Banks restrict withdrawls due to `2,000 note crunch

There has been a drastic reduction in the number of `2,000 denomination notes being deposited at banks, and this is causing a shortage of cash. On an average, each bank branch used to receive `2,000 notes amounting to `10 lakh per day. Now, they receive only about `4 lakh worth notes.

Withdrawals are exceeding deposits, because of which banks have started imposing restrictions on withdrawals. The cash crunch is especially severe in semi-urban and rural areas.

M.S. Kumar, the secretary of the Bank Employees’ Federation of AP and Telangana, says, “This trend of customers not depositing `2,000 notes has become a major cause of concern for all banks. They are forced to disburse notes of lower denominations to customers. These low denomination currency notes get exhausted within no time, and then banks are not in a position to serve customers seeking withdrawals. This is leading to arguments between the bank staff and customers.”

A state-level bankers’ committee headed by SBI has brought it to the notice of the state government and the RBI that the `2,000 denomination notes supplied by the RBI are not making their way to the banks.

Finance Minister Etela Rajender has requested the RBI to arrange for `2,000 denomination notes amounting to `5,000 crore by April to address the cash shortage as the state government needs to distribute money to farmers under the investment support scheme for the Kharif season from April 18 onwards.