Treasuries in the Malabar region, mainly Kannur, Kasaragod and Kozhikode, as well as those in the rural areas across the State had to bear the brunt of the currency crunch on Thursday.
Finance Department sources told The Hindu that of the 222 treasuries in the State, the State Bank of Travancore and the State Bank of India share the responsibility for providing cash in 188 treasuries, 144 and 44 respectively. The rest are being maintained by the others, mainly Canara Bank.
The Reserve Bank of India earnestly met the cash demand of the treasuries in the cities and urban centres, allegedly neglecting the rural areas.
The neglect of treasuries in northern Kerala as well as those in the rural areas has drawn flak. Cash shortage, in addition to the withdrawal curbs, have added to the woes of those who rely on the treasury for payments.
Sustaining the cash supply during the next two days will be a challenge for the Reserve Bank of India. For a vast majority of private institutions, mainly shops and commercial establishments, will be disbursing salary within the next two days.
Following complaints about private firms failing to honour their salary commitments, the Labour Department had taken the lead to route the payments through banks. Banks make the payments against the cheques issued by the employers.
This will lead to a spurt in the demand for currency and also increase the pressure on the apex bank to replenish the chests to meet the demand. If the preparedness of the RBI on the first payment day is an indication, it will not be a smooth sail in the coming days, sources said.
Since the government is not authorised to check or monitor the cash flow in banks directly, it will have to elicit information from the State-Level Bankers Committee. Finer details will be available only by the weekend.
The crunch will again force the banks to lower the withdrawal limit from Rs.24,000 and customers may have to be contented with Rs.12,000 per week, the sources said.
