Demonetisation: Cash crunch eases, curbs on ATM withdrawals may go by month-end
Cash supply to ATMs was expected to normalise by month-end and the Reserve Bank of India, which was monitoring the situation, could ease withdrawal restrictions, sources said.
ATMs were getting around Rs 9,000 crore a day against Rs 2-3,000 crore in the early days of demonetisation, sources in banking sector said.
“The cash situation has improved. The RBI is monitoring (situation) closely and a decision on withdrawal limits will be taken keeping in mind all parameters,” a government official, who did not wish to be identified, said.
Prior to November 8, the day Prime Minister Narendra Modi announced scrapping of Rs 500 and Rs 1,000 banknotes, around Rs 13,000 crore was fed daily into the country’s 220,000 ATMs.
Though cash situation is better, queues can still be seen outside several ATM kiosks, primarily due to withdrawal restrictions — Rs 4,500 per day and Rs 24,000 a week.
“Same set of people are queuing up daily due to withdrawal restrictions and therefore the rush at ATMs is still continuing, especially in the metros,” a private bank official said.
Compared to 125 daily transactions before November 8, an ATM was now recording 300 footfalls a day, sources said. But, it was an improvement on 800 a day in the months of November and December.
“Situation (at ATMs) is now near-normal in relation to ATM replenishment and the amount of money being injected into these machines,” Cash Logistics Association president Rituraj Sinha said. Cash Logistics refills cash and also manages ATMs.
The central bank on January 1 increased the daily withdrawal limit to Rs 4,500 from Rs 2,500 but kept the weekly restriction of Rs 24,000. A customer can withdraw Rs 24,000 from a bank branch at one go but the weekly limit stays.
The surprise decision to recall the two-high vale notes that accounted for 86% of the money in circulation triggered a huge cash crunch. A majority of ATMs ran dry for weeks as cash was in short supply and the machines had to be recalibrated to dispense the new Rs 2,000 and Rs 500 notes.
At present, more than 110,000 ATMs are getting cash every day compared to only 30-40,000 a month ago. Typically, around 130,000 ATMs are loaded daily.