Ahead of payday, banks gear up to meet the rush in Gujarat

Will not pay employees’ salaries in cash, says deputy CM Nitin Patel.

By: Express News Service | Ahmedabad | Published:December 1, 2016 12:34 am
demonetisation, cash crunch, gujarat demonetisation, no cash, salary day, bank rush, cashless economy, indian express news, india news, gujarat government, gujarat news The union of state government employees had demanded that the state government pay the salaries of employees for the month of November in cash.

Responding to the demand of the union, Gujarat Deputy CM Nitin Patel Wednesday ruled out any possibility of the state government paying its employees salaries in cash due to the shortage of notes in banks. The union of state government employees had demanded that the state government pay the salaries of employees for the month of November in cash. When asked about this demand, Patel said that the salaries of employees will be done as per regular practice of depositing the same in their bank accounts.

Meanwhile, banks, both public and private, continued to battle the cash crunch ahead of the payday, with some sending out messages to customers to shift to mobile and internet banking. Kotak Mahindra bank sent out a message to its customers, stating, “The cash situation is being handled considering the stock of currency notes received from the RBI and the availability in currency chest, resulting in ATMs/branches running out of cash. Apologies for inconvenience, we are doing our best. Meanwhile, please use mobile/net banking, debit/credit card to make and receive payments.”

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Public sector banks also seemed to be struggling without adequate cash in preparation for Wednesday which is expected to be the salary day. “Looking at the reaction of the people after demonetisation, we are expecting a huge rush. We are, however, unable to predict what will be the kind of withdrawals we will see. We have received only a small part of the amount of cash that we requested for in anticipation for Wednesday,” said a senior official of the Dena Bank, who refused to divulge figures.

Banks like SBI have set up separate counters for their customers to withdraw their salaries. “As of now, we have adequate cash. We are predicting people to queue up and so we will be opening a couple of special counters tomorrow,” said R Gohil, deputy manager of SBI’s Ahmedabad main branch, which usually has a cash retention limit of Rs 150 crore.

Vitthal Radadiya, chairman of Rajkot District Cooperative (RDC) Bank and BJP MP from Porbandar, who had a meeting with Prime Minister Narendra Modi in New Delhi on Monday, said, “I apprised the PM of the difficulties faced by the District Central Cooperative Banks (DCCBs). The PM assured us that he will look into the issue and that the matter will be solved very soon.”

RDC Bank had collected Rs 599 crore worth of old currency notes before RBI restrained DCCBs from accepting deposits in demonetised Rs 500 and Rs1000 notes. “Since then, we have got around Rs 30 crore remittances. We are expecting to get Rs 25 crore more remittance on Thursday,” added Radadiya.

But the situation is worse in Amreli Bank. “We have not got a single rupee remittance for the last three days and we are not sure if we shall get any on Thursday,” said Dilip Sanghani, bank chairman. Sanghani, who is also the chairman of the National Federation of State Cooperative Banks Limited (NAFSCOB), the apex body of state cooperative banks in the country, also pointed a finger at the RBI. “One the one hand, the RBI says it has removed restrictions from DCCBs, but on the other, it is not giving us valid currency notes,” said Sanghani.

Nanu Vaghani, chairman of Bhavnagar district cooperative bank, has moved the Gujarat HC, challenging the RBI’s restrictions on DCCBS in accepting old currency notes deposits.