Jewelers fear that cash crunch would affect the purchase of gold or jewelry by rural folks on Akshaya Tritiya today.
With several parts of the country facing shortage of cash, jewellers fear that this would affect purchase of gold or jewelry by rural folks on Akshaya Tritiya today. Sale in rural areas is likely to be most affected as this is where the cash crisis has hit hardest and people rely on mostly cash to make the purchase.
In urban areas, the cash crisis is less likely to affect gold purchase but may still cause some impact.
A section of jewellers in Ahmedabad said that customers in rural areas are concerned with the prevailing shortage of cash is likely to directly reflect upon the demand for gold and jewellry.
"Cash shortage can have a severe impact on demand of gold and jewellry from rural areas. This section of society is still not comfortable with digital transactions. They rely only on cash as it is tangible. The rumours that banks will not return the deposits of customers has also made people worried whether they will get their cash or not," said Chinubhai Shah, president of Shree Choksi Mahajan — Manekchauk.
Going by the age-old tradition, it is considered auspicious to buy any jewellry, particularly gold, on Akshaya Tritiya. Keeping the high demands of gold in mind, many jewellry brands have announced lucrative offers to attract maximum customers.
Cash woes continues
Cities and towns across Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan and Uttar Pradesh have been reporting cash shortages at ATMs and banks for some time now.
The government has attributed the shortage to unusual spurt in demand in the past three months.
An RBI report shows that the currency in circulation in the country has reached the pre-demonetisation level of about Rs 17 lakh crore.
Reports said that ongoing cash crunch in Gujarat worsened on Tuesday with several ATMs and banks running dry, especially in villages and the tribal belts, even though the Centre played down the issue terming it as only "temporary shortages".
Deputy chief minister Nitin Patel, who is also the state finance minister, acknowledged that banks are facing cash crunch and said the government is in touch with the RBI to ensure enough cash is supplied to banks.
Several ATMs in Ahmedabad and other cities remained dry on Tuesday, making it difficult for people to get cash for daily needs.
The situation is more acute in rural and tribal areas, bank officials and Opposition political leaders said.
A statement from the Finance Ministry confirmed reports of cash shortages and some ATMs running dry or becoming non-functional in some parts of the country.
Government officials attributed the cash crunch to crop procurement and hoarding of high denomination currency ahead of elections in Karnataka.
The Reserve Bank of India (RBI) has said that there is enough cash in its vaults and currency chests but it will still ramp up the printing of the notes in all the 4 note presses.
"The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and the recalibration of ATMs being still underway. RBI is closely monitoring both these aspects," it said.
RBI is also taking steps to move currency to areas which are witnessing unusually large cash withdrawals.
(With PTI inputs)
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