Mumbai : Cash withdrawals from ATMs actually declined in the January-March quarter of last financial year on the sequential basis, implying the current shortage could be “superficial”, a report from State Bank of India said on Thursday.

“Coming to withdrawals, the Q-o-Q (quarter to quarter) ATM cash withdrawal trend indicates that there has been a continuous increase in withdrawal in first, second and third quarter of 2017-18 (though increased in second half).

“Interestingly, in Q4 (fourth quarter) of FY2018, there was a sequential decline, that has been also the case in some of the earlier years. Thus the decline in ATM withdrawal in Q4 could actually be a seasonal phenomenon apart from the usual reasons floating around like currency shortage. This strongly supports our contention that the current shortage could be superficial rather than real,” the report said.

However, the sudden surge in currency in circulation (CIC) was “perplexing”.

The quarterly growth in Q4 FY18 shows that from the average growth of 4.4 per cent of 5 years from FY12- FY16, the growth has shot up to 8 per cent.

“This is despite the fact that economy had achieved remonetisation and digital modes have also gained traction in a big way. On a monthly basis, incremental pace in currency in circulation is three times higher in first quarter 2018, compared with first quarter of the five previous years (FY12-16). Hence there is indeed some unusual trends in 2018,” the report said.

During April in previous years too, the currency in circulation had seen spikes, and the expansion in April 2018 till date was as usual.

The average increase was 0.43 lakh crore for FY12-16. This year by mid-April this number has risen to 0.44 lakh crore.

“However, the catch is this can go up even further if the hoarded 2000 notes are not back into circulation as RBI will have to print more notes to fix this artificial shortage,” the report added.

—IANS