This Article is From Dec 13, 2016

A Month After Notes Ban, How Northeast Dulled The Edge of Cash Crunch

A Month After Notes Ban, How Northeast Dulled The Edge of Cash Crunch

A month after notes bank, queues outside ATMs have noticeably shrunk in Guwahati.

Guwahati: The cash crunch that has been plaguing the rest of the country since the ban on Rs 500 and Rs 1000 notes last month already seems a thing of past in Guwahati, the biggest city of the northeast.

Queues outside ATMs have almost shrunk to nothing.

"We can see only a few people in the queue. If it is possible in Guwahati why it not in other parts of the country?" asked Amarjyoti Nath, a tourist from Delhi.

On November 8, when Prime Minister Narendra Modi announced the notes ban, one area that was supposed to suffer the most was the Northeast. But it seems most of the eight northeastern states have put it behind.

The journey, however, has not been easy, say bankers.

The Reserve Bank, they say, came up with a multi-pronged strategy to send cash quickly to the Northeast.

Notes of smaller denomination were flown to Guwahati from New Delhi and Kolkata. In remote areas across 40 districts, new 2000 and 500 rupee notes were sent to at least 40 districts by helicopters.

The mainstay of banking in the Northeast is the Rural Regional Bank. The 900-odd RRBs serve 67 per cent of account holders and they were roped in to improve situation within 10 days.

"RRBs are typically manned by local employees who mingle with the common people. This gives more impetus to their work hard in the hour of crisis," explained Samaya Nand, Chairman, Assam Gramin Vikas bank.

"65 percent of the currencies we are getting are new 2000 rupees notes and 35 percent in smaller notes and we have to manage with that," Rural Banker Banashree Saikia, told NDTV.

The RBI says there are 3,723 bank branches across Northeast -- of them only 180 have currency chests. These currency chests were asked to dispense whatever smaller notes they have - as well as coins.

Watchers believe two other factors helped: While 90 per cent of business done in northeast is in cash, but the volume is far less than metros. Plus, the pressure on banks in many tribal areas is less.

But the picture is not rosy everywhere. In Manipur, a state which has 200 bank branches and 243 ATMs, the battle for cash continues. The month-long blockade imposed by a tribal group opposed to the formation of new districts is adding to the agony.
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