Amid unending reports of hassles faced by the people due to legal-tender banknote shortage — which has also impeded many economic activities where cash transactions are the norm — the finance ministry on Monday augmented delivery channels across the country to help cash-starved citizens. It announced a slew of new measures such as enhancing the current account withdrawal limit to Rs 50,000 per week for businesses, extending the period under which identified utilities can be paid in old Rs 500 and Rs 1,000 notes until November 24 and increasing the cash handling limit for banking correspondents and post offices.
Speaking at a political rally at Ghazipur in Uttar Pradesh, Prime Minister Narendra Modi strongly defended the demonetisation of high-value currencies, saying the menace of fake currency could not have been checked if such a big offensive was not initiated. Lambasting the Congress and other parties that are opposing demonetisation, Modi said: “After demonetisation, the poor are enjoying a sound sleep while the rich are running from pillar to post to buy sleeping pills.”
“My decision is a little harsh. When I was young, poor people used to ask for ‘kadak’ (strong) tea but it spoils the mood of rich,” he said at the BJP’s Parivartan Yatra rally.
Modi had burnt the midnight oil, holding a high-level meeting in this regard between 10 pm on Sunday and 1.30 am on Monday. Besides Cabinet ministers including finance minister Arun Jaitley, Reserve Bank of India governor Urjit Patel and all secretaries of the finance ministry, apart from other officials from the government, RBI and banks, attended it.
SBI chairman Arundhati Bhattacharya said the country’s largest bank witnessed total transactions (95% of which were deposits) of over R1 lakh crore between November 10 and the close of Monday’s business hours.
This indicates that the additional deposits received by all commercial banks so far due to demonetisation might have crossed R4 lakh crore, close to 40% of the total value of the Rs 500 and Rs 1,000 notes before they were tendered “not legal tender”.
Addressing media persons here, economic affairs secretary Shaktikanta Das said a task force headed by RBI deputy governor SS Mundra has been set up to work with banks and all cash-handling agencies to address ATM recalibration issues and complaints related to notes supply. Separately, seven joint secretaries in the finance ministry have been tasked to each coordinate with 4-5 state chief secretaries and a similar number of banks to iron out the wrinkles in implementing demonetisation. Also, district central cooperative banks have been authorised to accept old notes and dispense cash to the public.
Das stressed that “enough cash is available with the RBI and there is absolutely no reason for the members of the public to feel any kind of panic and the supply of various networks will be improved in days to come”.
With regard to rural areas, the official said the cash holding limit for 1.2 lakh banking correspondents (BCs) has been increased to Rs 50,000 and banks have been given flexibility to increase this limit on a case-to-case basis. It has been also decided to provide cash multiple times to BCs so that the rural population is served. Besides, supply of cash to 1.3 lakh branch post offices would be enhanced so that public can get banknotes. Together, these 2.5 lakh delivery points, mostly in rural areas, would be able to give a bigger quantum of cash to the public, he added. For the urban population, recalibration of ATMs has already started and they will start dispensing the new R2,000 currency notes by Tuesday.
On Saturday, the withdrawal limit at ATMs was upped from R2,000 to R2,500 per day in the recalibrated ATMs. Other ATMs will continue to dispense R50 and R100 notes until they are recalibrated. The weekly limit of R20,000 for withdrawal from bank accounts was increased to R24,000. The limit of R10,000 per day was removed, too.
Explaining why ATMs, numbering about 2 lakh, are running out of cash so quickly, Das said: “Each ATM carries four trays. Three used to carry R500 and R1,000 notes while one carried R100 notes. Those three have to now be replaced and recalibrated and tested thoroughly so there are no mistakes of jamming, less/more money coming out, etc. So only one tray with R100 notes is being used. That’s why ATMs are getting exhausted so quickly.” The government was trying to increase the number of recalibrated ATMs as quickly as possible, he added. The government has also taken note of certain people queuing up again and again at ATMs and branches, allegedly exchanging notes on behalf of black money holders.
The ministry of civil aviation has decided to suspend the collection of parking charges at all airports till the midnight of November 21. This has been done in order to facilitate the smooth movement of passengers.
Rituraj Sinha, president, Cash Logistics Association of India, said, “It gives us a great deal of encouragement to work even harder after the finance ministry has taken cognisance of our recommendation to set up an ATM task force.”