note demonetisation

Money is trickling into the banks of Bihar – but is not being distributed evenly

Nationalised banks in big cities seemed to have tided over the crunch, but banks in rural areas say cash is hard to come by.

A month after Prime Minister Narendra Modi announced the scrapping of Rs 500 and Rs 1,000 notes on November 8, cash availability is starkly uneven across Bihar.

In relatively affluent parts of the capital city of Patna, the long queues outside ATMs seen in the first week of notebandi, when the government invalidated 86% of the currency in circulation, creating a massive cash crunch, are history. In poorer parts of the city, however, one can still see 50-odd people lined up outside ATMs at most times. Travel outside the capital and this pattern repeats itself.

In bigger towns, residents and bank managers said the cash flow has improved. In North Bihar’s Darbhanga, Ramakant Mishra, manager of a Punjab National Bank branch in Qila Ghat, brings out cheques encashed by his customers on November 30, the day this reporter visited his branch. Most cheques ranged between Rs 10,000 to Rs 24,000.

The story in Gaya district is similar. Residents of Gaya city, a tourist hub, said cash availability was not a problem. At Wazirganj, about 20 kilometres Northeast of Gaya, business is humming along at a Punjab National Bank branch. Its manager, who did not want to be identified, said daily cash deposits in the branch have returned to their usual level of Rs 30 lakh.

In the days after demonetisation, they had climbed to Rs 70 lakh-Rs 80 lakh. Our clients, he said, are able to withdraw Rs 24,000 a week, the limit set by the Reserve Bank of India for banks. Earlier, this bank, like several others in the country, did not have enough cash to dispense that amount to every customer who needed it.

However, venture deeper into the Gaya district and you will find that cash is just as hard to come by as it was in the days immediately after the demonetisation was announced.

The case of gramin banks

Deep inside Wazirganj stands a branch of the Madhya Bihar Gramin Bank. Its manager, NK Mishra, said they were only able to give people Rs 2,000-Rs 4,000 per week. About 10 days ago, this reporter had seen a similar situation at the Thawe Mandir branch of North Bihar Gramin Bank in Gopalganj district – about 330 kilometres north of Gaya, which was letting customers withdraw no more than Rs 2,000 a week.

So why does Punjab National Bank have cash while regional rural financial institutions such as gramin banks do not? There seem to be two reasons for this.

In Gaya, the Punjab National Bank maintains the local currency chest – cash reserves held by banks in larger towns, on behalf of the Reserve Bank of India. Right now, with cash in circulation running low, banks seem to be focusing on bigger population centres. Ramakant Mishra, the Punjab National Bank branch manager at Darbhanga in North Bihar, agreed. “Things will return to normal in the bigger centres in 5-10 days,” he said. “It will be a bigger problem in rural areas. There are fewer branches there. And it takes longer to top them up with cash.”

The second reason for uneven distribution of currency notes is that under India’s banking regulations, each rural bank is attached to a nationalised bank which, among other things, supplies cash to them. Punjab National Bank, for instance, is the “sponsor bank” for Madhya Bihar Gramin Bank. Similarly, Central Bank of India is the sponsor bank for Uttar Bihar Gramin Bank.

Over the last month, given the cash crunch, nationalised banks have not been releasing enough money to Gramin Banks, bank officials said. Take the example of the Wazirganj branch. Its daily need, its manager Mishra said, is between Rs 4 lakh-Rs 5 lakh. “What we are getting is Rs 2 lakh.” A lot of these notes, he added, were badly damaged.

The branch manager at Thawe, which gets money from the Central Bank of India, had a similar complaint. “We need about Rs 30 lakh-Rs 40 lakh a month,” he said. “What we have received so far is Rs 6 lakh, Rs 3 lakh and Rs 9 lakh – so Rs 18 lakh.”

In November end, when this reporter visited the Thawe Mandir branch, salaries for local teachers and anganwadi workers had been credited to their accounts. But, said the manager, “There is no preparation from our feeder bank for payday. We have not received any additional cash.”

This also explains why people in big towns said things were improving while those in the hinterland did not. On the day this reporter visited Wazirganj, Mishra was updating accounts before passing withdrawal slips to his cashier. It was a tricky job and some of his customers were agitated. Others were interceding on behalf of other customers who had to pay farm workers or had a wedding coming up. And Mishra was patiently apologising for his inability to pay more. “Agar koi customer naya note daalega to kaam kar dengey warna shama karey.” – If any customer deposits new notes, I will take care of your needs. Otherwise, you will have to forgive me.

Most of his 13,000 customers, he said, are poorer than those who have accounts in nationalised banks – such as old age pensioners and farmers. Said Mishra, “Rs 2,000 dene mein sharam aa rahi hain.” It is embarrassing to give them no more than Rs 2,000.

Mishra said he could not help but feel that “gramin banks ke saath sautela vyavhaar kiya jaa raha hain” – gramin banks are getting a step-motherly treatment.

What about banking correspondents?

In the hinterlands of Bihar, banking correspondents, who are authorised to collect small deposits and extend credit on behalf of the banks, are facing a cash crunch as well. Beyond Wazirganj is Pipra, a village where State Bank of India has set up a Customer Service Point. There, villagers are sitting outside a small shop with a cash counter inside. Inside, Satyendra Kumar, the local banking correspondent, is collecting thumb impressions, handing people money, and updating their bank accounts. With 5,000 customers, he said, his centre usually disburses Rs 5 lakh every day. “What we are getting is Rs 50,000.”

