ET BureauState Bank of India and its associates received deposits of more than Rs 92,000 crore across their 24,000 branches by Tuesday, following the government scrapping Rs 500 and Rs 1,000 notes on November 8. Arundhati Bhattacharya, the chairman of India’s biggest bank, told ET that normalcy is being slowly restored as ATMs are calibrated to dispense new notes, adding that interest rates will fall on loans and deposits.
SBI and other banks have mobilised huge sums as deposits. What will be the impact on interest rates?
All rates will fall. It will happen very soon, although I can’t say when exactly this will happen.
There has been criticism that the government did not plan the demonetisation exercise well...
A task of this nature needs a lot of secrecy, so to that extent, some kind of pain would be there and if you try and bring every player into it, then it is not going to work, it will go out. So we have to understand that there is only so much that can be done ahead of time. For a country like ours, with more than 10% of GDP in cash, there are bound to be problems. So, no matter how much you try, people won’t be sufficiently prepared. The main pain comes because the new notes have to be calibrated at the ATMs. No matter what you do, there would be a period of changeover and (during) that period of changeover there would be pain.
Also Read: Demonetisation: Government introduces indelible ink to stop multiple currency exchanges in bank
How is the situation on ground a week after the announcement?
Situation on ground is much better in most states. In a few cities like Mumbai, the queues are much smaller while the likes of Delhi, Kolkata and Bengaluru are still seeing long queues. Other states are reporting much lower turnout. Anxiety among customers has come down.
What are the measures being taken to alleviate the misery of customers standing in long queues?
We have set up multiple counters so senior citizens and new account holders can be handled quickly. We are arranging for water for customers. Also, we have also put in place the green channel where you can swipe debit cards at point of sale (PoS) machines and withdraw money. We have 2.4 lakh PoS machines which can dispense Rs 2,000 in cash. Business Correspondents, who had a Rs 10,000 limit, can now exchange and accept deposits up to Rs 50,000 per day. Meanwhile, within branches, we are ensuring there is full coordination. Staff are helping customers in filling forms as soon as they enter branches.
Also Read: When demonetisation caught the country unawares, bankers took up the challenge
ATMs are running out of cash quickly. How are you addressing this issue?
As you know, ATMs have to be recalibrated at the switch end and the front end. The switch-end calibration is done, now the front-end calibration needs to be done manually, ATM by ATM.
The rollout has started. The moment Rs 2,000 and Rs 500 notes are loaded at the ATM, they will stop going dry. They are going dry because only one cassette is loaded with Rs 100 notes and one cassette does not have that many notes.
Also Read: Unsung heroes - Custodians of ATMs and truck drivers
When can we expect that to happen?
Almost 43,650 of our 56,000 ATMs are up and running. All onsite ATMs are loaded four times a day and offsite ATMs are loaded at least twice.
But the running out will not stop until we put Rs 500 and Rs 2,000 notes in the ATM. That will take a week to 10 days. The calibration and rollout of Rs 2,000 has already started.
Do you fear the hoarding of small denomination notes due to panic over non-availability of cash?
On November 13, we actually saw deposits of Rs 100 notes go up. So, hoarding is not happening at the kirana shops, it is happening at the individual level. I think spending has also started, which had stopped for a couple of days.
Also Read: Demonetisation - Here's how to live cashless
How long will it take for normalcy to return?
The ATMs should start functioning in about a week’s time and then normalcy will be restored. Meanwhile, our appeal to people is to go digital and use plastic money. If everyone does this, tax rates and prices will come down. Digital is the only way to get rid of corruption and unaccounted cash. Otherwise, in another two years, people will again start accumulating cash. The main thing is to convert to digital. We can’t have a better opportunity than this. Those who claim that they need cash because they are unable to pay labourers are those who are not paying minimum wages. I am making an open offer — anyone who wants their employee’s account to be opened, we will have a camp to get their bank account open.
SBI and other banks have mobilised huge sums as deposits. What will be the impact on interest rates?
All rates will fall. It will happen very soon, although I can’t say when exactly this will happen.
There has been criticism that the government did not plan the demonetisation exercise well...
A task of this nature needs a lot of secrecy, so to that extent, some kind of pain would be there and if you try and bring every player into it, then it is not going to work, it will go out. So we have to understand that there is only so much that can be done ahead of time. For a country like ours, with more than 10% of GDP in cash, there are bound to be problems. So, no matter how much you try, people won’t be sufficiently prepared. The main pain comes because the new notes have to be calibrated at the ATMs. No matter what you do, there would be a period of changeover and (during) that period of changeover there would be pain.
Also Read: Demonetisation: Government introduces indelible ink to stop multiple currency exchanges in bank
How is the situation on ground a week after the announcement?
Situation on ground is much better in most states. In a few cities like Mumbai, the queues are much smaller while the likes of Delhi, Kolkata and Bengaluru are still seeing long queues. Other states are reporting much lower turnout. Anxiety among customers has come down.
What are the measures being taken to alleviate the misery of customers standing in long queues?
We have set up multiple counters so senior citizens and new account holders can be handled quickly. We are arranging for water for customers. Also, we have also put in place the green channel where you can swipe debit cards at point of sale (PoS) machines and withdraw money. We have 2.4 lakh PoS machines which can dispense Rs 2,000 in cash. Business Correspondents, who had a Rs 10,000 limit, can now exchange and accept deposits up to Rs 50,000 per day. Meanwhile, within branches, we are ensuring there is full coordination. Staff are helping customers in filling forms as soon as they enter branches.
Also Read: When demonetisation caught the country unawares, bankers took up the challenge
ATMs are running out of cash quickly. How are you addressing this issue?
As you know, ATMs have to be recalibrated at the switch end and the front end. The switch-end calibration is done, now the front-end calibration needs to be done manually, ATM by ATM.
The rollout has started. The moment Rs 2,000 and Rs 500 notes are loaded at the ATM, they will stop going dry. They are going dry because only one cassette is loaded with Rs 100 notes and one cassette does not have that many notes.
Also Read: Unsung heroes - Custodians of ATMs and truck drivers
When can we expect that to happen?
Almost 43,650 of our 56,000 ATMs are up and running. All onsite ATMs are loaded four times a day and offsite ATMs are loaded at least twice.
But the running out will not stop until we put Rs 500 and Rs 2,000 notes in the ATM. That will take a week to 10 days. The calibration and rollout of Rs 2,000 has already started.
Do you fear the hoarding of small denomination notes due to panic over non-availability of cash?
On November 13, we actually saw deposits of Rs 100 notes go up. So, hoarding is not happening at the kirana shops, it is happening at the individual level. I think spending has also started, which had stopped for a couple of days.
Also Read: Demonetisation - Here's how to live cashless
How long will it take for normalcy to return?
The ATMs should start functioning in about a week’s time and then normalcy will be restored. Meanwhile, our appeal to people is to go digital and use plastic money. If everyone does this, tax rates and prices will come down. Digital is the only way to get rid of corruption and unaccounted cash. Otherwise, in another two years, people will again start accumulating cash. The main thing is to convert to digital. We can’t have a better opportunity than this. Those who claim that they need cash because they are unable to pay labourers are those who are not paying minimum wages. I am making an open offer — anyone who wants their employee’s account to be opened, we will have a camp to get their bank account open.
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