Patience wears thin as cash runs dry on Day 3
But RBI says enough cash available; ~500, 1,000 notes valid for key utility payments till Nov 14
Crowds continued to swell at bank branches with people trying their luck on the second day after banks reopened following the move to discontinue ~500 and ~1,000 notes. On Friday, there were long queues outside bank branches and automated teller machines (ATMs). Several ATMs of private and public sector banks were still not functional.
The lack of cash resulted in customers scurrying from one ATM to the other. Some banks like Dhanlaxmi Bank had clearly marked a big X at ATMs that had no cash, while others had ‘out of service’ boards on the machines.
Customers were also upset about people using multiple cards to withdraw more than the permissible ~2,000.
Customers said banks had clearly underestimated the pressure on branches when ATMs were shut. Some incidents of damaged notes being dispensed by bank staff and ATMs were reported.
With increasing complaints coming in from banks and people still clamouring to change the old ~500 and ~1,000 notes, the government on Friday extended their use for paying household utility bills, fuel, taxes and fees as well as purchases
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Existing ~500 and ~1,000 notes ceased being legal tender from midnight of November 8, and new notes in denominations of ~500 and ~2,000 were released.
State Bank of India (SBI) said banks had received deposits of ~40,000 crore since the government banned the circulation of high-value banknotes. Arundhati Bhattacharya, chairperson of SBI, said though the cash was drying up, they were taking care of it. The country’s largest bank had exchanged nearly ~1,700 crore till 6 pm on Friday.
She added that there was no need to panic since there were 50 more days for people to deposit old currency notes.
A senior finance ministry official told Business Standard that initial problems had been anticipated. “It was known that there would be initial issues. That is why the Prime Minister and finance minister appealed to the public for their cooperation,” the official said.
The Reserve Bank of India in a statement said, “There is enough cash available with banks and all arrangements have been made to reach currency notes all over the country. Bank branches have already started exchanging notes.”
Bhattacharya said SBI had provided for separate queues at branches for senior citizens and women as well as for those who were coming in to exchange the notes.
Privilege customers and high net-worth individuals were being given better and faster services at some banks. Banks were also ensuring that no fake notes were being passed on and were taking a cautious approach to handling the cash being deposited.
A spokesperson for Axis Bank said, “We have additional counters at our branches and have also made special arrangements for senior citizens. Customers can continue to transact through their cards and digital channels.”
Bank officials said that only ~100 notes would be filled into ATM machines since the new ~500 and ~2,000 rupee notes had a size incompatible with the cash trays and the machines would have to be reconfigured before these new notes could be dispensed.
The finance ministry official said, “There are more than 200,000 ATMs in the country. Their software has to be reconfigured not just centrally but also individually.”