Cap on currency notes last nail in the coffin of JK’s ailing economy

Cap on currency notes last nail in the coffin of JK’s ailing economy

 

Special Correspondent

Srinagar, Dec 13: The news reports about Reserve Bank of India having reduced the cash flow to the banks operating in Jammu and Kashmir has evoked concern from the business community in the state.
A businessman while talking to Precious Kashmir said, “The J&K’s economy is in doldrums since 2014 when floods inundated the Valley. As the position was about to improve the 2016 unrest broke out in the Valley and then Government of India changed the currency. It was later followed by the imposition of GST in the state.”
He said that reports about RBI putting a cap over the flow of currency into Jammu and Kashmir are “disturbing” this will reduce the purchase power of the customers and would push the business fraternity to wall. “No economy can flourish if supply of currency notes is curtailed,” the businessman said.
He said Jammu and Kashmir government should take up this matter with central government forthwith and get this cap removed.
It’s in place to mention here that RBI has reduced high denomination notes to the banks in the borders states including J&K for over a month prompting them to load ATMs with low cash. “We are keeping low denominations in the ATMs, which is affecting proper cash withdrawals by the people. We have started receiving complaints from customers about low cash denominations in ATMs,” a bank official pleading anonymity said.
Another businessman said, “Government of India seems hell bent upon hitting the economy of Jammu and Kashmir. People sitting in New Delhi should realize that peace in Kashmir cannot be enforced by resorting to such tactics. Hitting the economy means making people poor and affecting the business community. The people who are ruling Jammu and Kashmir should realize that if Delhi keeps on choking the people of Kashmir it can have far reaching consequences.”
Bankers have claimed that against the demand of Rs 100 crores they are getting only Rs 30 crore. “If restrictions on cash supplies continue from the RBI, it will have larger ramifications on the economy of the State. ATMs across the state have started running dry and the business community is feeling the pinch,” said an expert.
A top official of the Finance department said that J&K government is not aware whether any such limit has been imposed or not. “I don’t think RBI has imposed any such restrictions. Still J&K government would take up the matter with central government and ascertain what is happening.”
Another official said that instructions have been passed to the banks in volatile areas not to keep too much of cash available in the branches due to increase in the incidents of bank robberies during the past few months.