Five months after the government and the RBI announced the withdrawal of Rs 500 and Rs 1,000 notes, and sucking out of 86 per cent of the notes in circulation, Automated teller machines or (ATMs) in several regions across the country have gone dry with customers complaining of non-availability of cash. However, bankers claimed that the position was comfortable across the country and normalcy will be restored in some regions which were facing cash shortage.
Several customers who went to ATMs in the last ten days faced dry ATMs — in Kerala, Mumbai, Hyderabad and Cuttack. “I visited the ATMs of at least seven banks in the Matunga area on Monday but there was no money anywhere. Today I went to Wadala but all the ATMs were closed. In some places, ATMs are dispensing Rs 2,000 notes. There is an acute shortage of Rs 500 and Rs 100 notes,” said KA Viswanathan, an educationist.
Customers also claimed the situation to be bad in Kerala and Tamil Nadu. “Most of the ATMs in Kerala have run out of cash. It’s back to the November-December days of demonetisation,” said Unni Nair, an NRI from Kerala.
People involved in cash management and bankers admitted there was a cash shortage which coincided with the beginning of the new fiscal. “There is definitely a shortage of cash. The situation has improved from what it was in the first five days of the new fiscal but things are still not normal,” said Navroze Dastur, MD, India & South Asia, NCR Corporation, an ATM deployer.
Banking sources said Telengana and Andhra were witnessing acute currency shortage while other regions reported an average of 80 per cent ATM availability. “The situation is comfortable across the country. Our ATMs are showing an average availability of 80 per cent which has been the normal after demonetisation. There was more demand for cash as it was the beginning of the new fiscal. There were some issues in Andhra and Telengana but that will be sorted out soon. The availability in different regions is different. In North-east, the availability is 80 per cent. That’s the case in most states including Maharashtra,” said Rajnish Kumar, MD, SBI.
Kumar said the ATM availability, in those regions such as Andhra and Telengana where ATM availability is low, will be restored soon.
A section of banker said small banks were not getting adequate cash. “ATM availability before demonetisation was 85-88 per cent which has come down to 80 per cent after demonetisation. This would have come down in the last one week in several regions. If we get cash, we fill up the ATMs. It’s not that we are deliberately keeping ATMs closed,” said a bank official who preferred anonymity.
However, a source involved in cash logistics said that a number of banks do not have adequate cash as a result they are not loading the ATMs and saving it for their branch customers.
The RBI has not provided details on remonetisation in the last two months. Currency with the public too has declined. According to RBI data, while total money in the system— including currency with public and bank deposits — has gone up to Rs 125.09 lakh crore as on March 17, 2017 from Rs 116.17 lakh crore on March 31, 2016, the currency with the public has fallen to Rs 12.13 lakh crore on March 17, 2017, from Rs 15.97 lakh crore last year.
The RBI did not respond to the email and telephone calls of The Indian Express.
The decision to demonetise high value currency notes of denomination of Rs1,000 and Rs 500 was announced on November 8, 2016 and the exercise was over on December 30. These notes valued at Rs 15.4 lakh crore, constituted 86.9 per cent of the value of total currency in circulation. The RBI withdrew all the restrictions on withdrawal of cash on March 14 this year.
“With progressive remonetisation, the surplus liquidity in the banking system declined from a peak of Rs 795,600 crore on January 4, 2017, to an average of Rs 6,01,400 crore in February and further down to Rs 4,80,600 crore in March. Currency in circulation expanded steadily during this period,” the RBI said in its bi-monthly monetary policy review last week.