‘Panic following withdrawal of notes has largely faded’

‘Panic following withdrawal of notes has largely faded’

The panic and anxiety that followed in the immediate wake of Prime Minister Narendra Modi’s demonetisation announcement had largely died down, Punjab National Bank (PNB) CMD Usha Ananthasubramanian said. She added that improved supply of Rs.500 notes would further ease the pressure.

“A person who would have earlier withdrawn Rs.5,000 was now withdrawing double that because of the uncertainty and the anxiety,” Ms. Ananthasubramanian said at a press conference on Saturday. “The supply of Rs.500 notes being ramped up will ease the situation. Already the panic seen on day one and day two has faded to a great extent.”

PNB had accepted Rs.47,000 crore of deposits since the demonetisation announcement on November 8, Ms. Ananthasubramanian said. “CASA (current account savings account) deposits have surged. This gives an opportunity to revisit deposit rates. It will also have an impact on lending rates, but first deposit rates should come down.”

The banker also said that PNB had recorded 68.47 lakh transactions for the exchange of Rs.2,514 crore worth of notes since November 8.

The government has allowed families celebrating weddings to withdraw Rs.2.5 lakh each from the groom’s and bride’s side. However, banks were yet to act on the move as guidelines were still awaited, Ms. Ananthasubramanian said. Banks were likely to receive them by Monday or Tuesday, she said.

Business as usual

The PNB chief said although the focus of the bank was on receiving deposits, disbursing cash and making ATMs functional, normal banking activities continued. “We are running some of our branches on double shift so that the employees are fresh. Even loan recovery is taking place.”

State-run oil marketing companies on Thursday announced a tie-up with State Bank of India to allow bank account holders to withdraw up to Rs.2,000 from petrol pumps equipped with SBI point-of-sale machines. Punjab National Bank is following suit, according to Ms. Ananthasubramanian.

“We have 201 petrol pumps in the country with our POS machines,” she said. “We are working out how to get cash to them for this.”

In light of the cash crunch, the RBI had authorised banks to release soiled Rs.100 notes as well as Rs.10 coins to the public, Ms Ananthasubramanian said.

“RBI has told us it has authorised the distribution of soiled Rs.100 notes, and coin distribution is also taking place,” she said.

“It is better to have 10 Rs.10 coins than one soiled Rs.100 note, isn’t it?”

Source: The Hindu



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