Cash supply to banks up by 50% as RBI steps up printing of currency
A State Bank of India executive said they had seen a 50% increase in cash supply in the last three days, which coincides with payday that has brought back long queues at banks and ATMs.
Cash supply to banks has gone up by 40-50% in the last few days compared to the first two weeks of demonetisation, sources said, as banks battle a limited supply of Rs 500 notes, poor circulation of Rs 2,000 bills and payday.
The Reserve Bank of India has stepped up printing of currency, both old and new, and has assured greater availability of the new currency notes than the previous weeks.
A State Bank of India (SBI) executive said they had seen a 50% increase in cash supply in the last three days, which coincides with payday that has brought back long queues at banks and ATMs.
“The demand has risen in the last two days because of the need to make more payments by households and smaller businessmen given the salary days. The utility of Rs 2000 currency notes is still less because of the short supply of Rs 500 notes,” he said.
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The RBI printed large quantities of 2,000-rupee notes but those aren’t circulating much in absence of smaller bills, especially the Rs 100 note.
Reports say the central bank is now focused in printing the Rs 500 bill, the use of which had become as common as the ubiquitous 100-rupee note.
So far, the SBI had met about 60% of its customers’ demand though RBI had stepped up the supply but the bank’s requirement was huge, he said.
According to RBI sources, the central bank was pumping in more cash and more frequently.
Bank chiefs of two smaller banks, who didn’t wish to be named, said they were getting money more regularly compared to a week ago. But both were worried about the shortage and said it would take more than a week for things to settle down.
Some banks are getting additional staff to manage the distribution through mobile ATMs to handle the salary rush.
HDFC Bank, the country’s second biggest private lender, has allowed its customers to withdraw cash from point of sale machines though 50 chains of stores in across all Metros.
Surinder Chawla head, geography, branch and business banking, at RBL Bank, said, “Our branches have been geared up with extra staff to deal with enhanced rush due to salary day. We have arranged for cash, as much as was available from all possible sources and made it available in all our branches in sufficient values.”
The government’s November 8 decision to scrap Rs 500 and Rs 1,000 notes sucked out 86% of the currency in circulation, leading to huge currency shortage.