The new `2,000 notes will reach bank branches by Thursday and ATMs by Friday, Ashutosh Khajuria, executive director at Federal Bank told FE. Meanwhile, banks are taking all steps to see that there is no shortage of `100 notes in the system. The government on Wednesday announced notes of `500 and `1,000 would cease to be legal tender as of midnight Wednesday. New notes of a denomination of `2,000 and `500 are to be made available shortly.
Khajuria said any shortage of currency could be handled by foregoing the practice of culling soiled notes. “Normally, we sort the notes and soiled notes are sent for destruction and only the re-issuable notes are filled up in ATMs. However, looking at the demand for 100-rupee notes in the initial days, we may see even the soiled ones go into circulation for some time,” he said. Rakesh Sharma, managing director and CEO at Canara Bank, said the bank had set up a control room at head office to help all our offices and branches. “Our technology department has taken steps to implement all the measures directed by government and RBI. Our currency chests are being closely monitored for supply of new currency and collection of withdrawn currency.” The bank will also extend working hours at its branches.
According to Reserve Bank of India (RBI) data, the aggregate value of 500-rupee notes in the system, as on March 30, was `7.85 lakh crore, that of 1,000-rupee notes was `6.33 lakh crore and that of 100-rupee notes was `1.58 lakh crore.
State Bank of India (SBI), will extend working hours on Thursday to 6pm. In addition, it is setting up exchange counters at its branches for exchanging notes of `1,000 and `500 denominations up to a maximum of `4,000, in accordance with the RBI guidelines. Customers will have to provide identity documents and a duly filled in exchange slip to avail of the facility.
Punjab National Bank managing director and CEO Usha Ananthasubramanian told a television channel that the bank’s branches will be open on Saturday and Sunday and some of them may be open on Monday as well.
Mid-sized state-owned lender Union Bank of India is setting up additional counters on Thursday. Union Bank executive director R K Verma said that depending on the volume of requests for exchange of notes, the bank will take a call on keeping its branches open beyond ordinary working hours on Thursday.
Rakesh Sethi, chairman and managing director of Kolkata-based Allahabad Bank, told FE, “If required, our bank branches would remain open for a longer period of time from tomorrow for the customers for exchange and deposit of now-defunct old notes. All our general managers will be on the
field tomorrow to visit branches in order to ensure smooth transactions for the customers. We will monitor the situation closely.”
ICICI Bank, the country’s largest lender from the private sector, has released a list of 10 measures it is undertaking to ease the experience of demonetisation for customers. Apart from additional cash counters and extended branch timings, the list includes waiver of charges on deposits in savings accounts up to November 30 and those related to transactions at the bank’s ATMs by its own customers up to December 31. It has also doubled the daily usage limit of debit cards for use at point-of-sale machines and online transactions.
SBI said in a statement, “As of now, the bank has sufficient notes of R100 denomination to be dispensed through ATMs and branches.There is no need for any panic as specified bank notes can be deposited in the account without ceiling up to December 30, 2016 with the bank.”
Yet another concern has been around the recalibration of ATMs to offer notes with the new denomination. Some bankers expressed doubts about being able to complete the operation across all ATMs by Friday. India had 2,01,861 ATMs at the end of July, according to data available with the RBI.
Currency in circulation has been growing at an accelerated pace in the last 12 months, with the growth rate being higher than the five-year average, driven by factors such as state elections, festival-related increase in currency demand and a jewellers’ strike in April. “Indeed, currency in circulation grew by 17.2% y-o-y (year-on-year ) as of October 28, compared to five-year average growth of 12.1% for October,” Morgan stanley wrote adding,”We believe that the increase in government regulation needing documentation of large transactions may have led to a rise in currency with the public, leading to another argument for the measures to demonetise high value currency.”