RBI ‘cuts’ cash flow to JK, likely to affect businesses

Srinagar: Reserve Bank of India (RBI) has begun to restrict the flow of fresh currency notes to banks operating in Jammu and Kashmir which in now taking a toll on trade and businesses, highly placed banking executives said on Tuesday.
Automated Teller Machines ( ATM) transactions have started getting affected as RBI has reduced the flow of high denomination currency notes to “border states such as J&K”, the executive said while requesting anonymity. He said cash flow from RBI to the state is down by 70 percent.
“The state has a cash requirement of Rs 700 crore but at the moment we are receiving only Rs 200 crore. The problem has been prevalent since last one month and is proving to be severe for ATM transactions as people are able to withdraw only low denomination notes,” the executive said.
According to sources, the restriction on cash flow and high denomination currency notes has come in the wake of a “Government of India directive on reduction of high denomination notes to “border states”. Finance Minister, Haseeb Darbu when contacted over phone said t”such reports are baseless and carry no weight. “It is impossible. No such thing is happening that the RBI can halt the cash flow to the state. Paucity of the higher currency notes could be a country-wide issue but it can’t be specific to the Jammu and Kashmir state,”