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Business News/ Politics / Policy/  Rush to exchange old Rs500, Rs1,000 notes sees long queues, confusion at banks
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Rush to exchange old Rs500, Rs1,000 notes sees long queues, confusion at banks

Anumber of bank branches have not received the new series of currency notes to replace the old Rs500 and Rs1000 notes

The norms state that customers will have a Rs20,000 weekly limit for cash withdrawals from their bank accounts using cheques and other instruments. Photo: Hemant Mishra/MintPremium
The norms state that customers will have a Rs20,000 weekly limit for cash withdrawals from their bank accounts using cheques and other instruments. Photo: Hemant Mishra/Mint

Mumbai/New Delhi/Bengaluru: People were seen queuing up outside banks and Reserve Bank of India (RBI) counters across the country since early morning on Thursday, to exchange or deposit their Rs500, Rs1,000 notes.

Bank branches were shut on Wednesday after the surprise announcement by Prime Minister Narendra Modi that Rs500 and Rs1,000 denomination notes would cease to be legal tender from Tuesday midnight as part of the battle against black money. Banks were shut to stock lower denomination notes and new notes of Rs500 and Rs2,000 denominations with enhanced security features.

While banks have equipped their branches with additional counters for increased footfall and plan to keep the branches open for a longer duration than usual, the process is not free of any teething issues. While the footfall is unprecedented, a number of bank branches have not received the new series of currency notes, making it difficult for them to start the process of exchanging notes.

There seems to be some confusion emanating from RBI guidelines on withdrawal of cash as well. The norms state that customers will have a Rs20,000 weekly limit for cash withdrawals from their bank accounts using cheques and other instruments. However, branch managers aren’t clear whether the week in the weekly limit starts on Monday (14 November) or Thursday (10 November).

Also read: Cash deposits above Rs2.5 lakh to face tax, penalty on income mismatch

According to Sudhir Vajpayee, the manager at the Dadar branch of Bank of Maharashtra, in Mumbai, the new denominations are yet to arrive and the branch is managing with Rs100 and Rs50 notes that it accumulated the previous day.

Around 200-300 people were waiting outside HDFC Bank branch in Old Rajinder Nagar, Delhi, at around 10am. The number was at least 10 times more than the usual daily footfall in the branch. The customers reportedly queued up since 7am at this west Delhi’s bank branch.

Kumar Gaurav, an employee of a travel company located in Karol Bagh, Delhi, reached the bank office around 10am. “I have come here to withdraw money from my salary account but there is a lot of rush here. The bank officials have put up a ‘closed’ sign because the crowd is uncontrollable. In spite of the officials being cooperative, nothing can be done," he said.

In central Delhi, similar scene was observed outside the ICICI Bank in Barakhamba Road, Connaught Place. Bank officials were distributing deposit slips to the crowd to speed up the process and tackle the crowd. “I have been given the deposit form and told to fill it up and submit a photocopy of my identity proof along with the original, in order to deposit money in the bank. There are already 130 people waiting before me, so I have to wait for another few hours," said Himanshu Singh, a 24-year-old IT professional standing in the queue outside the bank.

Also read: Plea in Supreme Court against demonetization of Rs1,000, Rs500 notes

In Mumbai, many banks are turning away people who do not have an account with them even though exchange of notes is allowed at any bank branch even if the customer doesn’t have an account with the bank.

“I am going to another bank to exchange money, this is my second attempt after SVC (Co-operative) Bank where i was told to come after 2 hours since I don’t have a bank account with them," said Sachin Jadhav, 35, an Axis Bank account holder in Mumbai.

A State Bank of India (SBI) branch in Andheri West is allowing one person at a time to enter the branch. The branch hasn’t received the new Rs500 and Rs2,000 currency notes yet.

An Axis Bank branch in Dadar West nearby has had impatient customers waiting for longer than expected as the bank’s servers are down and cash deposit transactions aren’t going through.

The United Bank of India (UBI) in Chittaranjan Park, New Delhi, was also flooded with people since 7am. There was utter chaos near the opening gates. People were busy signing the exchange forms, while there was a separate queue for the elderly.

“There will be some inconvenience in the beginning but I will adjust to it, from now on I will be paying my household help in cheque and also manage other transactions accordingly. In case of unavailability of money at a particular point of time during a transaction, it can be deferred to a later date. This can be done at least for the people we are familiar with," said Manju Rai, an elderly resident outside the UBI branch.

“It’s a good move by Modi government. I don’t think it will create that much of an impact to us in our day to day activities but will be very effective for those having black money," said a customer standing outside Allahabad Bank, Chittaranjan Park branch, who did not wish to be named.

Sadiq , who runs a shop in Bengaluru, wasn’t happy with the inconvenience caused by the move. “I have been waiting for half an hour," said Sadiq, who was one among the many people who had queued up outside Vijaya Bank’s Indiranagar branch.

Tasir Begum, who was waiting in queue at the Viveknagar post office in Bengaluru, appeared distraught. “We can’t eat notes after all, “ Begum said, adding that everything from the milkman’s bill to the school fees of her children were unnecessarily on hold.

“Waiting early in the morning on a working day is difficult," said R.Kamatchi, who arrived at the Indian Bank in T.Nagar, Chennai, at 7.30am to exchange Rs500 notes.

Meanwhile, banks are working overtime to handle this sudden rush.

An ICICI Bank branch in Dadar West, Mumbai, has had to call its regional head office to send more people as the staff there was unable to manage the crowd, according to employees working there.

RBI’s regional director in Chennai J. Sadakkadulla, while talking to the reporters on Thursday morning, said that special counters have been opened in the RBI Chennai office. The counters, which will function till 2.30pm, will have extended working hours till 4pm.

“We are gearing up to ensure as many transactions as possible from today onwards," said a manager of SBI branch on the outskirts of Hyderabad, on condition of anonymity. He said the new denominations of Rs.500 and Rs.1,000 notes has arrived on Wednesday and the branch infrastructure, including IT, closed circuit cameras, electricity backups and security, has been beefed up to deal with the situation.

Leave requests, barring emergency ones, were put on hold; people on leave have been asked to report back and they are enlisting any bank personnel available to assist in dispensing cash, he added.

S. Prakash, vice-president of Axis Bank’s MG Road branch in Bengaluru, said the bank is also using the chance to encourage people to open accounts.

“We have a lot of customers who have told us that they do not have accounts and we are offering them tablet banking options," Prakash said, adding that the bank has not yet received new Rs500 notes. It, however, has enough Rs2,000 notes and is using its Rs100 notes to fill up its ATMs.

Additional reporting by Preeti Zachariah, Sharan Poovanna and Nidheesh M.K. in Bengaluru, Viswanath Pilla in Hyderabad and Dharani Thangavelu in Chennai

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Published: 10 Nov 2016, 12:17 PM IST
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