Reserve Bank of India (RBI) has lifted all withdrawal limits from Bank Accounts from 13th of this month. That should mean the cash crunch is over but then ATMs still have those No Cash Boards and Banks are still imposing unofficial limits on withdrawals.
The reason behind this is over hoarding of cash by the people. Banks are clearly saying that people are no longer interested in depositing money fearing Income Tax Scanner. Only withdrawing means that the banks do not have cash to meet the demand.
Major Bank Branches in Hyderabad which used to see deposits of 40 Lakhs per day are now getting only Two to Three Lakhs which indicate the intensity of the problem. Bank officials are worried that if this situation does not change, it will doom the entire banking system.
