People hoarding cash, deposits in new notes negligible, say besieged banks

Bank officials report sharp drop in deposits, say even businessmen keeping cash in lockers

Bankers in Delhi said the cash crunch has been worsened by people who are hoarding new notes.

An ATM at Defence Colony Market in New Delhi on Saturday. (Sanjeev Verma/ HT Photo)

The government had on November 29 waived withdrawal limits for new notes people deposit in their account to encourage people to deposit legal tenders in banks.

“Bankers have to face the wrath of the common public once they run out of cash. The people, however, are also to be blamed for the situation as Delhiites are not coming forward to deposit legal tenders and are also hoarding money leaving banks solely dependent on currency chest for money,” said an official from State Bank of India’s branch in Old Delhi.

Most banks are running out of cash in the national capital within a couple of hours of opening up since the past one week.

Bankers said that most people enter the banks wanting to withdraw Rs 24,000 – the maximum limit set up by RBI for withdrawal in a week.

A banker at Bank of Baroda said, “Since our banks had put a cap of Rs 10,000 since the past few days, many people come to me saying that they need cash because their relative is in hospital. We agree to give money on medical grounds but they fail to produce certificates.”

An official at the State Bank of India (SBI) branch in Central Delhi there has been drastic decline in the number of people coming forward to deposit money.

“Our bank got around Rs25 lakh deposited every day before the demonetisation which has dropped to about Rs1 lakh, that too mostly by businessmen. The average citizen is depositing not more than Rs5,000 in a day,” he added.

Another official from Bank of India said that his branch got around Rs 10,000 in the form of deposits on Saturday. “We are hardly getting cash and those who come want drafts to be made for educational purpose. I am not getting more than Rs 25,000 a day. Before November 8, we got around Rs 8 lakh daily as deposits.”

“Even the businessmen, who deal in lot of running currency, are avoiding banks and prefer to keep cash stocked in lockers,” he added.

A senior official at State Bank in Old Delhi said that the only cash the bank is getting is from business entities that are their customers and not even thousand rupees is deposited by common people. Before, demonetisation people deposited around Rs 20 lakh per day, he said.

Another official from Central Bank said that he too is not getting more than `30,000 in a day from people and most of the money is being deposited by business firms unlike pre-demonetisation period when he received around Rs3 lakh in a day.

A senior bank official said, “It is ironical that people are hoarding money fearing long queues or shortage of currency but the queue is due to people hoarding money.”

Most bankers in Delhi have introduced a cap system in order to cater to maximum number of people.

Gunjan Singh, 35, a resident of Sarita Vihar is doing most of her work through net banking, cheques or e-wallets since demonetisation was announced. The uses cash only for buying vegetables and commuting to Metro stations.

She usually spends around Rs10,000 in cash in a month but last month she did not spend more than Rs 2,500 cash. She has over Rs 60,000 cash in new currency at home which she withdrew from different accounts owned by her and her family members.