 "Long queues outside banks a 'serious issue', says SC")
On the first pay day since demonetisation was announced, banks across India not only braced for huge queues across branches but soon enough ran out of cash too.
As many bank accounts were credited with salaries, more chaos was witnessed outside banks on Thursday as a large number of salaried people also queued up to withdraw money. Many were annoyed by the rush and the arbitrary withdrawal limits set by banks.
As many bank accounts were credited with salaries, more chaos was witnessed outside banks on Thursday as a large number of salaried people also queued up to withdraw money. Many were annoyed by the rush and the arbitrary withdrawal limits set by banks.
Limited supply of currency notes from the Reserve Bank of India (RBI) remains a challenge for managing cash dispensation. Banks do not receive adequate supply of notes and run out of cash at branches and automated teller machines (ATMs). Even ATM cash management companies say there is acute shortage of cash.
A report in The Times of India cited a bank official as saying that his branch received 15-20 percent of the required amount. Due to this, bankers were rationing withdrawals so that more customers could be catered to.
“RBI is currently supplying cash based on a variety of calculations including how much a bank branch got the previous day. That will continue. We will continue to ration cash,” one banker has been quoted as saying in a report in The Economic Times.
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1. A visit to different bank branches in both New Delhi and adjoining Noida saw hassled people standing in bigger queues to withdraw their salaries. They also expressed resentment over arbitrary limits and rules for withdrawals set by bank officials at their own whims and fancies.Queues begin to form outside banks just after 7 a.m. and even earlier, as against the opening time of 10 a.m.
2. According to a report in Economic Times, banks ran out of cash within hours of opening as multiple reports suggested the government was trying to increase the supply of Rs 500 notes.
3. Small banks are also upset with the availability of cash as they claim that the larger banks are getting preferential treatment in cash allocation.
4. Meanwhile, senior SBI executives remain optimistic that the demand for cash will taper, and said customers have already withdrawn more cash than normal to avoid problems in the first week of December when they have to make payments in cash for monthly bills. Also, there has been a shift in transactions to electronic channels since the note ban on November 8 especially in large cities, albeit on a small scale, they added.
As a result, SBI officials expect lower withdrawals in their channels over the next 10 days at Rs 10,000 crore compared with average withdrawals of Rs 15,000 crore in the first seven days of every month in the past 10 months before demonetisation.
5.Around 300-400 people queued up outside the State Bank of India and IndusInd banks in Krishna Nagar area of East Delhi. The winding queue outside Axis Bank in Saket spilled onto the main road. Even the normally deserted Oriental Bank of Commerce in Saket saw a long queue of customers.
Many people rued having to wait for hours to access banking.
"I waited outside the bank from 9.30 a.m. to 4.30 in the evening. I did not leave the queue even once so as not to miss my turn. I kept ordering tea from a nearby vendor to beat hunger," griped gardener Chedi Ram, 44.
An MNC employee, Yogesh Yadav, said he had come to withdraw Rs 24,000 from his bank account but was given only Rs 10,000. "It's the end of the month and I am supposed to pay bills. How will I manage?" Yadav asked.
A resident of Krishna Nagar in Delhi, Rahul Chauhan got his salary credited on Tuesday but could not withdraw it even after standing in a queue at 3 a.m. on Wednesday.
"By the time my chance to enter the bank came, it ran out of cash."
6. Meanwhile, to check the misuse of Jan Dhan accounts by black money hoarders, RBI restricted the withdrawal from such accounts to ~10,000 per month as long as they were KYC (Know Your Customer) compliant. Customers who are not KYC compliant can withdraw only ~5,000 a month.
7. In another step to manage the pressure on currency chests after November 8, RBI revised rules for chest balance and currency holding limits.
RBI said the banned notes deposited in currency chests since November 10 will be considered as part of the chest balance in the soiled note category but such deposits will not be reckoned for calculating chest balance limit/cash holding limit. This will help banks in shoring up their cash reserve ratio requirements.
8. On making recalibrated ATMs available for cash transactions, the task force constituted under RBI Deputy Governor S S Mundra has managed to recalibrate close to 85% of the ATMs. At the end of August, as per RBI data, the number of ATMs was at 2,02,801, according ATMs manufacturers. However, despite this, most ATMs still continue to run dry or the queues outside the functioning ATMs still run long.
9. According to the All India Bank Employees' Association (AIBEA), the next seven-10 days are going to be more tense because huge number of employees, workers and retirees/pensioners would throng the branches to draw their salary. If RBI fails to provide adequate cash, it may lead to serious law and order issues, it said in a letter written to the central bank.
With inputs from Agencies
With inputs from Agencies
