All eyes will be on Telangana and the banking sector from the moment the State government rolls out its Rythu Bandhu investment support scheme for farmers on Thursday.
From conceptualisation to implementation, various facets of the scheme are bound to be keenly observed as much as the banks’ preparedness to supply the ₹5,700 crore that is set to be disbursed under the programme.
Coming close on the heels of a cash shortage that saw people queuing up before banks and their ATMs for cash that was hard to find, the scheme is likely to test the capacity of the banks with several lakh beneficiaries expected to approach their facilities to get the cheques encashed.
“Once it is handed over to the farmers, it is expected he/she will immediately go to the bank for encashment,” Chief General Manager of State Bank of India’s Hyderabad Circle J. Swaminathan says.
Cash supply
Anticipating the huge demand for cash that the scheme is likely to trigger, the Reserve Bank of India has already started moving the first batch of ₹2,000 crore to locations across the State, sources in the Central bank said. It is also planning to supply an additional ₹1,000 crore within a week or 10 days.
“We want all these schemes to succeed... [we] cooperate with the State government,” a RBI official said, pointing out that no one should lose sight of the fact that there is a situation of scarcity. The demand for cash has always been more than what the banks were able to supply. “Our ability to supply cash to banks would depend on the production capacity,” he explained.
Phased manner
Factors that, however, are expected to work in favour of the banks is the timing of the launch — spaced away from salary and pension payment dates — and implementation of the scheme a phased manner. The banks also would get a breather two days into the scheme on account of second Saturday and Sunday. Banks also hoping that the public awareness campaign to promote digital banking would help. “We should be having an idea of the early trend” of how many farmers encash the cheque and how many would deposit it in their accounts, the RBI official said.
“We will review and see how much more currency we should make available and how quickly,” he said, adding a call on that is likely to be taken on 14th or 15th of May.
