Modi’s 50-day deadline ends today, banks still facing cash shortage

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Modi’s 50-day deadline ends today, banks still facing cash shortage
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Prime Minister Narendra Modi had asked for 50 days while announcing demonetisation and the deadline ends today. However, the long queues outside banks and ATMs may not end as banks are still facing cash crunch.

As per an internal review based on feedback from banks, the supply of currency from the Reserve Bank of India (RBI) may still not be enough.

As per the officials, as the 50-day deadline on note ban comes to an end, the government is still working with banks and RBI and is trying to calm down the situation.

In a move against black money, counterfeiting and terror financing, Modi, on November 8th, announced that Rs 500 and Rs 1,000 notes would cease to be legal tender.

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Modi also assured that the hardship faced by the people due to cash crunch will be at ease by December 30th.

While data made available by banks until December 26 pointed to the cash crunch persisting, those in Bihar said they have enough notes.

"This is based on the feedback from State Level Bankers Committee (SLBC) conveners. The government is working with both banks and RBI to address these issues at the earliest,” an official told ET.

The data collated by the government also indicates that automated teller machines in most states are active and that cash is available with banking correspondents (BCs), who mostly serve rural areas.

About three-fourths of the country's 202,000 ATMs were functional while 143,000 banking correspondents had cash. Tamil Nadu had 13,000 active ATMs followed by 12,000 in Maharashtra.

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"We are ensuring through banks that BCs are functioning in rural areas and there is no cash shortage. At the same time, payments through digital means are also being popularised,” the official told ET.

However, banks in UP, Himachal Pradesh, Uttarakhand and Punjab reported cash shortage. In Himachal, banks attributed this to salary and pension payments.

In West Bengal, banks said new Rs 500 notes were in short supply along with Rs 100 notes.