Tuesday , 21 May 2019

Learning Not To Expect Small Notes From ATMs

A YEAR and a half after demonetization, Goans, much like people in other states, are still facing problems in withdrawing cash of desired denominations through ATMs (automated teller machines). Most ATMs have been calibrated for issuing Rs 2,000 and Rs 500 denominations. However, banks are yet to calibrate the cash dispensing machines for issuing Rs 200 and Rs 50 notes. Even the old Rs 100 notes, which are being dispensed through ATMs, are difficult to get, though there is no apparent shortage of currency notes as the old notes continue to be in circulation. The Rs 200 notes came into circulation in August last and still remain unavailable through ATMs. New Rs 50 notes were issued sixteen months ago, but no ATM machine in the state is dispensing new Rs 50 notes or old Rs 50 notes, which still continue to be legal tender. Non-availability of Rs 50, Rs 100 and Rs 200 notes through ATMs is affecting low income persons, especially holders of Pradhan Mantri Jan Dhan accounts, making a mockery of the scheme as they are forced to draw amounts in excess of their needs.

As for the Rs 200 note, it is a rarity to get one even at bank counters in the state. Dispensation of Rs 100 note is erratic. The reasons remain mysterious. Though officials of a leading bank claimed that their 150 ATMs have been calibrated for issue of Rs 200 notes, hardly does any customer get them. Officials of other banks assure us that the process for recalibration of ATMs was under way and would be completed soon. However, new Rs 50 notes might not be available through ATMs even after recalibration. Banks blame the agencies, to whom they have outsourced operations of their ATMs, for delay in calibration. It is intriguing to note why the central government and the Reserve Bank of India have taken so long to help the banks recalibrate ATMs for dispensing Rs 200 notes. Only a fifth of the 2.21 lakh ATMs in the country have been reconfigured and are able to dispense notes of Rs 200, but nothing has been done to make Rs 50 notes available through ATMs.

Often, ATMs dispense notes of Rs 2,000 and Rs 500 only. In the preceding months, Rs 2,000 notes were in short supply and only Rs 500 notes were being dispensed by ATMs in the state. It is only now that ATMs are delivering Rs 2,000 notes. But a balance in dispensation of various denominations through ATMs is still missing. The ATMS either pour out Rs 2,000 rupee notes or Rs 500 rupee notes for the entire amount entered by the customer.

There is another lingering problem. Post demonetization, the government had given a big push to cashless transactions. However, many shopkeepers, retailers and other small businessmen in Goa insist on cash payments. Some threaten to charge the vendor’s commission from them if they insist on cashless payment. In bigger shops or supermarkets, the customers who make cash payments using bigger currency notes are frequently made to wait for the change as they often run out of change. It is surprising to note that when the government has been claiming to have pumped in enough notes of different denominations people are facing shortage of small denomination notes. The absence of Rs 1,000 notes is adding to the confusion as a large number of notes in change have to be given out to customers who pay with Rs 2,000 notes. The government claims to have printed thousands of crores of Rs 500 notes and brought them in circulation but their numbers are obviously inadequate for meeting the demand.

With the monsoon and school season expected to arrive soon, the central government and the RBI need to make their promises look concrete and real. They have a responsibility to ensure people get enough cash to meet their requirements. Why are ATMs being designed only with four sachets, restricting their calibration for holding only Rs 2,000, Rs 500, Rs 200 and Rs 100 notes? Why could not there be a fifth sachet for Rs 50 notes? That would have made Prime Minister Narendra Modi’s plan to bring the poorest of the poor in the banking system look more sincere. As people, poor or rich, looking for Rs 50 notes would get them only at the bank counters, the banks should have adequate supply of it. With shopkeepers insisting on cash payments, it appears that the drive for cashless transactions has lost steam. The Modi government needs to probe the reasons and introduce new measures to give a new push to cashless transaction.