The Prime Minister’s office assured bankers on Thursday that it will increase the supply of currency notes to tide over an acute cash shortage.
“There is a demand-supply mismatch, which was communicated to the government,” said a banker who participated in a videoconference chaired by the cabinet secretary. The call was attended by the chief executives of all the banks as well as chief secretaries of various states. Reserve Bank of India (RBI) and other government officials were also present on the call.
The Centre has assured that cash would be airlifted, if necessary, so that it reached currency chests in time, the banker said.
According to other officials present in the meeting, the central bank and some large public sector bank chiefs raised the issue that bank branches were facing a shortage of cash.
The RBI said there was no reason for panic. “There is a sufficient supply of notes consequent upon increased production which started nearly two months ago. Members of the public are requested not to panic or hoard currency notes,” according to a central bank statement.
Currency notes are distributed to bank branches from the 4,000-odd currency chests in the country - of which, more than 2,600 are owned by the State Bank of India and its associate banks.
Chief executives of some smaller private sector banks raised the issue that cash distribution was ‘lop sided’ in favour of large banks. Many small lenders do not have their own currency chests and have to depend on other banks for supply of cash.
ATM recalibrationThe recalibration of automated teller machines that started on Thursday is also taking time, bankers said. The ATM task force, which was set up to quicken the process, had asked banks to recalibrate 12,500 machines per day. “Not many ATMs were recalibrated in the first two days. But we expect activation to gain momentum,” said a chief executive of a public sector bank on condition of anonymity..
