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  1. Demonetisation: Kerala hit by cash crunch, may not be able to pay salaries

Demonetisation: Kerala hit by cash crunch, may not be able to pay salaries

Kerala had sought currency worth R1,391 crore for disbursement of state government salaries and pensions, but so far only currency worth R400 crore has arrived.

By: | Thiruvananthapuram | Updated: January 3, 2017 5:18 PM
The Reserve Bank of India (RBI) had informed the state government that only 60% of the currency sought could be made available. Kerala is entitled to only currency worth R1,000 at present, the state had been told. The Reserve Bank of India (RBI) had informed the state government that only 60% of the currency sought could be made available. Kerala is entitled to only currency worth R1,000 at present, the state had been told.

Kerala had sought currency worth R1,391 crore for disbursement of state government salaries and pensions, but so far only currency worth R400 crore has arrived. Though salaries are transfered in Kerala through treasury and bank accounts, the recepients are yet unable to encash it.

The Reserve Bank of India (RBI) had informed the state government that only 60% of the currency sought could be made available. Kerala is entitled to only currency worth R1,000 at present, the state had been told.

“Although currency worth R600 crore had been promised in the first phase of salary distribution, through SBT (State Bank of Travancore), RBI has provided only currency worth R400 crore on January 1,” sources in the state’s finance ministry told FE.

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For salary and pensions, as many as 5.6 lakh and 4.35 lakh state government employees have opted for banks and treasuries, respectively. Of those who have opted for government treasuries, about four lakh are pensioners.

On the New Year day, when one-time-withdrawal of R4,000 was allowed, ATMs in Kerala reported currency dry-up by noon. While the official version was that 70% ATMs were active, queues melted down by noon. “Our experience is that only 50% of ATMs had been filled with currency. There are not enough R500 notes or R100 notes,” says Geevarghese, who had been running from pillar to post for currency for transactions with petty traders, on his daughter’s wedding eve.

In another instance, six ATMs near Guruvayur Sreekrishna Temple, one of the richest temples in South India, (500 kg gold reserves and R1,500 crore bank deposits), are reporting to go inactive frequently. They go cashless, in two hours of filling and the officials do not have enough currency to replenish.

Kerala has 8,000-odd ATMs and of these, as many as 6,000 have been in bank premises. Even though these are active, it is the rest of the ATMs, scattered across rural or semi-rural areas, which are inactive. In the rural areas, there are ATMs that haven’t worked at all in the last 50 days.

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