Currency withdrawal: Cash crunch continues on eve of pay day

While many of the branches are yet to get new Rs 500 notes, Rs 2,000 and Rs 100 notes are in short supply, bankers said.

By: ENS Economic Bureau | Mumbai | Published:December 1, 2016 4:02 am
demonetisation, demonetisation deaths, old currency notes, black money, atm queues, atm, banks, bank queues, corruption, pm modi announcement, modi, pm modi, india news, latest news, indian express Long queues outside banks and ATMs have become a common sight following PM Narendra Modi’s announcement to demonetise Rs 500 and Rs 1,000 notes. (Express Photo: Praveen Khanna)

Ahead of the expected rush by salaried employees and pensioners to withdraw cash to meet monthly requirements, the Reserve Bank of India (RBI) has restricted the withdrawal from Jan-Dhan accounts to Rs 10,000 per month to check the misuse and withdrawal of cash from such accounts. On the other hand, the acute shortage of cash continued to dog banks, which are expecting long queues outside ATMs and branches from December 1 when salaries will be disbursed to many employees in firms across the country and by the government to its staffers. While many of the branches are yet to get new Rs 500 notes, Rs 2,000 and Rs 100 notes are in short supply, bankers said.

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Bank unions have warned that the next one week to 10 days are going “to be much more tense because a huge number of employees, workers and pensioners would throng the bank branches to draw from their salary credit and non-availability of enough cash may lead to serious issues of law and order”. “We seek the intervention of the Indian Banks’ Association to advise the banks to ask for police protection in branches to provide proper security to the staff,” unions told Indian Banks’ Association in a letter. On Jan-Dhan accounts, the RBI said, “Fully KYC compliant account holders may be allowed to withdraw Rs 10,000 from their account, in a month. The branch managers may allow further withdrawals beyond Rs 10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record.”

However, limited or non-KYC compliant account holders will be allowed to withdraw only Rs 5,000 per month from the amount deposited through Rs 500 and Rs 1,000 notes after November 09, 2016, within the overall ceiling of Rs 10,000, it said. Total deposits in Jan-Dhan accounts had surged by over Rs 27,000 crore to over Rs 72,000 crore in the first two weeks after demonetisation.

The RBI said this is being done to protect the innocent farmers and rural account holders of Jan-Dhan scheme from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws as a matter of precaution.

Meanwhile, many bank branches said they are getting less than half of the required cash on a daily basis. When customers are reluctant to accept Rs 2,000 notes and in the absence of supply of Rs 500 notes and coupled with shortage of Rs 100 notes, the bank branches are finding it difficult to face the wrath, rage and resentment of the customers. “We get reports of abusive language from the customers on the staff for not being able to give them required cash due to reasons beyond their control. There are reports that due to shortage of cash, customers are asked to withdraw Rs 2,000 or Rs 4,000 instead of Rs 24,000 which they are eligible to, since there is inadequate cash balance in the branches,” CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) said in a letter to the Indian Banks’ Association.

Unions said that the RBI is issuing several of instructions every day and branch staff are unable to cope up with those instantly until they are duly intimated about it from their respective head offices. “Sometimes these instructions of RBI create more problems than solutions,” AIBEA and All India Bank Officers Association (AIBOA) said.