New Delhi: Payday chaos is expected to hit banks across the country from Thursday. The banks are bracing themselves to face a huge payday rush as people are likely to line up to take out money after their salaries are paid for their monthly expenses. It is predicted that the chaos may last at least up to a week.
The All India Bank Employees’ Association (AIBEA) on Wednesday warned that if the Reserve Bank fails to provide adequate cash in view of the salary rush, it may lead to serious law and order issues.
Sources said RBI officials have assured the finance ministry that it has made ample preparations to deal with the payday rush. RBI and finance ministry teams are now closely watching the situation round the clock. The banks are expecting a cash crunch to last for at least five to six days due to the payday rush as people take out cash for their requirements. People urgently need cash to pay their domestic helps, drivers and grocery bills, among others, at the start of every month. The RBI has made arrangements to see that the cash crunch is not severe and the banks are able to cope with the demand, the sources said. The RBI is likely to disburse 25-30 per cent more cash to the banks from Wednesday night.
This, however, may not be enough in case the rush is a lot more than expected. The central bank has said it is taking all steps to increase the circulation of Rs 100 notes and new Rs 500 notes and that the printing presses are working at full capacity. “Banks have been asked to employ more people to deal with the rush so people don’t face difficulties,” a senior government official said. He said the banks had also urged all big companies to electronically transfer the salaries into the accounts of their employees. “The banks have relaxed the charges for many electronic transfers like debit cards, and we request people to use these and go in for cashless transactions,” the official added.
In case there is an unexpected rush, the banks could go for rationing of cash at their own level. The government has already been paying Rs 10,000 as cash advance to its Group C employees, including PSUs, defence and Railways, from November 18 to relieve the pressure on banks.
The All India Bank Employees’ Association has said that the next week or 10 days would be much more tense due to the salary rush. In a letter to the RBI, it said that if the central bank fails to provide adequate cash, it may lead to serious issues of law and order. Besides, a majority of the ATMs are non-functional, which will add to congestion in the bank branches, it said. “We are afraid there would be a lot of undue pressure, tension, conflicts and clashes in the branches and we seek the intervention of the IBA to advise the banks to ask for proper police protection in branches to provide security to the staff,” it added. The All India Bank Officers’ Confederation (AIBOC) also said there was a need to increase cash supply by the RBI. “We also request the IBA to take up with the RBI the need to ensure adequate supply of currency notes to all banks without any discrimination. Some allegations are doing the rounds that a few private banks get more supply of notes from the RBI at the cost of public sector banks,” AIBOC general secretary Harvinder Sigh said.
