Lack of new Rs 500 notes may spark chaos in queues

TNN | Dec 3, 2016, Kolkata: With Banks still starved of the new Rs 500 notes, exasperation among people queueing up turned into anger on Friday. With bank officials pleading helplessness, trying to stretch their cash reserves to cater to more people and even introducing a "token" system, things threaten to spiral out of control over the weekend.

A private bank manager in south Kolkata said, "There is simply no cash. Whatever little we have we are trying to disburse to the maximum number of people. We are not refusing anyone, but are handing them a token and telling them we will give them a call when cash arrives, possibly on Saturday." In other branches, however, people willing to accept Rs 2,000 currency notes got the cash.

A bank official said that during this time, the withdrawal overtakes the deposit.

In State Bank of India alone, the withdrawal stands close to Rs 450 crore in Bengal on Friday, while the deposit dips close to Rs 270 crore. Overall withdrawal across all banks rose to nearly Rs 750 crore, whereas overall deposit across all banks dips to Rs 500 crore.

However, by conservative estimates, there is a demand of Rs 400-Rs 450 crore in Rs 500 notes. But the supply of currency from the Reserve Bank of India is negligible. The liquidity crunch will, therefore, last as long as the new Rs 500 currency is scarce.

Chief minister Mamata Banerjee resonated the frustration on social media. "Still no supply of Rs 500 from RBI. Only 500 ATMs in Bengal re-calibrated for Rs 500. Long queues continuing, but people not getting money."

A bank officer claimed that due to the lack of cash, majority of the ATMs remain non-operative.

"Functioning at the bank-branch level in respect to limit of withdrawing money is widely different from what the government is claiming. Branches are refusing to give cash upto the permissible limit of Rs 24,000 a week," said a man waiting in queue.

A cash management services company official said supply of new Rs 500 notes will improve in a day or two, which will help in managing the situation to a great extent.