Demonetisation: Situation will be under control within a week, says State Bank of Patiala general manager

While the banking sector is still coping with the situation arising owing to demonetisation of 500 and 1,000 notes, State Bank of Patiala general manager Devendra Kumar talks to Swati Mahajan on how to handle the present condition and when will the scrapped notes be replaced.

Written by Swati Mahajan | Updated: November 21, 2016 11:50 am
demonetisation, 500 and 1000 currency notes banned, old currency notes, State Bank of Patiala, corruption, black money, PM Modi, Narendra Modi, modi, business news, banking and finance, latest news, indian express Devendra Kumar, the general manager of State Bank of Patiala, at his office in Chandigarh. Sahil Walia

What is the State Bank of Patiala doing to handle the present situation?

All the bank employees have got together in this situation of crisis. The number of hours they are awake in a day, they are spending in the bank. All the directions given by the central government, Reserve Bank of India and our head office are being followed. The basic problem we are facing is managing the crowd, which is not our domain. We are telling our employees that this is the crunch time. People are frantically roaming from one place to another, so the bank employees need to keep calm.

WATCH VIDEO: How Demonetisation Impacts Rural Population

The common man is irritated and frustrated. How the bank employees are coping with that?

The public at large is frustrated. On November 18, one of our officers were beaten by a customer. He got stitches on his head. The 20-year-old boy came to deposit Rs 1 lakh cash. There was some problem and the money was deposited with an error. So, he had to again come and my staff corrected the mistake within 10 minutes. While one of our bank executives was correcting the mistake, the boy started abusing him. The matter worsened and the bank official got up from the seat and the customer started beating him subsequently. He was injured and was rushed to the hospital. He got five stitches on the head.

How much time will it take for the cash to flow?

The problem of cash flow was in the initial days. Now we are not facing any problem. Earlier, we used to keep cash. At present, we are providing it to the branches where cash is required. So far, we are not facing any problem. I was surprised that on the initial days – November 9, 10 and 11 – some banks were not working despite the directions from the government to remain open. As far as crowd management is concerned, the situation has eased out. The crowd has decreased than what it was on the first and second day. Only 25 per cent of the people are coming to banks now. In another week or 10 days, the situation is expected to ease it. By the next Monday, the situation will improve.

What about the farmers?

The farmers are not facing any problem. The weekly withdrawal has been increased to Rs 25,000, which a farmer can take in one go or in instalments. For almost 80 per cent of the farmers, Rs 24,000 a week was more than sufficient.

The banking sector has been working very hard. How did your bank manage with the situation?

We have been working very hard for the last one week and have got reinforcements from other departments to handle the situation. The employees who never sat at cash counters, were made to sit. These employees were a bit slow than those who regularly manage the cash counters. Some of the employees even gave a few clients more cash and had to deposit that money from their pocket. Also, we had employed a few retired employees to handle the situation.

By when will the scrapped notes be replaced?

The money has been replaced already. The 500 notes have already been replaced, but the 1,000 notes will not be replaced. The situation in city like Chandigarh, Panchkula and Mohali – where people are aware and know how to use plastic money – is better. The people are facing difficulty in suburbs and rural areas. We have faced problems in places like Ludhiana, where there is high density of labour population. The workers working in factories received their salaries in old currency notes in the second week of the month. They stood in long queues outside our branches and were restless. They also broke the gate as they wanted to get the money exchanged urgently. We managed with the help of police in Ludhiana. We understand that people were desperate then, but now the situation is under control.

The workers were also released salaries in advance. Are the banks located in areas with high population of workers experiencing money deposits?

The State Bank of Patiala has received deposited money worth Rs 5,000 crore in the last one week of old currency notes from Punjab, Haryana and Himachal.

Are the ATMs functioning?

In the initial days, we faced cash crunch. After the Rs 2,000 notes were introduced, the problem reduced. Initially, we were unable to do anything and were handicapped. We used to replenish the funds at the ATMs and it used to finish within an hour and there used to be Rs 100 notes. After two or three days, we received Rs 2,000 notes and the situation became manageable. As soon as the cash finished, we receive an alert and we replenished it within 30 minutes to an hour.

What have been the benefits of demonetisation?

Some of the Rs 14 lakh crore of scraped notes are with the public. Up to December 31, whatever is deposited in banks will be of use and the rest will turn into a piece of paper. Till now, Rs 5 lakh crore has been deposited. One of the biggest advantages of demonetisation is that people have started using plastic money. People will get used to digital money. We have already received requests from businessmen for point of sale (POS) machines. So, people do not need to carry cash, they will just swipe their cards at shops.

By when the situation will be under control?

The ATMs are being modified as per the measurements of the new currency notes and within a week, the situation will be under control. It has already improved a lot. Soon after the demonetisation, we used to seek replenishments from the Reserve Bank of India quickly. The RBI has been working day in and out. Now, we seek replenishments after a day or so.

What will be the impact of demonetisation in the near future?

The rate of interest on loans is likely to be decreased, as the cash has flown in the market after the scraping of notes.

What was the maximum amount deposited in the branches of PNB in the northern region?

One man had deposited Rs 15 crore in his bank account after the announcement was made by Prime Minister Narendra Modi.