It’s post-demonetisation scenario at the ATMs and the teller counters in the city in the last two months. If one were to draw a sizeable amount, he or she is being requested to take a part of it with a promise that the balance could be taken after a couple of days.
The scene is so bad that even if cash is available during some part of the day, the machines have stopped accepting the debit and the credit cards of other banks.
This has been the scene across the State too in contrast to the rest of the country. There is no such issue say in Odisha, Tamil Nadu or Chhattisgarh, says Venkateshwara Rao, a former banker who is now into business.
Why is the scene so bad in AP? Bankers cite a few reasons for it.
Primarily, the proposed Financial Resolution and Deposit Insurance (FRDI) Bill has created a sense of uncertainty among the account holders, especially among the middle class customers, who form the base clientele for any bank.
The Bill triggered panic withdrawal resulting in heavy drop in the deposits. “We have been trying to reason with them in vain that the Bill is still in the proposal stage and there is no likelihood of its implementation in the near future,” says Srinivasa Rao of the SBI.
Second is the mismatch between the remittances and the withdrawals upsetting the cash flow at the Currency Administration Branch (CAB).
“The remittances from banks have come down drastically and hence the flow to the chests of various banks has also gone down. We have to depend on the flow from the RBI or manage with diversion funds,” says a senior manager of the SBI.
The main reason plaguing the sector however is accumulation of black money in the realty sector.
The difference between government registration value and the market price is exceptionally high in the State — more than two to three times.
The government or document value of one sq of land in Muralinagar in Visakhapatnam is around ₹24,000 and the market price is over ₹60,000. One can pay the document price in white but the balance has to be paid in black.
After demonetisation, routing black money through bank even through shell companies and benamis has become difficult. So people withdraw money in phases (up to ₹2 lakh no questions asked) and keep at home, says a former banker.
Amaravati factor
Chunks of land are being sold in the CRDA region in Amaravati at an exorbitant rate and the funds are flowing from across the State. “The farmers, whose land has been acquired by the government under the land pooling scheme, are now selling what they have got in exchange. While the official document rate is around ₹6,000 to ₹7,000 per sq yd, it is being sold at ₹15,000 to 32,000, depending on the proximity to the CRDA. We are meeting the need by stopping deposits and accumulating money through withdrawals through a chain of friends and relatives,” says a realtor who recently purchased a few plots in Amaravati.
