Befriending ATM guards is the new way to beat demonetisation blues

In other news, restrictions on withdrawal of cash are likely to continue beyond Dec 30

The security guard manning one of the many ATMs spread across Puducherry is very much in demand in the post-demonetisation era. According to The Hindu, people across the city are approaching the security personnel manning these kiosks with the hope of befriending them so that they get a leg up over the less fortunate souls and withdraw some cash without the usual hassle of waiting in long queues. 

While anecdotal reports have emerged of similar such enterprising ventures across a country starved of cash, it is not all that benign. According to the Deccan Chronicle report from late November, guards manning ATMs in Chennai had decided to "help" people withdraw money. Of course, the help in this case was being rendered for monetary consideration, in other words, a commission. The report described how the guards would collect debit cards, along with the associated passwords, from their select customers during the night and subsequently return them with close to Rs 5,000, from two possible transactions, a few hours later in return for a "minimal commission". 

The situation on ground is unlikely to improve. According to reports, restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30 as currency printing presses and the Reserve Bank of India have not been able to keep pace with demand for new currency notes.

As the 50-day deadline for the completion of the demonetisation process draws near, there is a growing consensus among bankers that the restrictions on withdrawal would have to continue even in the New Year so as to maintain orderly working at the banks. Further, banks at many places are not in a position to disburse even the current limit of Rs 24,000 per week due to the cash crunch and are rationing the valid currency depending on cash availability.

If this limit is withdrawn for individuals and businesses from January 2, it is unlikely that banks would be able to disburse the higher demand for valid currencies given the current cash position.

The currency infused into the system, however, is much less than what has been deposited in the form of defunct notes. As of December 22, banks, according to the RBI, had issued currency worth over Rs 5.92 lakh crore to the public since the demonetisation of old high-value notes. The old Rs 500 and Rs 1,000 notes returned to RBI and currency chests amounted to Rs 12.44 lakh crore as on December 10.