New Delhi, Nov 14: The sudden announcement by Prime Minister Narendra Modi about the demonetisation of Rs 500 and Rs 1000 notes, caused panic in the entire country. While long queues are being seen outside banks across the country where people line up for hours to withdraw or deposit. The panic situation, following the demonetisation order, was a result of poor logistics and a time-consuming ATM recalibration process. The situation is getting worse day by day because the Narendra Modi government and banks are not prepared with plan B to counter such chaos. People have been flocking at ATM centres but the cash withdrawal machine is going cashless within few minutes. Non-functioning ATM machines and long queues outside banks have left common man in distress.
With the ban on Rs 500 and Rs 1000 notes, the demand of Rs 100 note has got increased. However there is no enough Rs 100 notes in ATM machines to fulfill the demand. Since the ATM system are not reconfigured to identify the new currency notes of Rs 500 and Rs 2,000, it only gives out Rs 100 notes instead of Rs 500 or Rs 1000 or Rs 2000, resulting shortage of Rs 100 currency.
Why is ATM machine going cashless in minutes?
Many ATMs have three-four drawers. These drawers are also called cassettes. Banks keep Rs 100, Rs 500 and Rs 1,000 notes in these drawers or cassette. Each cassette can identify a particular denomination currency note given certain unique ‘pointers’. An ATM machine is programmed to dispense Rs 1,000, Rs 500 and Rs 100 notes in an appropriate combination, based on the cash available in it. Since ATM machines are not reconfigured to identify the new currency notes of Rs 500 and Rs 2,000, they only hand out Rs 100 notes. This means that instead of one Rs 1,000 note, an ATM has to give ten Rs 100 notes, and instead of one Rs 500 note, five Rs 100 notes. The delay in making ATM systems configured with new currency has caused shortage of Rs 100 notes in market.
Besides that, now an ATM machine has less cash that it used to have before the demonetisation of Rs 500 and Rs 1000 notes. Here’s why
A cassette in an ATM can contain 2,500 currency notes. This means, an ATM with three cassettes can carry a maximum of 7,500 currency notes at any given time. Earlier, the ATM system was configured to contain Rs 100, Rs 500 and Rs 1,000 notes. Split equally, an ATM machine could contain Rs 40 lakh. But now, with just Rs 100 notes in all the three drawers, an ATM can contain only Rs 7.5 lakh.
The secrecy maintained by the government over the demonetisation order has also caused a lot of trouble for banks as they are struggling to facilitate customers. There are 2.20 lakh ATMs in India spread over 650 districts. The cash logistic industry, in a day, serves about 25,000 ATMs. The cash logistic industry has withdrawn the old Rs 500 and Rs 1000 notes from ATM machines and modified the switches of ATMs to dispense mostly Rs 100 currency notes which get depleted in minutes. While people are coming in large numbers to withdraw Rs 100 notes in order to fulfill their daily needs, the cash logistic industry is not capable to refill all the 2.20 lakh ATMs in a day when they go cashless.
The inconvenience faced by common man is to continue till all ATMs are up with small denominations and running too.