First Pay Day After Demonetisation: Banks Gear Up for Currency Withdrawals this Week

ATMs are Dry and Government Restricts Cheque Transactions. Banks are Expecting Long Queues this Entire Week.

It’s 21 days since the Centre announced demonetisation and India continues to experience currency crisis. December 1 is the first pay day since PM Modi decided to scrap out old currency from the market and ATMs are still dry. This week, the authorities are expecting big rush at bank branches. To brace up for the coming situation, government has implemented specific measures to normalize this situation.

Seeing Heavy Rush at Bank Branches, Government Tweaks Post Demonetisation Policies

  • The Centre and State governments are likely to credit pensions and salaries to government employee accounts. Seeing that there are about 58 lakh pensioners and 50 lakh regular employees employed under Centre alone, it’ll be a Herculean challenge for the authorities.

  • Banks brace for new arrangements like security deployment to combat demonetisation effects. Some branches have set up additional counters to accommodate large number of people. The others have made SOS calls to the RBI to send in extra currency this week.

    Banks will setup extra counters to accommodate salary withdrawals.
    Banks will setup extra counters to accommodate salary withdrawals.
  • Government had announced to provide Rs. 10,000 to ever non-gazetted staff in advance. However, this may provide only slight relief since most of them have debts to clear with milkmen, newspaper hawkers and vegetable vendors.
  • Last week, the authorities have recalibrated about 70% ATMs to house new Rs. 2000 bill. But this is unlikely to make any effect on bank queues since ATMs are running out of money quite swiftly.
  • New restrictions imposed on cheques state a person cannot withdraw more than Rs. 3000 from his account via cheques. This is a smart strategy for controlling hording of new Rs. 2000 bills in every household.
  • The cities may experience tight budget since the Centre is expected to bestow money upon village ATMs and banks. It’s necessary to empower farmers for the upcoming Rabi crop season.
RBI will have to print new currency to combat this problem.
RBI will have to print new currency to combat this problem.

Seeing the plight of employed professionals and students, RBI governor Urjit Patel has tried to ease the brunt of demonetisation on the common bank. “Central bank is monitoring the situation on a daily basis and taking necessary action to ease the pain of citizens“, he says.

Manju Agarwal, Deputy MD, SBI sheds light on State Bank’s monetary preparations “At SBI we have enough currency supply. At some pockets there was shortage, but there also funds are being made available“.

But the government needs to come up with a solid strategy to settle this problem as soon as possible.