The Reserve Bank of India has assured the government that there will be a steady improvement in the cash supply situation in the coming days. There will be enough supply to meet the pay day rush from Thursday. The new Rs. 500 currency notes will be available in larger numbers than it has been till now, it said.
Two senior Finance Ministry officials independently confirmed to The Hindu that the RBI had planned ahead for the first pay day since Prime Minister Narendra Modi announced the decision to demonetise high value currency.
“Banks have made arrangements to deal with the pay day rush. The increased supply of Rs. 500 notes should facilitate greater transactions and improve the volume of currency in circulation,” said a senior official. “More and more Rs. 500 notes will be routed through the banking system every day from December 1,” the official said.
There had been appraisals of currency demands from banks and Automated Teller Machines (ATMs), said a source. “Banks that have a larger share of salary and pension accounts may see currency disbursal 20-30% more than normal.”
The officials also said the last few weeks had revealed two kinds of currency hoarding. “The first is people hoarding currency for disbursal during the pay day week, roughly December 1 to 7, which is not a problem as that currency will return to circulation,” said an official.
The other was hoarding in currency of Rs. 100 denomination. “People have been hoarding Rs. 100 denomination notes, worried that they will get only 2,000 rupee notes from banks that they find difficult to use. The circulation of 100-rupee notes has gone up by 150 per cent since November 8 when the ban on high value notes was announced. But, this is not of great concern either since we have 50 per cent of Rs. 100 notes [ available in the market] held in reserve.”
No cash in branches: Kotak Mahindra
MUMBAI: Private sector lender Kotak Mahindra Bank said on Wednesday that its branches and automated teller machines wererunning out of cash. “The cash situation is being handled considering the stock of currency notes received from RBI and availability in the currency chest, resulting in ATMs/branches running out of cash,” the bank said in a text message to its customers. “Apologies for the inconvenience, we are doing our best,” it added.
