Over the past few weeks, bank customers are experiencing unusual cash crunch as they are unable to withdraw money from their account and many ATMs have the ‘No Cash’ signboards. This cash crunch is caused only due to negligence of Reserve Bank of India (RBI) and has left bank employees to face countless problems along with the wrath and anger of customers for no fault on their part. Owing to these issues, the Reserve Bank Governor should resign, demands a bank employee union.
In a statement, CH Venkatachalam, General Secretary of All India Bank Employees’ Association (AIBEA), says, “The RBI Governor made a statement that there is adequate printing of currency notes. Then where the currency notes have gone? Are they not to investigate? Why they cannot ensure that Banks have enough cash to meet requirements of customers. RBI has increasingly becoming irrelevant because they are becoming an appendage of the Government not enforcing their independent powers. In issue after issue, RBI is founding wanting. It is high time that the present RBI Governor owns up this mess and resigns or he should be removed. RBI is grossly negligent.”
According to AIBEA, ATMs of several banks are not yet re-calibrated for newly designed currency notes even 16 months after the Demonetisation. This adds to the problem of shortage and inability of customers to withdraw money from ATMs, it says.
The supply and demand of currency notes is taken into consideration by the RBI in order to control the money supply in the economy. “But within the decided quantum of money supply, when more number of Rs2,000 Notes is printed, there is a natural shortage of small denomination notes line Rs50, Rs100 and Rs200, which are most needed. Rs2,000 notes constitute bulk of currency supply and hence there is shortage of notes of small denominations,” Mr Venkatachalam added.
He says, “Our country is still facing, the inadequate supply of currency notes by RBI due to the Bharatiya Janata Party (BJP) government’s decision on demonetisation, which itself is under question. The problem has become very acute in many states where bank branches and ATMs do not have sufficient cash due to the short supply of cash to make cater to withdrawals by customers.”
According to AIBEA, the government is trying to drive their agenda of digital banking forward instead of cash banking. “There is a probability that the Government is deliberately printing less currency notes so that people will be forced to resort to digital banking,” it says.
Mr Venkatachalam feels that the Government’s decision to introduce Financial Resolution and Deposit Insurance (FDRI) Bill in the Parliament adds to ever-increasing cash crunch faced by the banks. FDRI Bill contains a bail-in clause by which Government can utilise the public deposits of customers in the banks to offset the losses of Banks. He says, “With the recent increase in bad loans and frequent frauds in Banks like Nirav Modi, Rotamac and Videocon, in Punjab National Bank (PNB), ICICI Bank and other banks have left the customers in fear of losing their money causing them to withdraw cash and keep it idle at home. This adds up to the cash crunch and thus the government should immediately announce the withdrawal of FDRI Bill.”
“With huge bad loans in the Banks and the loan default by big corporate companies, the customers are worried about the big frauds taking place in Banks and now this currency note shortage is creating further doubts in their mind whether all is well with the Banks. These fears should be dismissed by the RBI and the Government itself. With the coming up of the elections in Karnataka, the public suspects that the cash from Banks are finding their way there. These doubts should be cleared by the Government,” he added.
AIBEA says it has taken up the matter with RBI and Finance Ministry to ensure immediate supply of adequate currency notes to all Banks in all States. “Mere Statements (from the RBI) will not help. Concrete action is needed. If timely and immediate action is not taken to improve supply of currency notes, AIBEA will be compelled to ventilate the anger and agony of the banking public through agitations,” Mr Venkatachalam, the General Secretary of the bank employees’ union warned.