Demonetisation deadline: Where is all the money?

As demonetisation deadline draws closer ATMs continue to be defunct and banks are running out of cash. With demand higher than supply, where is all the money going?

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'No cash', 'Under maintenance', 'Out of order' and many such boards continue to be displayed outside ATM kiosks in most of the cities in the country. With demonetisation deadline coming to an end in two days, recalibration of ATMs is far from complete across the country. The ATMs that have been recalibrated are only dispensing high value Rs 2,000 notes. The limit of Rs 2,000 per day per card hasn't done much to ease the cash crunch.

Most ATMs across the country have been recalibrated to dispense Rs 2,000 notes but not Rs 500 notes. The dimension of cash slots and the holding capacity of the machines are yet to be calibrated to allow dispensing of the new currency notes. While situation in better in ATMs of nationalised banks, ATMs of private banks are mostly defunct. Sight of long queues may not be as common as it as before but no cashlessness continues to haunt ATMs and customers alike.

ATM

The phenomenon isn't limited only to ATMs, even banks do not have supply of new Rs 500 notes. "Only main branches or treasury branches are being supplied with new Rs 500 notes. Our branch hasn't received Rs 500 notes but customers demand for lower denomination notes. We are currently making do with Rs 100, Rs 50, Rs 20 and Rs 10 notes. Since money is also being deposited, we are better off than we were earlier", said a bank manager of a nationalised bank.

[Also Read: Demonetisation deadline: Banks a 'holiday destination' for NRIs]

There have been multiple instances of banks turning away customers who have come to withdraw money. Supply from RBI has been constant to most banks but multiple customers attempting to withdraw Rs 24,000 at a time is leaving the bank cashless. "In many cases, we request the customer to withdraw in parts or on different days. Most are understanding of the situation while others are adamant. It is their money at the end of the day and we are compelled to give them the cash. There have been days when we have run out of money but treasuries only need to be informed about the same following which they supply the money in the afternoon sessions as well", said Bharathi, branch manager with a bank in Bengaluru.


With very few takers for Rs 2,000 notes, demand for lower denomination notes have risen but the same isn't readily available. While ATMs have become far from reliable, people are compelled to turn towards banks which are only giving them Rs 2,000 notes. From cash crunch, it is not change crunch.


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