India is once again ramping up its printing of new banknotes, as the country attempts to try to tackle its latest cash crunch.
Less than 18 months after Prime Minister Narendra Modi announced a ban on high-denomination banknotes, India's government was forced into damage limitation mode on Tuesday after reports emerged that some ATMs in the country were running dry.
Finance Minister Arun Jaitley tweeted Tuesday that India's renewed cash shortage was brought about by a "sudden and unusual increase" of withdrawals in some areas of the country.
He also sought to reassure those affected by the "temporary shortage" by saying they would not have to worry for long because the issue was being "tackled quickly."
The Reserve Bank of India (RBI) also said late Tuesday that regional shortages of cash were likely "largely due to logistical issues of replenishing ATMs frequently."
Financial inclusion
Reports of empty ATMs in small cities and rural areas of India conjured memories of Modi's contentious decision to ban high-denomination banknotes in 2016. The move to ban 500 and 1,000 rupee notes was designed to address widespread tax evasion and help digitize the country's economy. Nonetheless, with around 86 percent of the country's currency removed from circulation in one stroke, it left millions scrambling for cash for several weeks.
India is estimated to be home to nearly 200,000 cash machines, according to official data from the country's central bank. And with a population nearing 1.3 billion, it is thought to have one ATM per 6,500 people.
Meanwhile, according to data published by the World Bank in 2015, around 21 percent of the world's unbanked adults are believed to be based in India.
However, a number of attempts have been made in recent times to try to encourage Indian citizens to open a bank account. In 2014, Modi launched his grand plan for financial inclusion that extended banking facilities to the huge population residing in rural India. The program also outlined setting up of nearly 20,000 ATMs across the country for easier access to finances.
— CNBC's Spriha Srivastava contributed to this report.