Economy

In India’s Easternmost Corner, Cash Is Still in Very Short Supply

While the State Bank of India in Arunachal’s capital has blamed the RBI for the cash shortage, the public and business establishments continue to bear the brunt of the cash crunch.

A closed ATM booth in Itanagar. Credit: Sangeeta Barooah Pisharoty

Itanagar (Arunachal Pradesh): The severe cash crunch caused by the Narendra Modi government’s demonetisation policy may have begun to wane in different parts of the country, but in the BJP-ruled Arunachal Pradesh, the public and business establishments continue to suffer from a cash crunch as normalcy is yet to set in the operation system of the banks, particularly in state capital Itanagar.

After a short spell of cash flow post demonetisation, public and private sector bank ATMs in Itanagar and the adjoining districts begun to dry up in March. Due to the shortage, the State Bank of India (SBI), which has the largest number of customers in the state, has lately set a daily limit of Rs 5,000 on cash withdrawal from each account through cheques.

Besides causing distress to the common man, the cash crunch has severely affected businesses and other establishments as well.

The SBI Itanagar branch, which holds the currency chest and supplies cash to the private and public sector banks operating in the state capital, has, however, remained mum on the issue. According to local news reports, a senior SBI official blamed the RBI for the cash crunch in March. A May 3 news report in The Arunachal Times stated that in March, the Guwahati branch of the RBI offered temporary relief to SBI Itanagar on the condition that they themselves organise the security for the transportation.

SBI Itanagar reportedly turned down the proposal as the security protocol says the RBI has to provide security for the safe transportation of cash. According to the report, “Capital Complex alone needs rupees five crore at a time for the ATMs to dispense money, which obviously the SBI has not been able to fulfill.”

The only private sector bank that has been keeping its ATM counter in Itanagar functional for a few hours each day is the HDFC branch. Speaking to The Wire, HDFC manager A. Sarma said, “Ideally, SBI which holds the currency chest should supply us the cash but for more than a month it has not been able to do so. So we have begun organising cash flow on our own from neighbouring Assam. Since we have a lot more branches in the Northeast than other private banks, we have begun our own system of transporting cash, which has come handy now.”

Sarma added that, “Queues before ATMs and banks were seen during the demonetisation drive in Itanagar. However, it began to become normal but yet again the cash crunch has surfaced. We have never seen such crunch for cash and queues in front of our ATM in Itanagar in normal times. Though we have been filling cash in our ATM almost every day, it gets over in just two-three hours as all other ATMs are dry.”

With customers using withdrawal slips to take out money, most banks have even run out of such slips. For the last few days, a customer can withdraw money from his/her account only through cheques.

“I have accounts in ICICI bank and the SBI. Both the banks are allowing cash withdrawal only through cheques. Since those who have run out of cheque books by now are suffering cash crunch even if they have money in their accounts, I am being careful in writing cheques. I withdrew some cash two days ago by driving down to an ATM in [neighbouring] Gohpur in Assam so that the daily needs of the house can be met,” said a customer at the local ICICI branch.

On May 4, the All Arunachal Contractors Welfare Association sought the intervention of the state government on the issue. It said, “Since the last few months, the state has been facing severe cash crunch due to non-supply of cash by the RBI.” The association also accused the state government of “not doing enough to ensure steady supply of cash owing to which the common people, business houses and other establishments were being badly affected.”

The state government has so far been silent on the issue.