Noteban Effect: Mumbai, Why Chances Of Getting Your Salary In Hand On Payday Are 50/50

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Noteban Effect: Mumbai, Why Chances Of Getting Your Salary In Hand On Payday Are 50/50

People queuing outside an ATM were asked to leave as the counter had run out of cash.

Payday has never been this depressing. Before you rush to an ATM to withdraw your salary, consider this: Your best chances of finding any cash are 50-50. For the last two days, ATMs across the country have run dry, as there simply isn't enough money to refill the cash machines. Normally, the first of the month is when ATMs are loaded with cash to meet the heavy demand on payday. The 2.3 lakh ATMs across the country are either refilled by banks or outsourced to cash logistics companies - there are only nine of these.

This time, however, the cash crunch from the demonetisation means even the banks and refilling companies don't have the money to load all ATMs.

Less than half refilled

mid-day spoke to a top official from one of the cash logistics companies, who said, "The loading of cash has dropped by over 50% across the country. We cater to nearly 20,000 ATMs all over India. Normally, we load 10,500 of these on a daily basis, with cash ranging from R3 lakh to R20 lakh. During the salary period, we would load cash in at least 12,000 ATMs for public convenience. However, in the last two days, we have managed to load cash in only 4500 ATMs. Even the volume of cash has fallen by over 50%."

Can't bank on ATMs

Another official who oversees the western region (Maharashtra, Gujarat, Madhya Pradesh, Rajasthan and Goa), said, "There are 998 ATMs in Mumbai, Thane, Navi Mumbai. We always try to ensure that these have adequate cash supply for during the salary cycle, which starts from the 28th of a month to the 10th of the following month. But this time, banks don't even have enough money to cover over-the-counter withdrawals, so from where will they give money for the ATMs?"

He recalled an incident when a bank had sent money to be refilled in the ATMs but then asked for it to be returned because the cash counters at the bank's branches had fallen short of currency.

"A nationalised bank had called our team to collect R4 crore from their cash collection point and distribute it across their ATMs. Just minutes after the loaded cash van left the place, we were instructed to return the cash, and we could not reload any of the bank's ATMs."

Usually, most of these outsourced companies stock hundreds of crores in their own vaults to make the ATM refilling process smoother. Today, however, even these vaults are empty, as they were directed to return all the cash soon after the prime minister announced the demonetisation drive. mid-day spoke to one such company that alone returned over Rs 1,000 crore from the 60 vaults they had.

When contacted, Rituraj Sinha, president of the Cash Logistics Association, preferred not to make any comment on the matter.

Slow recovery

While the demonetisation or Rs 500 and Rs 1,000 notes sucked most of the cash out of the economy, the currency crunch is being aggravated further because everybody is withdrawing but nobody is depositing the new currency.

"This means there is very little liquid cash in circulation and even less of it is reaching the banks. Add to that, the new Rs 500 notes have still not been issued in adequate numbers. It might take a month before the situation is regularised," said Udit Kariwala, an analyst from India Ratings.

He further added, "The need of the cash, however, is far more urgent in rural India, which is still a cash economy. At least in urban areas, people still have the option of going cashless."

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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