City ATMs remain cashless, months after demonetisation

Even months after demonetisation, most ATMs across the city remain shut. Reserve Bank of India’s latest announcement calling off the limits on cash withdrawals from ATMs from February 1 comes at a time when half the city’s ATMs remain shut, due to the severe cash crunch. 

The scene remains the same across the city, since November 8, 2016, when demonetisation came into force. Long lines advertise the fact that the ATM in the neighbourhood is working. In many other ATMs, boards announcing ‘No Cash’ or the security guards informing irate customers on the lack of money, has become the norm. Sumita Pai, a city-based social entrepreneur, said, “I do see quite a few ATMs with the ‘no cash’ signboard. It is annoying to visit many ATMs just to withdraw cash. It is ridiculous that even months after demonetisation, the situation hasn’t improved.” 

At an ATM kiosk of a public-sector bank in Mylapore, the security person said, “The machine is working but there is no cash. The ATM was replenished a month ago but it ran out of currency quickly. During Pongal, many people,who came to withdraw money returned disappointed.”

In another government-owned bank ATM on Anna Salai, a wizened security guard said, “Even if there is money, people are wary, since they can get only the Rs 2,000 note, which is extremely difficult to change.”

A senior manager at a public-sector bank in the city said the ATMs are filled only if the banks have enough to spare, after allocating the money to the branches. “The Reserve Bank of India (RBI) gives only 25 crore per week to our bank. In Chennai, we have 75 branches. How will this cash suffice for all the branches? Thus, there isn’t enough cash to stock the ATM machines. Only when there is spare cash, after meeting the needs of the branches, the ATMs are filled. Though we have around 200 ATM machines across the city, only two have been continuously functioning, even during demonetisation. As for the other branches — it all depends on cash availability,” said the bank official. 

R Sekaran, State Secretary, All India Bank Officers’ Confederation (AIBOC), conceded that there is not enough cash to keep all the ATMs stocked. “The value of demonetised currency is Rs 15.44 lakh crore. Only 60 per cent of this amount has been replaced in the market. Naturally, this will reflect in the cash management. It may take four more months to reach 100 per cent circulation. In addition, there are not enough notes of smaller denomination. An ATM has the capacity of Rs 50 lakh. But no bank can load so much, due to the cash crunch. Most of the public-sector banks are loading anywhere between Rs 5 to 10 lakh, depending on availability,” he added. 

Over the last few months, bank employees have been alleging that the RBI is allocating more resources to the private sector banks. CP Krishnan, State Secretary, Bank Employees Federation of India (BEFI), said the situation hasn’t improved. “Public-sector and cooperative banks, which cater to 95 per cent of the population, have been allocated lesser resources than private banks. The RBI is not ready to divulge the data on the sector-wise allocation of cash. Our union is going on a nation-wide strike on February 7, demanding the government remove the existing restrictions and refrain from forcing people towards a cashless economy. We also want the government to initiate an enquiry as there is a high availability of new notes among people with better means and introduce reforms to recover non-performing assets,” he concluded.