Lines grow longer and ATMs run dry as demand races ahead of cash supply yet again

The National Capital Region was shrouded in thick winter fog when Balbir Singh began standing in line at the Central Bank of India branch in Noida at 5 am on Thursday.
“I have been doing the rounds of banks for the last 20 days but was going back seeing the rush,” he said. “With payday, I thought I will come early and stand in queue but now the bank says it has no money.”

That theme played out across the country and despite currency supplies having picked up, demand was correspondingly higher with November salaries getting paid. And, even though the recalibration of automated teller machines is nearly complete, there wasn’t enough cash to fill them, bankers said. On top of that, those banks that had cash were resorting to rationing in many cities.

Customers of state-owned banks seemed to be luckier than those of private ones, going by the accounts of people standing in queues in some of India’s biggest cities. A number of private bank branches had run out of currency before noon but government-owned ones were still dispensing cash until closing time in Mumbai. However, some were enforcing withdrawal curbs of their own — Rs 6,000-8,000 against the weekly limit of Rs 24,000 for savings accounts and Rs 50,000 for current accounts.

At private bank branches that ET visited in Mumbai and elsewhere, managers were seen advising disappointed customers to come back early on Friday. Bankers said they were working overtime to meet payday requirements. State Bank of India Managing Director Rajnish Kumar said things will improve once supplies of the new Rs 500 notes increase.

“There is no shortage of Rs 2,000 notes, but acceptability is an issue because there is a gap between Rs 2,000 and Rs 100 note (the next lowest denomination),” he said. “As the supply of Rs 500 notes increases, the acceptability of the Rs 2,000 note will also go up.” Many of the ATMs with cash had only Rs 2,000 notes.

Rs 10 lakh cr deposited since November 10
Adding to the pressure at branches was the move by some employers to pay workers in the Rs 500 and Rs 1,000 notes that were demonetised on November 8. These employees perforce had to deposit them in their bank accounts. A key exemption — paying for fuel in old Rs 500 notes — ends on Friday.

Of the Rs 15 lakh crore that existed in old currency, bankers estimated that about Rs 10 lakh crore has been deposited in banks since November 10. This couldn’t be independently verified.

Some branches tried to make things as comfortable as they could for customers. State Bank of India and HDFC Bank at Andheri, and Bank of India at Santacruz set up shamianas and arranged chairs for customers to wait.

ICICI Bank was trying to help those with salary accounts.

“We are deploying point of sale (PoS) machines at various office premises to facilitate cash withdrawal by their employees,” a spokesperson said. “We are also setting up special camps at various companies on our digital banking solutions to create more awareness among customers about digital payments.”

Banks pitch in
An Axis Bank spokesperson said, “We are prioritising cash filling at the ATMs located at and around corporate locations. We are using micro-ATMs at corporate sites. We are also very actively educating customers to use non-cash modes to make payments.”

A Kotak Mahindra Bank spokesperson said, “We are ensuring equitable distribution of cash received from RBI across our branches and ATMs such that customers face minimal inconvenience.”

In Chennai, rain added to the woes of people seeking currency — Cyclone Nada is expected to cross the coast early on Friday.

D Santhosh, a 21-year-old accountant at a jewellery shop in the shopping hub of T Nagar, waited for an hour but was able to get cash. “Of course, withdrawing today, of all days, is essential. I have to send some money to the family,” he said. ATMs in Parry's Corner near the city’s port had long queues as employees from the city’s largest electronics goods hub Ritchie Street walked out in the rain to withdraw cash. Many ATMs elsewhere in Chennai, however, had ‘Out of Service’ signs on them.

In Bengaluru, most ATMs were shuttered. In the posh Koramangala area, ET visited 17 ATMs — of these only three were functional. “The bank straight ahead (ICICI Bank) has four ATM machines and only one machine is functional. I support (Narendra) Modi’s move, but the execution is a failure,” said a human resources manager.

P Hampaiah, chief manager of Canara Bank’s Shivajinagar branch, said ATMs were not being reloaded as most people were withdrawing Rs 1,900 in order to avoid the Rs 2,000 denomination notes.

Withdrawals capped
In bank branches, customers were being allowed to withdraw only Rs 10,000 from savings accounts and Rs 20,000 from current accounts, sparking arguments with business owners. The higher limit had been set to allow businesses to pay wages to workers.

While the Shivajinagar branch of Canara Bank requires Rs 1 crore a day to service 27,000 customers and the salary accounts of over 20 companies, it received only Rs 20 lakh, an official said.

State Bank of India and State Bank of Mysore, however, did not have much of a problem in Bengaluru. Vinayak Joshi, accountant at SBM’s MS Building branch, said all government employees working in the high court and secretariat have salary accounts in the branch. “We have not faced problems distributing cash. We are giving Rs 24,000 to all savings account holders,” he said.

In Hyderabad, most ATMs were shut and there were long queues at banks, which were rationing cash. “We have capped cash withdrawal at Rs 10,000 per person as the supplies of cash from RBI are not sufficient,” said Seshagiri Rao, a deputy general manager at Andhra Bank. “We have been receiving only 12-13% of our requirements and there is also a dearth of Rs 500 and Rs 100 notes.”

A manager at Bank of India said his branch would normally disburse Rs 25 lakh daily but on Thursday they had just Rs 4 lakh. The situation seems to have improved marginally in smaller towns in West Bengal where more cash is being made available. Earlier, they were giving out only Rs 2,000 per person. “I could get Rs 10,000 from my bank branch for the first time since demonetisation,” said a person in Alipurduar, West Bengal.

At Santoria, the Eastern Coalfields headquarters in Bardhaman in West Bengal, cash availability was still controlled but currency was available at almost all branches of the area. “Salary dates of our workmen are staggered here, some get salaries between 1st to 5th, others get between 6th and 10th and so on. Since it is staggered, the pressure on bank branches is not much," said a senior Eastern Coalfields official.

Kerala saw long queues of pensioners at treasury counters. Most had to be satisfied with less than the Rs 24,000 limit, particularly in rural areas. Kerala Finance Minister Thomas Issac said in Thiruvananthapuram that though the state had demanded Rs 153 crore from RBI, only Rs 75 crore had reached by noon.