The Costs of Demonetisation: Payday Havoc; Fish Market in Kerala Village Crashes

A daily round-up on the human impact of demonetisation.

A 'no cash' sign outside an ATM. Credit: Reuters

A ‘no cash’ sign outside an ATM. Credit: Reuters

Payday havoc

Pradeep Pawar, an executive in a private firm in Mumbai told the Financial Express that he managed to withdraw Rs 2,000 but would have to come back to the ATM tomorrow for more money to meet his monthly expenses. The report also quoted a 45-year-old woman standing in line outside an ATM in Okhla, Delhi, saying, “How can it be possible that we are not able to withdraw our own money?” On the first payday after demonetisation, no semblance of normalcy has returned – long queues outside ATMS and banks appear to be the norm now. According to PTI, banks have resorted to rationing cash to handle the payday rush, and the Economic Times reported that banks and ATMs ran out of cash soon after opening.

An official from a private bank told the Economic Times, “The situation will not change much from our side even if it is salary day because there is not enough cash in bank branches or ATMs,” adding that that situation can only get better once the Rs 500 notes come into circulation.

As a consequence, even though the limit for withdrawal from banks is Rs 24,000 per week, the banks have only been able to provide people with Rs 5,000 per person, while some banks with a better supply managed to provide Rs 10,000 and Rs 12,000. Twenty-three days after the move was announced by the prime minister, 80% of the ATMs in the country still do not have cash, the PTI report said, while those that do, have only Rs 2,000 notes that make availing change difficult.

A former RBI official told the Economic Times, “Payday worries are overdone,” and that the cash crunch is also because of people hoarding cash instead of circulating it. He also said that RBI was printing more currency and focusing on distributing it.

Bank manager dies

The manager of the Punjab National Bank branch in Sainik Vihar died today after being hospitalised since November 12, three days after demonetisation. A member of the bank officers’ union, who didn’t want to named, told The Wire that the manager had suffered a brain haemorrhage after working continuously for three days after demonetisation was announced and had been hospitalised since.

Villagers block Noida-Sikandrabad road

“No cash” notices that hung outside banks in Mandi Shyam Nagar in Dankaur, Uttar Pradesh, led to angry villagers taking to the streets in Bilaspur and blocking traffic for more than an hour yesterday.

Dharam Bhati, one of the villagers, told the Indian Express, “For the last three days I have been visiting the bank to withdraw Rs 2,000 but am unable to get the money. Banks claim they are not getting cash. The ATMs too are without cash.”, while another villager said that banks were giving money to acquaintances only.

Vendors at groundnut festival in Bengaluru suffer

Sailo Diki, a contributor from Bangalore, wrote to The Wire about a groundnut festival that takes place each year and the impact of demonetisation on it.

Each year around end November, farmers from nearby villages come together and bring their groundnuts harvests to the Bull temple in Basavanagudi, Bengaluru, dedicating it to Lord Basava (Bull). Also known as the groundnuts festival, Kadalekai Parishe was celebrated from November 26-29, 2016.

The vendors at Bull Temple road sold various items – from fresh and fried groundnuts, to jewellery and blankets – a wide range of items were on display.

Amidst the ongoing post-demonetisation cash crunch, the groundnuts festival has seen a substantial decline in sales, with many vendors having to turn away customers with Rs 2,000 notes since they could not provide change for it.

Mrs Puttathai from Chittor, a middle-aged woman selling fresh groundnuts says, “This time, there is very little that I am taking home. Other years, people would buy my groundnuts for more than Rs 100 but this year, no one has money and all we receive is tens and twenties [notes].” Although large crowds attended the festival, few could buy much given the lack of cash.

Fish market in Kerala village crashes 

Fisherwomen in the island of Anju Thengue have been caught unawares by demonetisaiton. Jessy, a 63-year-old fisherwoman, told VillageSquare, “In the run-up to Christmas, our village had been seeing joy and prosperity. But now the village is awaiting a hungry Christmas. I don’t have black money. But why are buyers who regularly buy fish only from me are not coming to the market?”

Around 60% of the women on the island work in the fish trade and most do not have bank accounts. Many of them have deposited their savings with the Mamballi Nedughadam Fishermen Society, the VillageSquare reported, but they are being denied access to their own money. Jerald, the secretary of the association expressed his helplessness and said, “If you deposit the amount, you could not withdraw it whenever you want,”.

Fish used to be auctioned every morning at the seashore on the island till November 8, but after demonetisation, fishing has reportedly come to a standstill. As a consequence, prices have crashed. Karmali, who is in charge of auctioning the fish told the VillageSquare, “Irrespective of the variety and quality, one box of fish had to be auctioned from the sea shore at least for Rs 1,000,” but she lamented that “the box has not been auctioned even for Rs 100.”