Vaishali, a resident of Visakhapatnam, finds herself spending more than a few hours every day travelling from ATM to ATM in search of cash. The 50-year-old recently broke her ankle and should be resting at home. Instead, she’s out on the Vizag streets searching for cash to pay off her domestic help and security guard, but in vain.
“I broke my leg few months ago, and it’s hard for me to travel from one place to another in this condition in search of an ATM with cash. When I went to the bank, even there, they gave me only Rs 6000, though I asked for a minimum of Rs. 10,000. People here have been facing a severe cash shortage for the past few months,” she says.
More than six months after demonetisation was carried out, Andhra Pradesh continues to suffer a worrisome cash shortage. The three major cities of Guntur, Vijayawada and Visakhapatnam have been the worst hit, with an overwhelming majority of ATMs still being out of cash.
“Almost 95% of the ATMs in these three cities have been out of cash for past one month, while some of ATMs have permanently shut down,” says P Venkatramaiah, General Secretary of the Bank Employee Federation of India for Andhra Pradesh and Telangana. The simple reason for this shortage, he says, is inadequate cash circulation in the state.
So severe is the situation that banks are forced to choose between keeping money in their branches or refilling ATMs.
“Customers will not blame the Reserve Bank of India for lack of money in the banks. Their blame falls directly on us. So we have decided to keep cash in the cash counter rather than in the ATMs, so that we can provide some amount of cash to customers when they reach out the banks,” says Venkatramaiah.
According to the Regional Rural Bank Employees Union of Andhra Pradesh and Telangana, there is a huge gap between the demand and supply of cash, as RBI has supplied banks in both Telugu states with only one-fourth of the total cash required.
“Several ATMs have not upgraded to the new software required for maintaining the Rs 2,000 denominations in ATMs. The ATMs still have the old Rs 1000 cassettes, which need to be upgraded and replaced. This is one of the biggest issues the banks and citizens have been facing,” Venkateshwara Reddy, General Secretary of Regional Rural Bank Employee Union told TNM.
However, says Venkatramaiah, the cash shortage is also the result of more customers holding onto their cash. As a result, cash deposits in banks have drastically fallen.
“As people are holding more and more liquid cash, cash deposits in the banks have come down by 65% in Visakhapatnam alone. This has affected the cash circulation in the market,” he says.