural activities, Chavan warned.

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The cash shortage is not limited to Nanded district. A shortage of Rs 500 currency notes is being witnessed in banks and ATMs across the Marathwada region of Maharashtra, including Chhatrapati Sambhajinagar. Bank officials claim that due to low cash supply from the RBI, local banks are issuing currency of lower denominations.

According to bank officials, the supply of cash from the RBI is not meeting the needs, with the cash supply being only 20 to 30 percent of the amount required in Chhatrapati Sambhajinagar. The problem is not just limited to Chhatrapati Sambhajinagar but also exists in other districts of the Marathwada region. It may take 15 more days for the situation to normalise, officials said.