Rs 2000 notes not good for exchange, cash crunch may normalise by February end, says SBI chief Arundhati Bhattacharya

Even as 50 days have passed since the announcement of demonetisation by Prime Minister Narendra Modi on November 8, cash crunch continues as only 35-40% of the 2.2 lakh ATMs in the country are dispensing cash, according to leading deployers. What has increased woes of many people is the fact that most of the ATMs are dispensing only Rs 2000 notes. Moreover, banks are yet to start over-the-counter payments in Rs 500 notes properly. Reason: The number of Rs 500 notes available is very less and it would take more time for the situation to normalise.

According to State Bank of India chief Arundhati Bhattacharya, the cash situation in the country may normalise by the end of February as the number of Rs 500 notes would exceed the Rs 2000 notes by then. Bhattacharya said this in an interview to CNN-News 18.

Bhattacharya also said the new Rs 2000 banknote is not a “good mode of exchange” as it constrains people from transacting freely. Bhattacharya further said SBI would start handing over Rs 500 notes from bank counters to customers soon. Moreover, ATMs are also being filled up with Rs 500 notes, she added.

Prime Minister Narendra Modi announced the decision to demonetise old Rs 500 and Rs 1000 currency notes on November 8. The PM had also appealed to people to bear the “pain” for 50 days and things would start becoming normal after that.

However, even after 50 days, not all ATMs are fully functional. “Around 37 per cent of FIS’ 12,000 ATMs are dispensing cash. The country numbers are also in the range of 35-40%. (Lack of) cash availability in the right denominations is the main reason for ATMs not working,” Ramaswamy Venkatachalam, managing director, India and South Asia of Fidelity Information Services (FIS), told The Indian Express.

“If we are raising an indent of say Rs 100 crore for ATMs, we are only getting one-third of it from the banks. This has affected the functioning of the ATMs in the country,” said Navroz Dastur, managing director, NCR Corporation, India & South Asia, a leading ATM deployer with a market share of 47%.

Meanwhile, the government is pushing digital, cashless economy agenda in a bid to make the economy transparent and reduce people’s dependence on cash.

State Bank of India