1. Pay day rush: Banks cut withdrawal limits, ask companies to give prepaid cards; employees worry long queues

Pay day rush: Banks cut withdrawal limits, ask companies to give prepaid cards; employees worry long queues

The next big test of banks is meeting month-end demand of lakhs of salaried employees and pensioners. Also, to beat the imminent cash crunch, banks are setting internal daily cash withdrawal limits per account.

By: | Published: November 30, 2016 11:47 AM
In a bid to relieve pressure on banks, the government, on November 17, allowed its Group C employees, including from PSUs, defence and railways, to draw salaries up to Rs 10,000 in cash in advance. In a bid to relieve pressure on banks, the government, on November 17, allowed its Group C employees, including from PSUs, defence and railways, to draw salaries up to Rs 10,000 in cash in advance.

The next big test for the banks is here! Wondering what is that? We’ll tell you. The next big test of banks is meeting month-end demand of lakhs of salaried employees and pensioners. RBI has ruled out any impact of demonetisation over payment of salaries to either government or private sector employees. But the salaried are not ruling out another round of serpentine queues at ATMs and a terrible shortage of lower denomination notes. The Indian Banks’ Association (IBA) has issued an advisory to banks for maintaining adequate cash in view of the rush at the beginning of the month and maintain normalcy, says a Hindu report. However, bankers said the supply of cash was much lower than the demand. “Since Rs 500 and Rs 100 denomination notes are only being printed now, so the branches and automated teller machines are running out of cash frequently,” chief executive of a public sector bank told The Hindu. Printing presses have stopped printing Rs 2000 notes for the time being, several bankers pointed out.

Also, to beat the imminent cash crunch, banks are setting internal daily cash withdrawal limits per account, while the government has asked private companies to make payments to employees digitally. According to an Indian Express report, banks have suggested to large companies that they should give prepaid payment cards to their employees in lieu of cash, industry sources said. “We are making arrangements so that there aren’t any problems in the days to come. There should not be any inconvenience to the salaried class, pensioners or any section of society. We have made arrangements, and will be able to say whether these are adequate or not only on the day when money comes into the accounts of pensioners and salaried people. We’re hopeful that there won’t be any problems,” a top official of the Bank of Maharashtra told Indian Express.

In a bid to relieve pressure on banks, the government, on November 17, allowed its Group C employees, including from PSUs, defence and railways, to draw salaries up to Rs 10,000 in cash in advance. Several ministries have also deployed point of sale (POS) machines within the office premises to dispense cash for staffers, in a bid to take some pressure off the banking system. In an interview to PTI last week, RBI Governor Urjit Patel said the central bank was monitoring the situation on a daily basis and urged people to start using debit cards and digital wallets. This will make transactions cheaper and easier, helping India reduce the use of cash and bring it on par with developed nations, he said.

The RBI has also doubled the limit on balance that can be kept in prepaid wallets and cards to Rs 20,000 till December 30 to ease the situation.

  1. George Cv
    Nov 30, 2016 at 6:49 am
    The superboy has opened the pandora's box !
    Reply
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      Tommy
      Nov 30, 2016 at 10:00 am
      I am in Kochi.For last two days I have been trying to get some 500/100 notes through ATMs,but these dispense only 2000 notes !
      Reply
      1. S
        S. Malhotra
        Dec 1, 2016 at 4:20 pm
        io, 8th Nov started with Demonetization to ferret out black money. How has it suddenly become an exercise for a cashless India? If it was the latter it could have been a continuous exercise (perhaps speeded up) but not at all disruptive. Why are goal posts changed suddenly?
        Reply
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          mdsbaig
          Nov 30, 2016 at 8:26 am
          Dear Mr. Tanmay Singh, there should be a reasonable transition period for a Big Transformation. Till this Digital payment system reaches to Villages and Farmers... sufficient liquid cash in small denominations must be in circulation. I am from Hyderabad and till date we had not seen Rs 500/- note in any bank. we are struggling to get change for Rs.2000/- for street vendors, Milk supply and small petty expenses. we can bear this for another one month. But after one month, what is going to happen?... no body knows.But still we are with the betterment of the nation.
          Reply
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            Murali Natarajan
            Nov 30, 2016 at 8:10 am
            Ask them to use Card , cheque and other means . These ried cl are well educated and they should lead in going for cashless transactions. All the ries are credited to their bank accounts only. NO cash payments. Think about India ahead - this way -less cash-less corruption, crime and terror
            Reply
            1. P
              Prabhu
              Nov 30, 2016 at 9:09 am
              Working in Chennai, you have access to all ways of transaction and you will also be able to educate people as well. However, what's the status of the villagers? I am from a small village from the southern part of India and am working in Bangalore. In our village, there is no bank. We have to travel nearly 6 km by bus, cycle or walk to visit a bank. Honestly speaking, most of the people do not have a debit card; it includes my mom as well. How do you expect such people to go digital? Going digital is the way forward. However, it should happen gradually. First of all, banking needs to penetrate every nook and corner of the villages and then the results will be achieved.
              Reply
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                Krishj
                Nov 30, 2016 at 8:59 am
                Whys hould the ried cl wait in queues to take their own hard earned money where as the politicians have crores of money that the Prime Minister is not touching. Why should the salried cl suffer and normal man suffer in India. This is a painful day for people.
                Reply
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                  Anbumani Thiagarajan
                  Nov 30, 2016 at 7:01 am
                  People in the informal sectors are going to suffer heavily. Even ried people may find it difficult to withdraw their hard earned money from bank accounts. Please are wasting their productive time by standing in bank queues. Sorry state of affairs. If people express their hardships they may be clified as anti nationals.
                  Reply
                  1. V
                    vaishak
                    Nov 30, 2016 at 9:40 am
                    Even though rs500 and rs1000 has been banned ,it has not successful in curbing the black money. People are using too many ways to make it white.I personally feel banning notes has not been successful in curbing the Black money, or corruption. Also its upto 2.5 lacs per account with tax free that a person can deposit. people are using their other accounts to deposit. There is also ets made from illeagal means. even that comes under Black money. there are people who have converted their black money into Gold
                    Reply
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                      Vittalanand
                      Nov 30, 2016 at 7:44 am
                      The reserve bank, Modi and jaitly shall be ashamed for this. 20 days are over and even now 500 s currency are not in sight. Advising to make card transactions is easy. This is India Most of the house wives do their transactions through street vendors not at Reliance stores. To trade with street vendors they must have POS machines duly accounted for with Banks .All the house holds are to be provided with debit cards. again pressure on Banks to open accounts and provide debit cards. These are not one day work. Gradual transition is the only way. Since then they must have liquid cash. Perhaps this is the only country to investigate black money with common man and leave the Ambanis and Adanoins to deposit their wealth in Switzerland. As of now, immediate need is to release 500 s and more 100s, 50 s twenties and 10 s for circulations.
                      Reply
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