Note ban: RBI's adequate cash supply claim and situation in banks different, says bank staff unions - Firstpost
Firstpost

Note ban: RBI's adequate cash supply claim and situation in banks different, says bank staff unions


The All India Bank Employees Association (AIBEA) and All India Bank Officers Association (AIBOA) have in a letter to the Finance Ministry urged the ministry to ensure that the Reserve Bank of India (RBI) takes steps to supply adequate cash to all banks; details of notes supplied to banks be announced publicly by the RBI on a daily basis; enable all ATMs in the country to function with immediate effect and ensure proper protection to bank employees and officers from public ire.

The issue

When PM Modi announced demonetisation on late evening of 8 November, it sent the country into a tizzy with the immediate cancellation of use of Rs 500 and Rs 1,000 currency notes. The government made provision for exchange of notes and also deposits of notes in banks.

Reuters

Reuters

ATMs were not calibrated and could not dispense the new currency notes on account of change in size of notes. It has been 24 days since the announcement and yet there are many ATMs in the country which are non-functional and many run dry of the currency due to the large-scale withdrawal of money.

Another issue is that banks have not been able to get adequate cash in new currency notes and also currency notes in permitted denominations of Rs 100 notes. Bank staff have been severely stressed and tested by the humongous rush for cash.

C H Venkatachalam, general secretary, AIBEA and S Nagarajan, Secretary, general secretary AIBOA, have mentioned in the letter that the banks are awaiting some respite from the problems on account of acute shortage of currency notes.

Banks are confronting currency issues on multiple fronts. Many bank branches are yet to receive the new Rs 500 currency notes. Customers are reluctant and some refuse to accept Rs 2,000 notes since they are not able to transact the same in the market.

There is also acute shortage of Rs 100 notes which has also resulted in ATMs being non-functional, the letter pointed out. This has led to a difficult situation for the banks who have to answer irate customers, he said. Besides, the Rs 100 notes which were being supplied by the RBI are those that were withdrawn from circulation as they were soiled. However, the letter highlighted that these notes were being put back in circulation and were becoming a ‘big health hazard’ for bank staff.

With hardly adequate cash available to disburse to customers, most of them salaried employees and workers, banks are being forced to ration the existing cash stock and permit lesser amount than what the customers want to withdraw. This has, predictably, resulted in tensions and exchange of words between bank staffs and customers which, the letter said, was building physical and mental pressure on the staff.

Bank staff are unable to tell customers when normal supply and flow of cash would be restored or when all ATMs would function normally with adequate cash in them.

The letter said that there were ‘repeated allegations’ that RBI is supplying more number of currency notes to some private banks. Public sector banks are being denied or supplied lesser number of currency notes, the letter said, adding that they wished this information was wrong.

RBI announcement

Though the RBI is repeatedly making public statements that adequate cash is being supplied to banks, the reality is otherwise, the letter said. These statements are making the public to feel that RBI is supplying cash to banks and bank staff are deliberately not extending payments, it said.

Citing the issue, the letter urged that it was ‘highly’ imperative that the RBI should be advised to publicly announce the details of currency notes supplied by them to various currency chests/banks on a daily basis so that the allegations that some selected banks are being favoured with more currency notes and public sector banks are discriminated can be answered properly.

First Published On : Dec 2, 2016 15:02 IST

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