The Reserve Bank of India has assured the Centre that banks have been prepared to ensure an ample supply of cash at their branches and ATMs, anticipating a rush to withdraw money after citizens receive their November salaries. “Banks have made arrangements to deal with the payday rush,” a senior official of the Finance Ministry told The Hindu on Wednesday. “The increased supply of Rs 500 notes should facilitate greater transactions and improve the volume of currency in circulation.”
A larger number of the currency notes will be “routed through the banking system every day from December 1”, the official added. The country has been facing a cash crunch since Prime Minister Narendra Modi announced on November 8 that Rs 500 and Rs 1,000 notes will no longer be legal tender, despite repeated assurances from the government that there was enough cash in circulation.
On payday on Wednesday, however, citizens found themselves waiting in long queues at banks and ATMs, only to be told there was no cash. According to bankers, the amount of money at ATMs had reduced to one fifth of the required levels. “The situation will not change much from our side even if it is salary day because there is not enough cash in bank branches or ATMs,” a private sector bank official told The Economic Times. “The situation will only improve once Rs 500 notes come into circulation, and it will take days before that happens.”
Another banker claimed that the RBI was “rationing” cash to banks based on the volume they received the previous day. “In normal times, during the salary season, we used to get Rs 8,000 to Rs 10,000 crore to be distributed across ATMs in the country on a daily basis. Now, we are getting around Rs 2,000 crore which is awfully inadequate,” an official said.
Moreover, banking unions have sought police protection at all branches during payday rush. “We seek the intervention of the Indian Banks’ Association to advise banks to ask for police protection in branches to provide proper security to the staff,” unions told the association in a letter, according to The Indian Express.