Banks laden with Rs2,00,000-cr of demonetised notes, no money to disburse

Even as people of all denominations lined up to draw cash from banks and ATMs, banks across the country are reported to have collected over Rs200,000 crore (about $30 billion) in deposits in the days since 9 November.

But, with the banned bills accounting for 86 per cent of money now out of circulation, banks are now under increased pressure to replenish cash after the Rs500 and Rs1,000 notes were demonetised in a surprise move on 8 November.

ATMs ran dry a few hours after banks replenished cash of lower denominations, which were soon exhausted with people drawing all they could using all sorts of cards and in umpteen numbers.

Banks reported more than 70 million transactions through midday on 12 November, according to a finance ministry statement.

With the rush to book train and plane tickets over after announcement that refunds will not come in the form of new currency, even on Sunday, people were seen queuing up to deposit cash in hand.

However, ATMs ran empty for cash withdrawals.
Finance minister Arun Jaitley, meanwhile, said there is adequate money in the currency chests at more than 4,000 locations and these will be loaded into ATMs after re-configuration of dispensing machines will be completed within two weeks, Finance Minister Arun Jaitley said.

"A big regret is that people are getting inconvenienced, but currency replacement of this magnitude will cause some problems," Jaitley said at a press conference in New Delhi on  Saturday. "There are long, but orderly queues. Such a big currency replacement can't be done overnight."

Lenders have been caught unawares by Prime Minister Narendra Modi's unexpected announcement of the withdrawal of Rs500 and Rs1,000 notes as part of a crackdown on tax evasion and accumulation of ill-gotten wealth.

Jaitley urged people not to rush to banks immediately and wait for a few days and to conduct financial transactions using electronic transfers, checks and credit and debit cards.

State Bank of India, the country's largest, got deposits of about Rs47,868 crore, Jaitley said. It handled Rs54,370 crore of cash transactions in all, including deposits, withdrawals and exchange of banknotes, starting Thursday till 12:15 p.m. on Saturday, Jaitley said. SBI and its associates account for about 20 to 25 per cent of the nation's banking transactions, he said.

Jaitley also said, it was a deliberate policy move by the government not to reconfigure 200,000-odd ATMs beforehand as it would have only helped to leak government's moves.

The finance ministry also claimed that about 1,20,000 out of the 2,00,000 ATMs are operational, and are dispensing Rs100 rupee notes, which looked an exaggeration considering  the fact that at least in Mumbai, most of the ATMs remained cash-less on Sunday as well.