In a move to ensure equitable and wider distribution of new Rs 500 notes and to also solve the problem of change for Rs 2,000 notes, the Reserve Bank of India has directed banks to deploy a large majority of the new Rs 500 notes in their automated teller machines (ATMs) and use only a small portion of that currency to service customers through their branches.
Senior officials with three banks told The Indian Express that while giving the new Rs 500 notes to banks, the regional chests of the Reserve Bank gave specific instruction that majority of the notes have to be deployed into the ATMs.
A senior official a leading bank told that the Reserve Bank wants that customers of all banks are serviced and which is why it wants that a large portion of the new notes of Rs 500 are deployed into the ATM machines.
“When the money is distributed through branches, the bank branch mostly services its own customers, however through ATM customers of all banks can withdraw and therefore be serviced. This is why the the Reserve Bank wants that majority of new Rs 500 notes are deployed into the ATMs and even the Indian Banks’ Association is supporting the move,” said the source. An official with another bank told that ATMs have lower withdrawal limit and so it is a better way of distributing it to a larger number of people. “Since there is a withdrawal limit of Rs 2,500 per card per day from ATMs, the idea is to have a wider distribution of Rs 500 notes across the country through the network of ATMs,” said a bank official.
As against the ATM withdrawal limit of Rs 2,500 per day per card, withdrawal limit from branches through the use of cheque books is Rs 24,000 in a day from an account (subject to a weekly withdrawal limit of Rs 24,000). Another source said that larger banks are getting more cash than the relatively smaller banks and so if the large banks run their ATMs and keep deploying cash in them, then even customers of smaller banks will get serviced.
While a large majority of the replacement of old notes of Rs 500 and Rs 1,000 till now has been in the form of Rs 2,000 notes, individuals across the country have been facing the problem of change as the value of Rs 100 notes in circulation was limited. According to the RBI data, as of March 31, the value of Rs 100 notes in circulation was Rs 157,783 crore.