Move necessitated by Jan Dhan cash doles too

MUMBAI/NEW DELHI: Banks are keeping two-and-half to three times more cash across their network to ensure that there is no dearth of currency at branches or ATMs at a time when there is considerable nervousness due to the coronavirus pandemic.The country’s second largest public sector lender Punjab National Bank for instance has three times more cash. Similarly, HDFC Bank, the largest private lender, is keeping around 50% more cash in its ATMs.SBI executives also said they had stocked up the system with more cash but did not disclose details. Another top private player said it is now maintaining cash of two-and-half to three days instead of one to one-and-half days earlier.“At the system level, the amount in ATMs is more than twice what you usually get. No ATM is running dry for want of cash,” said a banker.More currency with banks is part of a strategy worked out by the finance ministry and RBI when the lockdown began almost three weeks ago and was meant to avoid any panic in the system as ATMs running out of cash post-demonetisation in 2016 was fresh in the minds of people.As a result, RBI has given more cash to banks, while the finance ministry did a bank-wise calculation and the home ministry chipped in to ensure that there was no problem in cash delivery. “We have received tremendous support from the government, which has helped us make more trips and ensure that ATMs don’t run dry,” said Rituraj Sinha, managing director of SIS.What has also necessitated this is the large amount of cash being released in the system via doles for women Jan Dhan account holders as well as farmers, seniors, widows and the handicapped. As a result of this, during the first 10 days of April, cash withdrawals are estimated at around 1.5 times the average.But the lockdown has changed the way ATMs are filled. For instance, there is more demand in residential areas than the usual hotspots — business districts, airports and railway stations. A large amount of cash is being pumped into rural areas as part of Garib Kalyan Yojana. “Currency in circulation will go up as printing has to increase as velocity of cash in currency form is the highest,” said Mani Mamallan, founderdirector of Electronic Payment and Services-which provides ATM management services.