Demonetisation: Queues at banks thin, but some branches still face cash crunch

Cash shortage at some branches is mostly because of focus of the government tilting towards rural areas, people familiar with the matter said


Branches of various banks in Mumbai, Delhi are getting much less cash than their requirements, which is why all the customers are not being serviced, says a senior bank official. Photo: Hemant Mishra/Mint
Branches of various banks in Mumbai, Delhi are getting much less cash than their requirements, which is why all the customers are not being serviced, says a senior bank official. Photo: Hemant Mishra/Mint

New Delhi: Bank branches across the country on Friday witnessed very short queues, with the government banning over the counter exchange of the cancelled currency. However, some branches in urban centres faced cash crunch.

The shortage at some branches is mostly because of focus of the government tilting towards rural areas, sources said, adding funds are being made available in rural and semi-urban pockets so that farmers get adequate cash for sowing rabi crop.

There are reports that banks in major metros are getting one-sixth of the cash requirement, leading to chaos at the branches.

According to a senior bank official, branches of various banks in Mumbai and Delhi are getting much less cash than their requirements, which is why all the customers are not being serviced.

Also Read: Unaccounted deposits to face 50% tax, 4 year lock-in period

With regard to ATMs, about 60% of cash vending machines have been recalibrated to dispense high denomination notes. As a result, some of the ATM machines are up and running round the clock.

Besides, the government’s decision to stop exchange facility has led to a considerable decline in queues at the branches. These measures are expected to help banks focus on their normal business, an official said. The government on Thursday stopped over-the-counter exchange of the defunct Rs500 and Rs1,000 notes.

Meanwhile, the government extended till 15 December the facility of using old Rs500 notes at public utilities and included more services like mobile recharge.

From Friday, payment of fees up to Rs2,000 per student has been allowed in schools and colleges run by central and states governments, municipalities and local bodies.

Payment towards pre-paid mobile top-up to a limit of Rs500 per recharge has been allowed while purchase from consumer cooperative stores will be limited to Rs5,000 at a time.

There has been large-scale criticism of the government in the wake of severe hardships faced by a cross-section of people following demonetisation of the high-denomination currency.

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