This Article is From Apr 05, 2017

Kerala's Big Cash Crunch: ATMs, Salaries and Pensions Are Hit

Kerala's Big Cash Crunch: ATMs, Salaries and Pensions Are Hit

Kerala government says the state is facing a cash crunch due to inadequate supply of currency notes.

THIRUVANANTHAPURAM: It is the beginning of the month and people are looking to collect their salaries and pensions across the country. But in Kerala, most people can't withdraw their money due to a cash crunch that has returned to haunt the state where many ATMs of the country's largest bank, SBI, are not dispensing cash.

The Kerala government on Tuesday conceded that the cash crisis had hit the treasury too; it has the money but not the currency notes needed to pay people their salaries or pensions. If the central bank does not step in, Finance Minister TM Thomas Isaac warned, disbursal of salaries and pensions could be hit. The Reserve Bank of India has not supplied enough currency notes, he said, laying the blame for the severe crisis facing the state at the central bank's doors.

Kerala's crisis comes months after Prime Minister Narendra Modi's surprise announcement on November 8 last year banning Rs 500 and Rs 1,000-denomination notes triggered a severe cash crisis across the country. Millions of people had to spend hours in queues at banks and ATMs to exchange, or withdraw currency notes. The decision had yanked off 86 per cent of the total currency in circulation.

Last month, RBI Deputy Governor Viral Acharya had announced that the process to replace the currency notes pulled out due to the notes ban decision would take a couple of more months. According to the central bank's statistics, the currency in circulation towards the end of March had reached Rs 13.12 lakh crore as against Rs 16.63 lakh crore a year earlier.

But for the group of women pensioners who had been queuing up outside Kerala's state treasuries, these numbers meant little.

"We have been waiting since morning and it's been several hours. The treasury officials say they have not been able to get adequate currency notes," said a group of women pensioners in the port city of Kochi.

In the state capital Thiruvananthapuram, Mr Isaac conceded that several treasuries just did not have the cash. He lamented that the crisis had returned at a time when the state government was getting ready to disburse three months welfare pension arrears in view of Vishu and Easter festivals.

The government would transfer the funds for distribution of welfare pension to the cooperative banks, there is realisation that it may meant little for the beneficiaries if they do not get access to hard cash. A PTI report said the worst-affected were people who draw money from ATMs of State Bank of India or its subsidiaries.

"There is a limit to putting people to trouble," said a working woman, pointing that she hadn't been able to withdraw her salary for the past two days. "I have been visiting numerous SBI ATMs. If there is no currency, why can't they put a board, stating that there is no currency," she added.

(With inputs from IANS and PTI)
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