State Bank of India (SBI), which controls 15 per cent of the banking sector, said it did 95 lakh transactions, disbursing about Rs 4,600 crore all over the country, till 5 pm on Thursday.
The Reserve Bank of India (RBI) and commercial banks are making all efforts to increase the supply of cash to meet the payday rush. Banks said they are rationing cash so that it can be equitably distributed to locations where there is an increased demand.
State Bank of India (SBI), which controls 15 per cent of the banking sector, said it did 95 lakh transactions, disbursing about Rs 4,600 crore all over the country, till 5 pm on Thursday.
Manju Agarwal, Deputy Managing Director, SBI, said: "We are using analytics to determine which areas have greater demand and are diverting money to those centres." Some bankers said that they received increased supply from the RBI to meet the month-end needs of the salaried class and the pensioners. But still in many locations, it fell short of demand.
"We are ensuring equitable distribution of cash received from RBI across our branches and ATMs so that customers face minimal inconvenience," Kotak Mahindra Bank spokesperson said.
Surinder Chawla, the bank's head (branches and business banking), said: "We are geared up with extra staff to deal with the enhanced rush. We have arranged for cash from all sources and made it available to all branches sufficiently. Our m-ATMs are reaching out to as many areas as possible, allowing withdrawals in societies and offices. We are also stocking ATMs in key areas (of high salary withdrawals)."
According to rating agency Crisil, "The problem gets compounded because of a preponderance of cash transactions in the humongous informal sector, which cannot be accurately measured or monitored. Infusing replacement notes has been very sluggish and the ensuing cash choke has pulled back the business cycle, which was beginning to accelerate on the back of a good monsoon, the seventh pay commission, pay hike and One Rank, One Pension Scheme."
More than 1.25 lakh employees of the Brihanmumbai Municipal Corporation (BMC) had their salaries directly transferred into their bank accounts. No cash transactions are done by the civic administration with their employees – either permanent or on a contractual basis.
"We do not give any component in cash. The entire salary is deposited in the bank account of employees. In fact, we do not even pay our contractors in cash. They are given cheques and they then disburse the amount to the labourers. We expect that even contractors pay wages to labourers through banks," said Sudhir Naik, Deputy Municipal Commissioner (General Administration Department).
There are four currency presses -- Nashik (Maharashtra), Dewas (Madhya Pradesh), Salboni (West Bengal) and Mysuru (Karnataka). The first two are owned by the Central government through the Security Printing and Minting Corporation of India Ltd. According to the Finance ministry's latest annual report, the yearly currency printing capacity of these two presses is around 40 per cent of the total in the country. The other two are part of the Bharatiya Reserve Bank Note Mudran Pvt. Ltd (BRBNMPL), a wholly owned subsidiary of the Reserve Bank of India (RBI).
These two presses can print 16 billion notes in two shifts per year, according to the BRBNMP website. This means that the total capacity in the country would be 26.66 billion notes in two shifts. The government says that the presses are running in three shifts to meet the increased demand.
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