The weeks-old cash crunch that forced bank customers to spend more time waiting in queues to withdraw money, either from the branches or automated teller machines (ATMs), is finally showing signs of improvement with banks augmenting cash supplies.
Increased availability has also helped in slowing down accelerated withdrawals, a term bankers use to describe panic reaction of customers during times of stress on cash availability. “As we enter the last week of the month, the pressure on ATMs is also expected to be less,” a senior banker said.
“The feedback we are getting is that the ground situation has improved and ATM uptime has also significantly gone up in the past few days,” sources in Reserve Bank of India (RBI) said. With an eye on reducing the queue at ATMs, the RBI as well as State Bank of India (SBI) pumped in more cash in recent weeks.
On Saturday, RBI issued ₹500 crore from its vaults to the twin cities of Hyderabad and Secunderabad. This followed about ₹1,500 crore it had supplied earlier in the week, said sources.
In addition, the SBI “brought good amount of cash from a few surplus States. We even airlifted cash,” CGM, Hyderabad Circle, J. Swaminathan said, adding once the availability starts improving, the accelerated withdrawals are bound to come down. A lot, however, would depend on how much cash the banks can continue to infuse.
Another challenge for the banks is in carrying forward their effort into the next month. “As we approach end of the month, it is quite likely for the cash demand to go up,” said banking industry sources, referring to the enhanced requirement once salaries and pensions are credited.
The emphasis of the banks would be on maintaining the supplies because when cash is available at the banks and ATMs, it influences the behavioural pattern of customers. “They may not be as desperate to withdraw cash as they would when they don’t see cash in the facilities,” a central banker said.
As regards the ATMs, Mr. Swaminathan said nearly 80% of the 8,500-odd facilities across the State on Monday were dispensing cash. Noting that the situation was being monitored twice a day by the Cash Management Committee of the banks, he said the numbers were a notch higher for SBI, which accounted for 25% of the ATMs.
For internal benchmark purpose, 90% uptime is considered good for ATM and 94% excellent. “We are now at 85%, very close to normalcy,” he said, pointing out that even otherwise it is not uncommon to find 700-800 facilities down on account of technical issues. “Eight to 10% of the machines are down for reasons other than that attributable to cash on any given day,” he said.
In Telangana, SBI has 2,200 ATMs, Andhra Bank and ICICI have 1100 ATMs each and HDFC around 900. The uptime is a significant improvement compared to about 10 days ago when the ATM availability had gone down below a dangerously low 50%, including in cities like Hyderabad, he said.
RBI, which had met bankers last week, intends to have another meeting towards the end of next week.
