In India, the total currency in circulation has been reported to be Rs 17 lakh crore and about 80 percent of that money is in high-value currency amounting to more than Rs 13 lakh crore which the banks will have to withdraw from the people and that can be a truly hectic affair.
In India, the total currency in circulation has been reported to be Rs 17 lakh crore and about 80 percent of that money is in high-value currency amounting to more than Rs 13 lakh crore which the banks will have to withdraw from the people and that can be a truly hectic affair. The banks are making plans on how to handle such cash inflows that will come into the branches this week. The plans include note counting machines, while SBI is even planning to use its big network of cash deposit machines in order to handle the deposits, TOI reported. But the ultimate fear is the ability to handle ATMs, as people are expected to throng the machines when the Rs 100 and Rs 50 notes will be available as they are the only legal tender available. But there are 2 lakh fifteen thousand ATMs in India and fewer than 10,000 vans which can have cash protected by armed guards. This can cause a big issue in refilling the ATMs with cash until the Rs 2000 notes are printed at least.
Mani Mamallan, founder &MD of Electronic Payment and Services which manages ATMs for many public sector banks told TOI, “There is a large stash of Rs 100 and Rs 50 notes with RBI. However, low-value notes would mean an increase in the number of transactions.” Executives at ICICI Bank, HDFC and Axis Bank also told TOI that they were planning to freeze the ATM network at 11.55 PM. Generally, the daily cash limits, are reset at 11:50 PM. Today the banks will freeze the network and alerted switch operators. The companies responsible for refilling cash have been to by a few banks to return cash loads at particular branches to be open at night.
An HDFC Bank executive told TOI, “We have to reconfigure our systems. If you notice the average ATM dispensation slot — it is about 34th of an inch. Now per transaction, if a person were to withdraw Rs 10,000, the ATM will not be able to push out 1000 notes of Rs 100 denomination at one go.ATM transaction limits will have to be set much lower.” Another ICICI top official added, “About Rs 25,000 crore is in circulation in India in the ATM network now only 30% of that is Rs 100 denominations. More than 50% of notes disbursed are in Rs 500 denominations and the remainder in Rs 1,000 notes. It will be a logistical problem to handle the per day ATM cash needs of India for some time going forward. We are awaiting RBI’s response.”