As a result, there is a perennial crowd outside his centre. Every day, he gets about 300-400 customers looking to make withdrawals. Given that he is unable to pay more than a few hundred rupees to each, they end up coming back in a few days.

As he made his payments on Monday, Kumar said about Rs 14,50,000 had just been released by the state government to his centre for pensions to widows. Bihar, he said, had not made these monthly payments of Rs 400 for the last seven months. What he had now received was the cumulative amount due – Rs 2,800 per beneficiary. But there is no cash to make those payments.

In December, he said, the state government will also release cash to buy new cycles and uniforms for schoolchildren . “The government pays Rs 600 to each student for uniforms,” he said. “Where will we get the cash to make that payment?”

This is a familiar narrative on Bihar, one whose ripples spread far and wide. As this reporter saw in Bettiah, banks’ inability to pay more than Rs 1,000 in a week caused cauliflower prices to crash to Rs 1 per kilo in the local mandi. One wonders what invisible disruptions are being caused right now.

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

What’s the difference between ‘a’ washing machine and a ‘great’ washing machine?

The right machine can save water, power consumption, time, energy and your clothes from damage.

In 2010, Hans Rosling, a Swedish statistician, convinced a room full of people that the washing machine was the greatest invention of the industrial revolution. In the TED talk delivered by him, he illuminates how the washing machine freed women from doing hours of labour intensive laundry, giving them the time to read books and eventually join the labour force. Rosling’s argument rings true even today as it is difficult to deny the significance of the washing machine in our everyday lives.

For many households, buying a washing machine is a sizable investment. Oddly, buyers underestimate the importance of the decision-making process while buying one and don’t research the purchase as much as they would for a television or refrigerator. Most buyers limit their buying criteria to type, size and price of the washing machine.

Visible technological advancements can be seen all around us, making it fair to expect a lot more from household appliances, especially washing machines. Here are a few features to expect and look out for before investing in a washing machine:

Cover your basics

Do you wash your towels every day? How frequently do you do your laundry? Are you okay with a bit of manual intervention during the wash cycle? These questions will help filter the basic type of washing machine you need. The semi-automatics require manual intervention to move clothes from the washing tub to the drying tub and are priced lower than a fully-automatic. A fully-automatic comes in two types: front load and top load. Front loading machines use less water by rotating the inner drum and using gravity to move the clothes through water.

Size matters

The size or the capacity of the machine is directly proportional to the consumption of electricity. The right machine capacity depends on the daily requirement of the household. For instance, for couples or individuals, a 6kg capacity would be adequate whereas a family of four might need an 8 kg or bigger capacity for their laundry needs. This is an important factor to consider since the wrong decision can consume an unnecessary amount of electricity.

Machine intelligence that helps save time

In situations when time works against you and your laundry, features of a well-designed washing machine can come to rescue. There are programmes for urgent laundry needs that provide clean laundry in a super quick 15 to 30 minutes’ cycle; a time delay feature that can assist you to start the laundry at a desired time etc. Many of these features dispel the notion that longer wash cycles mean cleaner clothes. In fact, some washing machines come with pre-activated wash cycles that offer shortest wash cycles across all programmes without compromising on cleanliness.

The green quotient

Despite the conveniences washing machines offer, many of them also consume a substantial amount of electricity and water. By paying close attention to performance features, it’s possible to find washing machines that use less water and energy. For example, there are machines which can adjust the levels of water used based on the size of the load. The reduced water usage, in turn, helps reduce the usage of electricity. Further, machines that promise a silent, no-vibration wash don’t just reduce noise – they are also more efficient as they are designed to work with less friction, thus reducing the energy consumed.

Customisable washing modes

Crushed dresses, out-of-shape shirts and shrunken sweaters are stuff of laundry nightmares. Most of us would rather take out the time to hand wash our expensive items of clothing rather than trusting the washing machine. To get the dirt out of clothes, washing machines use speed to first agitate the clothes and spin the water out of them, a process that takes a toll on the fabric. Fortunately, advanced machines come equipped with washing modes that control speed and water temperature depending on the fabric. While jeans and towels can endure a high-speed tumble and spin action, delicate fabrics like silk need a gentler wash at low speeds. Some machines also have a monsoon mode. This is an India specific mode that gives clothes a hot rinse and spin to reduce drying time during monsoons. A super clean mode will use hot water to clean the clothes deeply.

Washing machines have come a long way, from a wooden drum powered by motor to high-tech machines that come equipped with automatic washing modes. Bosch washing machines include all the above-mentioned features and provide damage free laundry in an energy efficient way. With 32 different washing modes, Bosch washing machines can create custom wash cycles for different types of laundry, be it lightly soiled linens, or stained woollens. The ActiveWater feature in Bosch washing machines senses the laundry load and optimises the usage of water and electricity. Its EcoSilentDrive motor draws energy from a permanent magnet, thereby saving energy and giving a silent wash. The fear of expensive clothes being wringed to shapelessness in a washing machine is a common one. The video below explains how Bosch’s unique VarioDrumTM technology achieves damage free laundry.

Play

To start your search for the perfect washing machine, see here.

This article was produced by the Scroll marketing team on behalf of Bosch and not by the Scroll editorial team.