Approaching a week since the demonetisation that voided Rs. 1,000 and Rs. 500 notes, a cash-strapped city continued to witness serpentine queues outside banks, dysfunctional ATMs and acute shortage of currency stocks across many banks.
Since morning, people thronged banks to make deposits, exchange old currency or withdraw money for basic expenses. Even withdrawing a minimal amount with debit cards proved futile as several ATMs displayed ‘No Cash’ signs while others were open only for making deposits.
Bank officials estimate that less than half of the ATMs in the city are not operational as they are yet to be recalibrated to dispense the new Rs. 2,000 notes and lower denomination notes.
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“We are facing a shortage of lower denomination currency. Things would have been far smoother had adequate low denomination notes been made available prior to the demonetisation,” said an officer at a private bank.
Another problem that the banks are facing is the rapid depletion of cash reserves at ATMs. And, though the Government had revised the cap on withdrawals from ATMs to Rs. 2,500 a day, in reality, machines are equipped to disburse only in Rs. 2,000 denomination. Also, the Rs. 500 notes which the Centre has released are yet to be made available at banks and ATMs, a banker said.
Bankers expect the constitution of a Task Force by the Reserve Bank of India for recalibration to ease the situation. The exercise involves ATM manufacturers, National Payments Corporation of India and banks.
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Meanwhile, the squeeze on currency has derailed business, traders complain. “Since there is limited cash, nearly 70 per cent of the market transactions have been hit,” estimates M. Sivasankaran, President of Puducherry Traders Federation.
"The demonetisation of Rs 500 and Rs 1000 currency has severely affected the wholesale and retail trade in Puducherry. This move is expected to impact the revenue from sales tax next month, which is considered to be a major source of income to the Government,” he said.
He added that due to limited cash, traders had requested the suppliers to hold the post-dated cheques they had given them. A restaurant owner said business had come down drastically and they were unable to pay daily wages to their employees. “We have stopped Rs. 1,000 and Rs. 500 denominations because we are unable to purchase goods with the invalidated currency. The flow of customers has also come down and the products already purchased are stagnating,” said Mohammed Nizam, owner of Hotel Bilal.
Government hospitals continue to accept denominations of Rs. 500 and Rs. 1,000 from patients. An official of the Indira Gandhi Government General Hospital said they have not faced difficulties so far as most of the payments were in smaller denomination. “We are able to deposit the cash in the banks without any hassle,” he said.
However, most of the private hospitals have stopped accepting Rs. 500 and Rs. 1,000, instead opting for card transactions only. A spokesperson of a private hospital said that they were facing practical difficulties, especially when people who do not have cards have to undergo surgeries. If there is a specific order passed by the Government directing the hospitals to accept the old currencies, we would be in a better position to serve the people, he said.
JIPMER, another refuge of the poor, which offers free treatment, has restricted its reserves of low denomination currencies of Rs. 10, 20, 50 and 100 to facilitate patient transactions for diagnosis or other expenditure.
Meanwhile, the Puducherry Pradesh Congress Committee (PCC) has dubbed the demonetisation “hasty and faulty”, saying it has caused untold hardship for the common man and small traders.
(With additional reporting by Rajesh B. Nair)