Cross-posted from Zero Hedge
Five months have passed since the demonetisation drive, but the people of India continue to face a shortage of cash in banks and ATMs. The Times of India reports that more than 90% of the ATMs in the northern region do not have cash, and in the southern states as many as 65% of ATMs have run dry.
Speaking to TOI, State Bank of India (SBI) deputy general manager Ajoy Kumar Pandit said the customers are losing confidence in them due to the crisis. “Nearly 70 per cent of our 648 ATMs in the three districts are out of cash. The rest will also become dry in the next few days as we do not have cash to refill the machines. We are helpless from our side,” he said.
A banking source said the RBI has diverted most of the cash to north India due to the recent elections. This has affected the southern parts of the country. “The government’s intention is to encourage smart payment systems, but the infrastructure is not up to the mark,” the source said. Many ATMs have not been upgraded with the new software required for handling the new Rs 500 and Rs 2,000 denominations, the source added.
India.com notes that worst hit is the common man, who has been suffering the pinch even as the government has made an effort to make available sufficient cash in ATMs across the nation. The post-demonetisation woes continue to haunt the common man in the country as many ATMs in metro cities seem to be running low on cash for the last week.
“No Cash” signs hang across ATMs across India…
One of the reasons why ATMs would be short of cash is because of the charges that have been levied in the coming months on ATM withdrawals. Currently, a customer has to pay Rs 20 per ATM withdrawal after five free transactions a month from a bank one has an account in. Customers using ATMs of banks they don’t have an account in are charged Rs 20 after three free withdrawals. However, banking officials said on Thursday that banks may slash the number of free ATM withdrawals or hike the charges levied to discourage people from using cash.
According to a survey conducted by the LocalCircles citizen engagement platform, it was reported that the availability of cash at ATMs has worsened in the last two months or so in many parts of the country. It reported that eighty-three per cent citizens who visited ATMs last week in Hyderabad, could not find the cash while it was 69 per cent in Pune.
C.H. Venkatachalam, general secretary of All India Bank Employees Association was quoted by Free Press Journal saying, “Actually, the problem is directly linked to demonetisation. Many ATMs are yet to be recalibrated. Plus, people have started hoarding Rs 2,000 notes. There is still a huge mismatch in the demand and supply of currency notes.” Meanwhile, Ashish Gupta, research analyst at Credit Suisse was quoted by Financial Times saying, “The government wants to slow down the cash money in the economy. They want the new equilibrium level in the economy to be lower”.