Cash crunch: Bank unions blame govt, RBI and threaten agitation; planned move could worsen customer woes

Bank employees are facing the wrath of the public for a problem created by the government and the Reserve Bank, the All India Bank Employees Union said

PTI April 19, 2018 17:50:12 IST
Cash crunch: Bank unions blame govt, RBI and threaten agitation; planned move could worsen customer woes

Vadodara: Claiming that bank staff is facing public anger due to cash crunch at banks and ATMs, the All India Bank Employees Union (AIBEA) today threatened to launch an agitation as it blamed the government and the Reserve Bank of India (RBI) for the situation. Bank employees are facing the wrath of the public for a problem created by the government and the Reserve Bank, association's general secretary C H Venkatachalam said. "Customers are shouting at us and abusing bank staff for no fault of theirs. Mere statements will not help. Concrete, immediate action is needed to improve the supply of currency notes," he told PTI over phone. He threatened a nationwide agitation by the unions if the situation is not resolved at the earliest. However, he did not specify any timeline.

For the past few weeks, banks in several states, especially in UP, MP, Rajasthan, Gujarat, Telangana, Andhra and the poll-bound Karnataka have been facing severe cash shortages, with many ATMs showing 'no cash' signboards. While the central bank has claimed that there is enough printing and supply of cash, the government attributed the unusual spike in cash demand to ongoing farm procurement.

Blaming the government and the Reserve Bank for inadequate supply of cash, he said, in fact, the problem started with the decision to print Rs 2,000 notes after the note-ban announcement in November 2016. "If the Rs 1,000-notes were withdrawn to prevent black money and cash hoarding, it is only obvious now that both have
become easier with the Rs 2,000 notes," he said.

Blaming the central bank for the poor cash management that has led to the present shortage, he wondered if the RBI governor is to be believed where have all the money gone.

"The RBI governor has made a statement that adequate amount of currency notes are printed. But then where have these notes gone? Are they not to investigate? Are they not to ensure that banks have enough cash to meet the requirements of the public?" he asked.

Cash crunch Bank unions blame govt RBI and threaten agitation planned move could worsen customer woes

File photo of queues outside banks. Representational image. Reuters

He also alleged that even 16 months since the demonetisation, many ATMs are still not re-calibrated for the newly designed banknotes. "This is adding to the problem," he said, and noted that the Financial Resolution and Deposit Insurance Bill, pending for Parliamentary approval, has also added to the problem.

The Bill seeks to bail out a failing bank with the depositors' money if the proposed resolution corporation deems it to do so, and can refer a bank for liquidation. He said there is a fear among the public about the proposed bail-in clause in the Bill. He demanded that the government immediately withdraw the Bill.

The present shortage is creating more doubts and fears among the public whether all is well with the banks. "It is the duty of the RBI and the government to dispel these fears,"he said.

Meanwhile, the largest lender SBI said the cash shortage will be resolved by tomorrow as currency is being transported to the areas facing the shortage. "It is not a uniform cash crunch problem. It is there in geographies like Telangana and Bihar. We are hoping that the problem will be resolved by tomorrow because cash is in
transition and it is reaching these states by today evening," SBI chairman Rajnish Kumar told reporters in New Delhi.

Holding cash hoarders accountable for the crisis, Kumar said the money should be recycled, meaning that if people withdraw money from the bank and the money needs to be deposited back as well.

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