Stocking of ATMs with new notes to take longer: Jaitley

As queues grew longer outside banks and ATMs across the country, Finance Minister Arun Jaitley on Saturday said the re-calibration required for over two lakh ATMs to dispense the new Rs. 500 and Rs. 2,000 notes would take another two to three weeks.

Announcing the demonetisation on Tuesday, the government had promised that ATMs would start functioning across the country on Thursday and Friday.

Speaking to reporters, Mr. Jaitley said roughly Rs. 2 lakh crore had been deposited across banks in the first two-and-a-half days of the demonetisation announcement on November 8, withdrawing the old Rs. 500 and Rs. 1,000 notes as legal tender.

While appealing to the citizens to use electronic means for monetary transactions, the Minister requested people to not to crowd banks to deposit/exchange cash and to stagger it over the deposit window till December 30.

He also rubbished allegations that deposits had spiked before the demonetisation announcement as some people had been informed of the drive beforehand, calling such statements “irresponsible.”

Massive operation

“It is a massive operation ... to replace 86 per cent of currency under circulation… It is a regret that people are being inconvenienced because replacement of this magnitude causes inconvenience as you have to go to the bank, you have to stand in a long queues,” the Minister said.

All ATMs in the country need to be re-calibrated individually to dispense the resized notes of Rs. 2,000 and Rs. 500, in addition to the Rs. 100 note.

The State Bank of India, the country’s largest bank, had reported Rs. 47,868 crore deposits of the old Rs. 500 and Rs. 1,000 note till 12.15 p.m. on Saturday, Mr. Jaitley said. Given that the SBI and its arms account for about 20-25 per cent of all banking activities in the country, between Rs. 1.5-Rs. 2 lakh crore had come into the banking system. The SBI has reported 58 lakh transactions involving exchange of old currency notes, 22 lakh ATM transactions and 33 lakh withdrawals from branches.

Mr. Jaitley said the government anticipated that the first few days would see a huge demand for exchange of notes and assured that the RBI and the banks had stocked up enough currency to replace Rs. 14 lakh crore worth of old notes.

‘Long-term advantages’

The Finance Minister conceded that there would be inconvenience for the first few days, “but the long term advantages of this are to the overall economy.”