Note ban: Banks face trouble in storing 'dead' cash

New Delhi: While people continue to struggle to exchange their Rs 500 and Rs 1000 notes that were declared illegal on Tuesday, banks are facing trouble in storing the “dead” cash.

According to a report in Hindustan Times, banks and cash logistics companies are facing problems in storing the defunct Rs 500 and Rs 1000 notes that have been returned to the banks by the public following demonetisation.

Finance Minister Arun Jaitley had on Saturday said that banks have received about Rs 2 lakh crore so far, while post offices are also receiving the banned currency.

“Over the last 48 hours cash logistics companies have brought back old high denomination bank notes from more than 90% of the ATMs. Bank currency chests do not have adequate storage capacity to hold the volume of currency,” an official told HT.

Cash logistics companies have around 250-300 vaults across the nation and banks too have their own currency storage units, but that does not seem to be enough to store the defunct cash till it is delivered to the Reserve Bank of India (RBI).

“This is not enough to store the pile of cash that is coming back to us,” a bank official said on condition of anonymity.

Meanwhile, the Currency Note Press (CNP) in Nashik has reportedly dispatched first batch of newly printed Rs 500 notes to the RBI. Another batch of five million pieces will be delivered on Wednesday, according to a report.

“The CNP has already sent the first consignment of five million pieces of the new Rs 500 note and another five million pieces are to be dispatched by Wednesday,” the report said, quoting an official.

The Central government, last Wednesday, announced the demonetisation of Rs 500 and Rs 1,000 currency notes in a move to bring black money into the books.
The announcement was followed by a mad scamper to the banks, which saw frustrated citizens in long serpentine queues waiting through the day to have their old currency notes exchanged.

Though the RBI had already printed the new Rs 2000 currency notes, the Rs 500 notes were not available for circulation. The Rs 500 notes are being printed in two presses in Nashik and MP’s Dewas region.

In addition, the RBI has also made arrangement for the noted to be printed at its two printing units in Mysore. The RBI aims to print 400 million pieces of the Rs 500 notes by the end of the financial year.