Amid long queues at bank branches and automated teller machines (ATMs) running out of cash, the Reserve Bank of India (RBI) has urged citizens to switch to alternative modes of payments such as such as pre-paid cards, credit and debit cards, mobile banking, and Internet banking.
“Such usage will alleviate the pressure on the physical currency and also enhance the experience of living in the digital world,” it said in a release on Saturday.
The government, on November 8, canceled the legal tender status of existing currency notes of Rs.500 and Rs.1,000 denomination. Such notes can be exchanged at bank branches and post offices till December 30.
Following this, ATMs were closed for two days. Each and every ATM in the country (estimated to be number more than two lakhs) had to be re-calibrated in those 2 days so that they did not dispense any 500 or 1,000 rupee notes.
ATMs, restarted on Friday, were only disbursing 100 rupee notes. A few of the, however, are also disbursing Rs 50 notes. A new 2,000 rupee denomination note has been issued but that is only available in bank branches.
Further, each ATM needs to be re-calibrated so that the new 500 and 1,000 rupee denomination notes, which are of smaller size, fit into it.
RBI admitted that it was a huge responsibility for the banking system to swiftly withdraw those notes in a smooth and non-disruptive way.
“It entailed swift withdrawal of specified bank notes from the ATMs within a few hours of the announcement, re-calibrating these for issuance of other legal tender notes, reloading them in a matter of two days and providing the exchange facility for members of public at all bank branches all over the country, just a day after the announcement,” it said.
Bankers said the new 500 and 1,000 rupee notes as and when they came into circulation would be initially dispensed by bank branches. Re-calibrating them for the ATMs would take some time, they added.
The central bank maintained that adequate stocks of notes were kept ready in currency chests located at more than 4,000 places across the country.
Even as efforts are on for a smoother exchange of currencies, the RBI asserted that a detailed reporting system for banks had been put in place to track the exchange of 500 and 1,000 currency notes. The RBI said it was also closely monitoring the situation to prevent any misuse of the facility.
“With a view to preventing misuse of the facility, the authorities are closely monitoring the information received through these reports about exchange and deposits of the specified bank notes by the public with the banks, including co-operative banks,” the RBI said.