The move to demonetise old high denomination currency notes of Rs 500 and Rs 1,000 has seen a lot of hiccups in its implementation. The government seems to have failed to properly cash in on this policy as citizens are reeling under the cash shortage. People have struggled to withdraw cash from their accounts both through the banks and the ATMs. Serpentine queues are seen outside these withdrawal points. The money depositing process is no less hectic.
Here are some steps that may mitigate the crisis:
Rs 100 notes in ATMs
The government could urge banks to ensure that the ATMs are kept sufficiently stocked with Rs 100 notes till the time enough notes of Rs 1,000 and Rs 500 find their way into the system. Refilling frequency of the ATMs has been very low and the public will benefit massively if money is put into the ATMs on regular shorter intervals. Most of the ATMs are seen closed and the banks must also ensure that they remain open.
Faster calibration of ATMs
Calibration of the ATMs should’ve been done much earlier. It needs to be faster now that the government has choses to move ahead with introducing Rs 2,000 notes first. Interestingly, these notes are also available in the already calibrated ATMs. So the process will take weeks and the only available currency in such ATMs is of Rs 100. It would’ve been wiser if they had introduced the newer Rs 500 notes into the system. In this way, the ATMs would’ve dispensed higher denomination currency without calibration. This would’ve ensured that the cash in the ATMs doesn’t run out as quickly as the Rs 100 notes are running out every day.
Mobile ATMs in rural areas
Mobile vans could be used to take the ATMs to places where ATM access is not easy and replenishing is difficult and not a daily affair. Apart from the urban troubles, the rural areas and the small towns are also hit badly with this cash crunch.
Govt should have thought of creating a buffer before implementing demonetisation
The Rs 100 notes have been in circulation for a long time and the first move ideally should have been to increase the circulation of Rs 100 notes to a certain level. That could have acted as a buffer for the demonetisation and introduction of new notes. Increasing the Rs 100 notes would also not undermine the secrecy aspect and could’ve been done before announcing the demonetisation.
Smooth online transactions
In recent days, mobile wallets and online transactions have seen a hike of at least 400 per cent across the country. This extra load often hangs up the servers and online transactions also fail often. Without cash, these modes of payments are the last resort for day-to-day purchases. The government should have cooperated with banks and payment gateways so that the increased load on servers due to extra server capacity for online transactions could be managed in these days. The government wants to build India into a cashless economy. For that aim, it is important to achieve that capacity to handle a sizeable amount of online financial traffic.