The situation has worsened and the states have borrowed cash from Maharashtra and Kerala and Odisha and Tamil Nadu respectively.
'No cash’ or ‘ATM down' are the signs which most ATMs in Telangana and Andhra Pradesh are bearing for the past few weeks, TOI reported. The situation has worsened and the states have borrowed cash from Maharashtra and Kerala and Odisha and Tamil Nadu respectively with the permission of RBI. Both nationalised and private banks are facing difficulty as they are not receiving adequate cash.
“With the approval of RBI we moved cash from Maharashtra and Thiruvananthapuram in Kerala to Hyderabad to tackle the situation of accelerated withdrawals from ATMs and bank branches in January and February, but did not do so in March. We usually try to ensure that cash is available in ATMs at least 94 per cent of the time. Post-demonetisation, following the cash crunch, we had taken several measures to ensure that ATMs had cash available for at least 85 per cent of the time but in January 2018, this came down to 70 per cent and is now hovering around 60 per cent,” State Bank of India’s (SBI) Hyderabad circle chief general manager Swaminathan J told TOI.
He says that post offices and treasuries, where social security pensioners take their money from, have to give Rs 290 crore for Aasara social security pension, and hence there is a shortage there too.
After the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, where people are fearing the closure of fixed deposits. In FRDI Bill 2017, the centre has proposed a ‘bail-in’ clause, which has created panic amongst people, Firstpost reported.
This clause (which is yet to be passed by the joint committee) says it protects insured depositors only. There will be a Resolution Corporation (RD) which will decide, in case the financial situation in a bank deteriorates, whether deposits could be converted into securities such as shares, according to FinancialExpress.
People are fearing that maybe the situation in banks is not good and want to now keep their money at home. Whereby PIB has released a statement that it is only going to benefit depositors and insurance cap will be raised from Rs 1 lakh after this bill is passed, people are not sure. Cash officers are disallowing any withdrawal for more than Rs 4,000 and also suggesting only RTGS and NEFT methods of transaction, a man told TOI.
Banks were disbursing cash ranging from Rs 20,000 to Rs 40,000 per day per person in their home branches when the scare had started, which led to this. Many bank customers told TOI, they have lost faith in the banking system in the wake of the proposed FRDI Bill and frauds like the PNB scam.
An aqua farmer from Kalidhindi of Krishna district, Andhra Pradesh told TOI that none of the ATMs in his district have been restored post demonetisation. “We have been forced to waiting in long queues outside banks branches to withdraw our own money. Cash officers in banks have been permitting withdrawal only of smaller amounts, below Rs 4,000 each, citing a cash crunch and have been asking us to opt for NEFT and RTGS transactions,” he said.
ATMs haven’t been working even in cities like Vizag City, which is a busy junction and has popular colonies like Dwaraka Nagar, MVP Colony, Maddilapalem, Akkayyapalem and NAD Junction, said the report.