New Delhi: The cash crunch issue does not seem to end with a shortage of cash being reported from many parts of the country. Former finance minister P Chidambaram on Wednesday criticized the government and the Reserve Bank of India and said that the ghost of demonetization is again back to haunt them.

He took this opportunity to needle the government over the recent bank scams by saying that the people of the country have lost confidence in banks.

“I suspect ordinary people are withdrawing cash but not putting back into the banks their surplus cash. It is possible that there is some loss of confidence in the banking system, thanks to the bank scams.”

“After demonetizing 500 and 1,000 rupee notes, the government printed Rs. 2,000 notes! Now, the government is complaining that Rs. 2,000 notes are being hoarded!! We always knew that Rs. 2,000 notes were printed only to help hoarders.”

“The ghost of demonetization has come back to haunt the government/RBI. Why are ATMs still bring re-calibrated even 17 months after demonetization?” Mr Chidambaram said in a series of posted tweets on the reported shortage of money in banks in several states.

“Cash is back with a vengeance,” says Navrose Dastur, MD, NCR Corp, India. “I support digitization, but the government cannot force the pace of digitization or arbitrarily reduce the supply of cash.

“Is it correct that currency in circulation has increased by only 2.75 per cent since demonetization? If so, I maintain that government/RBI are not allowing the money supply to grow at the same rate as the nominal GDP.”

“I also suspect that RBI seriously miscalculated demand for cash in the post-harvest season,” he said.

“RBI’s statement is unsatisfactory. If RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage.”

The RBI on Tuesday said that there is “sufficient availability of cash” in all its vaults and currency chests and it is “taking steps to move currency to areas” which have seen unusually large cash withdrawals.

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