If you thought the effects of demonetisation were over?

Hold that thought…

About 3 weeks earlier, RBI completely lifted the restriction on ATM cash withdrawals. In lieu of this, numerous ATMs have a short supply of money, while many more are running completely dry.

What are the reasons for this shortage of cash at ATMs?
 

1. The cash-demand hasn't been unusually high, but the supply has continued to be extremely constrained. As the CEO of one of India's leading ATM manufacturing companies on the condition of anonymity explained, his company is loading less than 70% of the maximum capacity of ATMs. As a result, ATMs have been quickly running out of cash.
    
2. As per the industry insiders, at many locations, ATMs are receiving cash only upto 1/3rd of their capacity.
    
3. There is a huge deficit of Rs 100 notes.
    
4. The production of new currency has fallen substantially by over 36%. As a result, currency in circulation is about 27% lower compared to the pre-demonetisation levels.

This gives rise to some questions…

• Banks have become extremely strict about limiting the number of permissible free transactions at their branches, network ATMs, and ATMs of other banks. Shall customers ask for the compensation in case they are denied cash for any reason? Banks might be unable to maintain the optimum level of cash at their ATMs for all genuine reasons, but as customers sometimes encounter unforeseen situations where they overshoot their ATM withdrawal limits. Banks still charge them penalties. Why not expect the same professional discipline from (un)professional bankers?
   
• The RBI has given a leeway to banks in deciding terms and conditions of their services. But there are extremely inadequate provisions for consumer safety. What on earth justifies such one-sided policies?
   
• If liquidity crunch in the system was evident, why did the RBI lift the cash withdrawal restrictions in the first place?
   
• Is India going to reduce its monetary base permanently, to promote digital transactions? Was that one of the critical objectives of demonetisation?

Well, the relevant questions are plenty. The only problem is irritated, confused bank customers don’t know who will give them answers.

Banks are bullying their customers by imposing unfair charges, the RBI is silent (and rather weak) on guiding banks to take corrective action and the Government has not been paying heed to the real-life problems the common man faces.

So, think again!

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