South Asia | More cash chaos fears as India banks face payday rush
Women sit outside a bank in Ahmedabad, India, November 29, 2016. Photo: Reuters/Amit Dave
Women sit outside a bank in Ahmedabad, India, November 29, 2016. Photo: Reuters/Amit Dave

More cash chaos fears as India banks face payday rush

December 1 is the day when the government, companies, and domestic employers need to pay salaries to their staff

November 30, 2016 11:00 AM (UTC+8)

India’s banks have been bracing themselves this week to cope with the payday rush at branches already besieged by queues of frustrated customers suffering from the country’s cash crunch.

Some banks have complained of running out of notes, while others have been rationing their daily distribution of cash to ensure there is enough to meet demands on December 1, when the government, companies, and domestic employers pay salaries to their staff.

Other measures being taken by the banks include trying to persuade businesses to issue prepaid cards, which can be distributed in lieu of cash to their employees.

Reports say Bank of India’s iconic main branch in Mumbai was forced to shut early after running out of notes, including the new 2,000 rupee ones, within a few hours of opening for business on Tuesday, the first day of the pay day week.

Although customers are entitled to withdraw up to 24,000 rupees a day, branches have been rationing payouts to avoid shutting down their cash counters early.

The government says there is enough cash to meet the demand but the intermittent supply to branches, an aversion to accepting the 2,000 rupee notes, dry ATMs and a shortage of new 500 rupee notes tell a different story.

Comments