Even four months after demonetization of high value notes, people in Hyderabad are facing shortage of cash in banks and ATMs across the city over the past two days, with nearly 65% of the ATMs devoid of cash.
With the Reserve Bank of India providing only one-fourth of the total cash required by ATMs, most of them in Telangana are running dry.
“The main problem is that Hyderabad alone needs nearly Rs.4000 crore, but the banks have received only Rs.1000 crore. Even though RBI has lifted the withdrawal limit, banks do not have enough cash to give their customers,” says S Venkateshwara Reddy, General Secretary of Regional Rural Bank Employee Union.
He says, because of the elections in North India, most of the cash has been diverted to Northern states, which has affected the southern part of the country, especially Telangana and Andhra Pradesh.
“The Central government has been pushing for digital India, so this situation is not going to improve for the next few years,” claimed BS Rambabu, national secretary of All India Bank Employee Association and General secretary of Telangana and AP Bank Employee Association.
Even the Bank Employee Union has claimed that the situation is not going to improve in the next few years.
The last weekend was hard for the citizens of Hyderabad, as many were unable to withdraw their salary.
“This has also increased the rush in several banks. Fifteen days ago, 95% of the ATMs in the city were out of cash. Now, the government has plans to reduce the number of ATMs to prepare people for more online transactions,” Rambabu adds.
One of the reasons for shortage of cash in Telangana he cited was, less circulation of Rs 500 and Rs 2000 notes in the market.
“There is a need of 15.5 lakh crore worth notes to be printed but the government has printed only 10.5 lakh crore worth notes, so there is a shortage of cash in the market. Also people are withdrawing cash, but not depositing enough money back into the bank,” he says.
He explains that nearly Rs.40,000 crore worth Rs.2,000 notes and Rs.10,000 crore worth Rs.500 notes are not circulating in the market in both the Telugu states.
During demonetisation, the main problem which ATMs faced was a change in software. The cassettes in which notes are kept also needed to be repaired and replaced.
“In an ATM, there are two cassettes or boxes for Rs.1000 notes inside, and one cassette each for Rs.500 and Rs.100. To change the software and cassettes, the software vendors had to work on nearly 18,000 ATMs in both the Telugu states, and nearly 4000 ATMs in Hyderabad alone. For doing this work, they were not paid any money. The banks say this should be paid by the government, while the government has put the onus on the banks. So now, because of this logjam, the software vendors have refused to work on many of the ATMs which are out of order or those that need any software update. This is also another reason why some of the ATMs are permanently shutting down in the city,” Rambabu says.
“This will last for nearly two more years. People will face problems but eventually they will have to adapt to online transactions,” he says.