Kerala Polls- One Lakh Crore cash drawn from bordering Mangalore,Rbi alarmd

May 03 2016 : The Times of India (Chennai)

RBI alarm over cash demand in Karnataka dist on Kerala border

Mangaluru: TIMES NEWS NETWORK





Probe If Demand For Rs1 Lakh Cr Linked To Polls, Banks Told

The Reserve Bank of India has raised a red flag at the unprecedented demand for currency in Karnataka, to the tune of `1 lakh crore, in the January-March quarter. In a letter to the lead development officer, Mangaluru, RBI has sought details of transactions made by banks in Dakshina Kannada -since the district borders Kerala, where polls will be held on May 16.The RBI letter says: “We have observed a sudden increase in currency demand in the economy . More than `1 trillion increase in currency demand in the last quarter of 2015-16 is unprecedented ­ in terms of increase in any quarter. We would like to know whether this demand is due to state elections in the neighbouring state and whether the money is withdrawn from Karnataka for that. Please discuss the matter with the currency chest banks in your area and reply to us at the earliest.“ The letter was brought to the notice of the banks during the bank security meeting held by superintendent of police S D Sharanappa here on Monday .
While one of the currency chest bank representative said they had not seen any unprecedented or alarming high transactions, there was a demand from Bengaluru branches for `1,000 and `500 notes. “About `700 crore was sent in those denominations recently ,'' he added.
Raghav Yajamanya, lead bank manager, Syndicate Bank, said the red flag may have been raised since the money so withdrawn has not gone back into the banks.