{"id":"f-80ae245e0c-0191d9d4-78bf-5490-9238-1dc64390ff75","title":"Are Bengaluru Banks Facing A Cash Shortage? Lenders Seek Help From Peers Ahead Of Elections","description":"Civic elections in five Bengaluru city corporations are expected before June 30, the deadline set by the Supreme Court, marking the city's first municipal polls in 11 years.","timestamp":1772011010,"category":"national_v_two","headline":"Are Bengaluru Banks Facing A Cash Shortage? Lenders Seek Help From Peers Ahead Of Elections","modifiedHeadline":"Bengaluru Banks Face Cash Crunch Ahead Of Polls","subCategories":["scid_2c0dc4ac"],"region":"IN","bundleMetaData":{"bundleId":"7b48871c-c993-4956-b43d-6f46f8e1b036","bundleTitle":"Today In India","cardData":null},"iabCategoryId":"82","fcSummary":"bengaluru banks are experiencing a cash shortage, with withdrawals exceeding deposits, particularly impacting construction and real estate. rs 500 notes are scarce, prompting banks to prioritize atm replenishment and seek support from the rbi. speculation links the issue to upcoming elections and slowed cash recycling, though digital payment promotion is encouraged.","summary":"Bengaluru banks face cash shortage ahead of elections, prompting lenders to seek help & prioritize ATM replenishment. RBI monitoring the situation.","ctaUrl":"https://trends.glance.com/newz/news/IN/en/news18/f-80ae245e0c-0191d9d4-78bf-5490-9238-1dc64390ff75","sourceUrl":"https://www.news18.com/business/banking-finance/are-bengaluru-banks-facing-a-cash-shortage-lenders-seek-help-from-peers-ahead-of-elections-ws-l-9928222.html","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/pEp_r5GthXN0.webp","content":"

Banks across Bengaluru are facing an unusual cash shortage, prompting currency chest managers to seek additional banknotes from peer institutions as demand continues to outstrip supply, The Economic Times

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reported, citing senior executives from both public-sector and private banks.

According to the report, most currency chests have managed to fulfil only part of the cash requirements raised by branches in recent weeks. Internal advisories circulated by a large state-run bank reportedly indicate mounting stress due to tightening currency availability.

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Bankers told ET that withdrawals from current and overdraft accounts are exceeding remittances, largely driven by businesses and contractors in sectors such as construction, real estate development and civic projects, where wage payments are frequently made in cash. While such withdrawals are permitted, tax deducted at source applies once prescribed thresholds are crossed.

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Typically, large cash withdrawals re-enter the banking system within days, but bankers said this recycling cycle appears to have slowed recently. Some officials cited by ET suggested that upcoming elections could be a factor, as political parties and candidates may already be mobilising funds for campaign-related spending.

Executives told the publication that Rs 500 notes, the backbone of routine transactions, have become especially scarce. Banks are prioritising ATM replenishment to avoid inconvenience to retail customers, even as branch-level availability remains tight. Several banks have escalated the issue internally and approached the Reserve Bank of India for support, ET reported. The RBI did not respond to the publication’s email seeking comment.

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According to the report, M S Mahabaleshwara, former CEO of Karnataka Bank, said a sustained increase in withdrawals can act as an early warning signal. He added that the RBI closely monitors currency conditions and has adequate policy tools to correct imbalances if needed. Another senior banker said simply injecting fresh currency may not resolve shortages if cash is being systematically withdrawn and held outside the banking system.

Banks have also issued internal guidance encouraging branches to promote digital payments. One advisory from a large state-run lender, cited by ET, attributed part of the strain to the broader policy push toward digital transactions and urged customers to cooperate during what it described as a temporary disruption.

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Speculation about election-related demand is also growing. “It is no secret that money plays a significant role in elections,” PN Sreenivasachary, former Karnataka election commissioner, adding that parties often begin mobilising funds months before polls because moving cash becomes harder once election schedules are announced, according to the report.

Civic elections in five Bengaluru city corporations are expected before June 30, the deadline set by the Supreme Court, marking the city’s first municipal polls in 11 years. Assembly elections are also due in the coming months in Assam, Kerala, Puducherry, Tamil Nadu and West Bengal.

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Are Bengaluru Banks Facing A Cash Shortage? Lenders Seek Help From Peers Ahead Of Elections

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