Demonetisation: Salaries have been credited but people can’t withdraw due to acute cash crunch

Long queues outside banks and no cash in the ATMs are leaving people high and dry as they are unable to withdraw their salaries.

On the first payday after demonetisation, people thronged ATMs in huge numbers but the cash got over in no time. This is primarily because of the shortage of new Rs 500 notes.

Banks have said the situation is unlikely to improve as there is shortage of cash from the RBI too.

"The situation will not change much from our side even if it is salary day because there is not enough cash in bank branches or ATMs. The situation will only improve once Rs 500 notes come into circulation and it will take days before that happens,” a bank official told ET.

However, the Reserve Bank of India (RBI) said they will increase the supply cash.

"RBI is currently supplying cash based on a variety of calculations including how much a bank branch got the previous day. That will continue. We will continue to ration cash,” another banker told ET.

The weekly withdrawal limit is Rs 24,000 for savings accounts and Rs 50,000 for current accounts.

ATM withdrawals are limited to Rs 2,500 at a time from dispensers recalibrated to take new Rs 500 and Rs 2,000 notes. Those that haven't been reprogrammed will dispense Rs 2,000 at a time.

"We have done an analysis on how much cash will be required based on the number of companies which distribute their salary through us. However, there are many things which are not under our control like if people decide to withdraw their full weekly limit on one day or how much RBI gives us. Then there are other normal cash demands from our current account customers which we cannot ignore. We are hoping we can meet the demand,” the retail head of a large private sector bank told ET.

Of the total 4,075 RBI-owned currency chests in India, State Bank of India and its associates manage more than half. Other public sector banks manage 1,173 chests while private ones run 160.

(Image: Reuters)