India’s ATMs Are Running Out of Cash. Again.
NEW DELHI — For the second time in 18 months, India has a shortage of cash. And like last time, economists say, it’s primarily the government’s fault.
Empty ATMs and bank restrictions on withdrawals have been reported in eight states this week, and some bank managers said the cash crunch has been building for months.
The government says the cash problem was caused by an unusual spurt in demand and will be eased within days. But if it persists, the shortage poses a political threat to Prime Minister Narendra Modi, whose administration has been hit in recent weeks from a series of stumbles. Most recently, he was criticized for his long silence over the horrific gang rape and murder of an 8-year-old Muslim girl that police say was committed by a group of Hindu men to terrorize the Muslim population.
On Monday, Sampath Kumar Lohati drove his scooter around Warangal, a city in the south Indian state of Telangana, for more than four hours trying to withdraw money.
“I tried at least 50 to 60 ATMs,” he said in a telephone interview. “But I could not find any cash.” Mr. Lohati, an insurance agent, finally got money on Tuesday after an ATM near his home was refilled.
India’s last cash crisis was caused in November 2016, when Mr. Modi decided to suddenly void most of India’s paper currency. The current shortage is also rooted in government policy decisions, as well as growing public mistrust of banks after several costly scandals.