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'You never know what notification will come on Friday'

By Anup Roy and Abhijit Lele
December 22, 2016 06:12 IST
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'Nobody will wait now.'
Everyone will come to deposit their old notes.'
'The confidence is shaken.'
Anup Roy and Abhijit Lele report.

A scene outside banks in New Delhi, December 1, 2016.Facing intense criticism, the Reserve Bank of India on Wednesday, December 21, withdrew rules that required bank customers to make deposits of above Rs 5,000 in old currency notes at one go and only after satisfying officials with reasons for not doing so earlier.

In the modified circular on its Web site on Wednesday afternoon, the central bank said two sub-paragraphs of the original circular 'will not apply to fully KYC compliant accounts.'

This means there would be no restriction on cash deposits -- neither on the amount, nor on the number of times money could be deposited.

The latest notification is the 60th from the North Block-Mint Road combine in the past 43 days.

The central bank faced a barrage of criticism on social media throughout the day, while many said they had trusted the prime minister and the finance minister, who had advised them to not extend queues outside banks and ATMs, as they would have ample time till the end of the year.

Bankers, too, are angry by the frequent revisions. Take, for example, a branch manager of a public sector bank in West Bengal.

Till Wednesday morning, he was refusing deposits of above Rs 5,000 in old notes, as customers had no explanation, except that they were waiting for the queues to shorten.

"You never know what notification will come on Friday. Nobody will wait now. Everyone will come to deposit their old notes. The confidence is shaken," said the branch manager, requesting anonymity.

In Mumbai, meanwhile, banks were readily accepting deposits above Rs 5,000 after taking a written explanation by the depositors.

A State Bank of India branch manager in a suburb of Mumbai said those waiting for the deposits came in large numbers in the past two days.

In most cases, the reasons given for the delay were either 'death in the family' or 'went to native place.'

The manager, however, does not expect people rushing in after the latest U-turn or a large quantum of deposits for the reminder of the month.

"Most large transactions have already been done and that is why there were long queues in the initial period. Nobody will wait this long," said the branch manager who did not want to be named.

Before the latest notification, SBI Chairman Arundhati Bhattacharya said at an event in the morning that banks were doing what they have been asked to do and bankers should not be blamed by customers.

The bank management was figuring out ways to reward the staff, she added.

SBI announced two days of special leaves for its employees that can be availed till March 2018.

The bank, she said, should be able to meet the salary day demand after the end of this month (and the start of the New Year), but it depends on the amount of cash available. She exuded confidence that the situation would improve significantly by then.

Normalcy will be restored once the RBI pushes enough notes in the system, Bhattacharya said.

The central bank, in a separate notification, said, from November 10 to December 19, banks have issued notes worth Rs 5.92 lakh crore, either through banks or ATMs.

The government had demonetised about Rs 15.44 lakh crore on November 8.

"As cash comes back in, we have to ensure that people don't slide back to their bad habit of using cash," Bhattacharya said.

Bank officers were forced to call off an agitation to protest the scarcity of cash and the ensuing hardships for bankers, in front of the RBI headquarters in Mumbai.

According to officials of the All India Bank Officers Confederation, the police clamped Section 144 of the Indian Penal Code, disallowing assembly of people.

The police warned they may invoke more legal provisions to prohibit group activity in front of the RBI office, AIBOC officials said.

IMAGE: A scene outside banks in New Delhi, December 1, 2016.

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Anup Roy and Abhijit Lele
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