Cash shortage hits goods movement in India as ATMs remain dry

Cash shortage hits goods movement in India as ATMs remain dry

Troy Powers
November 15, 2016

At the same time, bank branches were closed for the day today on the occasion of Guru Nanak Jayanti aka Guru Poornima, which directed commoners to nearest ATMs. ATMs are shut down because they must be adapted to the new banknotes and banks are besieged by desperate clients, some of whom are lining up seven hours to exchange their money. The new 1000 rupee note with added features will soon roll out in the market. It may be noted that with 1.2 lakh banking correspondents and 1.3 lakh branch post offices getting further activated, a total number of 2.5 lakh points in rural areas will be available to disburse cash and facilitate cash withdrawals from bank accounts, he said. Besides, BCs will be supplied cash several times a day as against once daily earlier, he said.

The new series of Rs 500 notes will be reaching city from RBI Patna on Tuesday evening and it will take around 48 hours for the notes to find its way to the almost 500 ATMs in the city.

Economic affairs secretary Shaktikanta Das said that ATMs are expected to start dispensing Rs 2,000 notes as soon as Tuesday. The deadline by which old notes can be used - at government hospitals, petrol pumps, railways etc - has been extended to November 24 from November 14, he added. As and when they are recalibrated, the cash limit of such ATMs will stand enhanced to Rs. 2500 per withdrawal.

Prime Minister Narendra Modi on Sunday defended his move to withdraw 500-rupee and 1,000-rupee notes from circulation as an important step in the fight against corruption and tax evasion.

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All India Bank Employees' Association (AIBEA) has sought immediate intervention of the Indian Banks' Association (IBA) to overcome the crisis condition due to shortage of ₹100 and new ₹500 denomination currency notes.

He also raised concerns about the shortage of ₹100 notes and demanded that the RBI immediately ensure adequate supply of ₹100 and new ₹500 denomination notes. "However, the situation will be much under control as the bank branches would open on Tuesday with additional cash availability", said a Branch Manager level official of State Bank of India (SBI) on Monday. The cash withdrawal limits for Banks will apply in case of DCCBs also.

All government departments and central public sector undertakings will maximise digital transactions, he said. The waiver is applicable from November 10 to December 30, 2016, the central bank announced in a circular. An ATM recalibration taskforce has been set up under the chairmanship of an RBI deputy governor to expedite the process.