NEW DELHI: Even as debate rages over the positive and negative impacts of demonetising Rs 500 and Rs 1,000 notes, the next big challenge is here for banks, government and most important of all - people. With first week of the month being the time salaries are deposited and withdrawn to pay bills, millions of working class people across the country are evidently tense, thanks to the currency crunch.
So are banks, bracing to face a huge rush in the coming days. With a large number of ATMs still remaining dry, the overall scenario looks grim and might continue to be so for the next few days. The All India Bank Employees’ Association has sought police protection for bank branches for the next 10 days, said its general secretary CH Venkatachalam. “Already people who are frustrated are locking branches from outside in places like Uttar Pradesh, Bihar and Tamil Nadu,” he said in an interview to Bloomberg.
Meanwhile, the central bank and Finance Ministry have swung into action, though at the eleventh hour, to help banks face the payday crisis by introducing a slew of new measures. Accordingly, the Reserve Bank of India claimed it would pump more money into the banks from Wednesday evening.
The Finance Ministry said the cash crunch over the last two days was the result of a deliberate tightening of supply to ensure there is enough to meet the payday demand. This increase in cash supply, according to the government, would continue till December 7. In a welcome move, the currency printing presses of the central bank have moved to print the much-in-demand `500 notes to ease the supply. They were earlier printing only Rs 2,000 notes, which found few takers. The presses, however, would continue to print Rs 2,000 notes intermittently.
The central bank also said that it would increase cash supply to banks with salary or pension accounts by 20 to 30 per cent. News reports also claimed banks have asked large companies to provide prepaid payment cards to staff in lieu of cash.
Naidu to head six-CM panel
The Centre has announced the setting up of a 13-member panel, to make an action plan on expanding the use of digital payments. AP CM Chandrababu Naidu would head the panel which also includes Naveen Patnaik, Shivraj Singh Chouhan, Pawan Kumar Chamling, V Narayanasamy and Devendra Fadnavis.
Bank unions demand more cash
Bank unions have demanded RBI to increase cash supply to meet the demand. There are rumours that branches are hoarding cash but it is far from the truth as cash received by banks is being passed on to the customers, RSS backed National Organisation of Bank Workers (NOBW) said in a statement.