In the last two months of 2016, banks across the country had struggled with endless queues and an immense demand for cash, forcing them to ration the distribution of cash and often turn away customers due to the lack of it. Almost a year later, the banks are dealing with another issue, the availability of more than enough cash.
Most of the public sector banks, as well as the urban cooperative banks (UCBs) in Pune, are complaining about excess cash that the RBI’s currency chest is not ready to accept from them. Brij Mohan Sharma, chief general manager and zonal head of IDBI, Pune, said the bank is now breaching the cash limit. “We have about Rs 11 crore in excess with us,” he said.
As the disposal of old currency notes is a continuous process, sometimes the apex bank struggles to accept excess currency notes from the banks due to a lack of space to accommodate excess cash, said Sharma. The IDBI had deposited about Rs 5,000 crore in old currency notes with the RBI during the demonetisation period.
Vijay Dhere, president of the Pune union of UCBs, also said the 52 cooperative banks in the district had deposited close to Rs 3,000 crore in old currency notes with the RBI till the end of December. “Now, the banks have excess cash… we are also facing problems with Rs 10 coins,” he said.
Customers are now depositing these coins as they fear that these coins may be withdrawn soon. “There seems to be a fear among the public that such coins will be withdrawn… Our coffers are filled with such coins but the RBI is not accepting them from us,” he said.
In the period after demonetisation, cooperative banks had complained of step-motherly treatment, claiming that sufficient amount of new currency notes were not being given to them. These banks also saw an exodus of customers, who opted to electronically transfer their money to public sector banks, as such banks had not faced any liquidity problem. A year down the line, Dhere said almost 99 per cent of their customers were back with the UCBs. “Neither the private nor public sector banks have the capacity to provide service to such customers,” he said.