Seeking to address rising concerns as people returned from ATMs and banks across the country without cash, Finance Minister Arun Jaitley Saturday said it may take up to three weeks for all the 2 lakh ATMs to operate normally. Each one has to be calibrated individually to dispense the new sized notes of Rs 2,000 and Rs 500 besides the lower denomination currency of Rs 100, he said.
Regretting the hardships, Jaitley advised the public to be patient and said the move would have benefits for the economy in the long term. He also urged people not to flock to the banks to exchange the now-defunct banknotes, and stagger it over the 50-day window.
At a hurriedly called press conference, the Finance Minister assured that the RBI and banks had stacked up enough currency to replace the Rs 14 lakh crore worth of Rs 1,000/500 notes that had been declared invalid, and said the government was constantly monitoring the “massive operation”.
The briefing, second in three days, was called after anger and scuffles were seen in long queues before banks, which struggled to handle customers seeking to deposit or exchange old notes and withdraw money.
“ATMs could not have been calibrated (before the announcement) because of secrecy issue. Thousands of people are involved in the recalibration exercise (and) secrecy could not have been maintained. Recalibration takes at least two-three weeks,” Jaitley said.
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“But once the money is available both in the system and more so in the banking system, the advantages of that to the economy and businesses will be far more. The capacity of the banks with all this additional capital to lend and support businesses is going to be far higher. And therefore medium-term and long-term advantages to the economy as against this temporary inconvenience or disruption are far too many,” he said.
About allegations by political parties that bank deposits had surged before the demonetisation was the announcement by the government, Jaitley said the earlier spike in deposits was primarily on account of the arrears of Seventh Pay Commission being paid.
The minister urged people to accept the currency available at the banks rather than insist on smaller denominations. “Even though a large quantum of currency is available, in the given branch, that particular choice may not be available. And therefore, I would appeal to people to take whichever currency is available.”
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Jaitley hoped that with the passage of time, crowds at banks will start thinning. “The RBI and banks are in readiness… The situation now is peaceful, there are long queues but very orderly queues,” he said.
In some parts of the country, banks will remain closed on Monday on account of Guru Nanak Jayanti. They will be open in western and southern India.
Giving an example of the country’s largest lender SBI, which controls 20-25 percent of the banking business, Jaitley said that in two and a half days since it opened after the demonetisation announcement, it had done 2.28 crore transactions. “You can make an estimate that the total banking system would have done about four-five times of that of SBI, which is about Rs 2 lakh crore,” he said.