INDIANS HOARD CASH AS BANKS RUN OUT

India is facing a cash crisis, with ATMs running dry and banks reporting a £7 billion shortfall in currency, threatening a return to the chaos of Narendra Modi’s “demonetisation” initiative.

Banks and cash machines are being closed as supplies of banknotes run out. In the hardest hit areas families are pawning valuables to survive. The State Bank of India said that ATM withdrawals hit their highest levels for almost a decade over the past year as Indians quietly rebuilt cash savings.

India now has more than £200 billion of cash in circulation, back at the levels before demonetisation. The government has increased printing but the sight of long queues outside banks has revived uncomfortable memories of 2016, when Mr Modi scrapped India’s two largest banknotes overnight in a crackdown on tax evasion and corrupt “black money”.

At a stroke 86 per cent of all currency in India was rendered worthless until it could be exchanged for new notes. The move plunged the country into months of turmoil and hit economic growth.

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Banks run out of money as Indians hoard cash (https://www.thetimes.co.uk/article/banks-run-out-of-money-as-indians-hoard-cash-again-rlvlz6fn5)

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