Thanks to the acute cash crunch in banks, there is a delay in disbursal of crop loans for the ensuing kharif season.
The reason ascribed for this is the drying up of cash reserves in banks owing to the dismal quantum of remittances against huge withdrawals by customers which is an impact of demonetisation, especially after the cap on cash withdrawals was lifted in mid March.
The Telangana Grameena Bank (TGB) which tops the list of banks in terms of quantum of money disbursed as crop loans in Adilabad and neighbouring districts has not started loaning. Normally it starts advancing money to farmers at the beginning of April.
The release of ₹ 6 crore from its bank chest on Monday was no consolation for the TGB Adilabad region because it meant that only about ₹ 8 lakh will be disbursed for each of its 72 branches.
“Every branch has a target disbursal of ₹ 10 crore or ₹ 20 crore as crop loans and such amounts are of no help,” lamented an officer.
According to bankers, further delay could have a disastrous consequences on agriculture sector. The district has a tentative crop loan target of ₹ 1,124 crore for the current financial year which is ₹ 282 crore more than last year’s target.
No cash to replenish
The phenomenon has also affected cash disposal through ATMs. Many of the ATMs in Adilabad and neighbouring districts have remained closed for days on end as cash could not be replenished in them.
The pathetic situation of banks can be gauged from availability of cash in the local chest branch, the SBI Shivaji Chowk branch. Against a cash holding capacity of over ₹ 275 crore, the bank has not more than ₹ 10 crore on any given day since mid March.
The bank receives only ₹ 40 lakh to ₹ 50 lakh every day by way of remittances from the RTC, Railways and petrol bunks and government deposits while the outflow of cash is to the tune of ₹ 2 crore, according to sources.
The total outflow during the month-long period is in excess of ₹ 50 crore which constitutes a major chunk of the bank’s cash transaction lopsidedness.
Similarly, the Telangana Grameena Bank, main branch which is a major crop loan disbursal unit in the town, has about ₹ 5 crore in cash as outflow.
It pays ₹ 25 lakh per day to its customers while receives remittances to the tune of about ₹ 7 lakh, much of it from the self help groups.
Stock cash at home
“The demonetisation experience has bank customers stash cash at home rather than keep it in their accounts,” pointed out a senior banking official.
“We are not able to replenish ATMs because of this and have restricted quantum of payments too,” he added on the current situation in all banks.
