It's November 30 and salaries have to be credited for millions of people across India. Along with this, pensions and other payouts also have to be done. But the cash crunch in the country is likely to hit employees' big time. December 1 is likely to see a massive rush at banks and ATMs (which are already running at 40 percent less cash) across the country. On Tuesday, most private banks in Mumbai received just about Rs 20 crore cash which is far below their daily cash requirement.
Banks are now asking companies to give their employees prepaid payment cards instead of cash. They are also looking to set internal daily cash withdrawal limits per account, states The Indian Express. As of now, the daily ATM withdrawal limits from banks is Rs 2,500 and weekly cash withdrawal limit is Rs 24,000.
A ministry official told The Indian Express, "The Finance Ministry has suggested to private companies to make salary payments to their employees digitally. It has been suggested that they should make salary payments through debit cards or prepaid cards."
Punjab Bank officials in Bengaluru (on condition of anonymity) said that that they are prepared for the payday situation. They reportedly have enough money in stock and people can come to their branch and withdraw a maximum amount of Rs 24,000. The officials said that there was chaos for no reason. They also stated they had no information as to what steps other banks were taking but they are well prepared for their customers on payday.
Many people across India have taken to digital payments and this is said to have eased some of the pressure on banks. The Indian Express quoted a Mumbai-based executive of the Catholic Syrian Bank as saying that the bank has fixed a daily cash withdrawal limit of Rs 3,000 per account.
Most ATMs and banks are dishing out Rs 2,000 notes, which is causing another issue. Since people don't have notes of smaller denominations, it is difficult to conduct transactions with these new notes.
Data published by the Reserve Bank of India (RBI) reveals that between November 10 and November 27, people withdrew Rs 2.16 lakh crore from their bank accounts and ATMs. The amount of money deposited during this period was Rs 8.11 lakh crore in old notes.
POS machines have also been set up in companies to help employees withdraw cash easily but how much this will be of help considering the withdrawal limit is the big question. Meanwhile, the RBI has doubled the limit to Rs 20,000 for prepaid wallets and cards until December 30.
Banks taking the following steps to address payday cash crunch:
1. Companies asked to give employees prepiad cash cards
2. Internal daily cash withdrawal limits set per account
3. More counters to be opened in banks
4. ATMs to be kept full