Logistics players face losses after cash squeeze: CMS

Flagging currency supply as a key concern, cash logistics major CMS Info Systems today said idling of workforce due to this is making the industry stare at huge losses.
Vice-Chairman and Chief Executive Rajiv Kaul said it will take at least 3 weeks to recalibrate the 2.20 lakh ATMs to accommodate newer sized banknotes and two months for the supply to normalise, which is "most distressing".
"We're crippled by lack of money at right place and right time. All our costs have doubled up due to overtime and welfare measures for our staff while the work we're doing is not even a fifth of the normal," he told PTI over phone.

He said the cash logistics industry has been asking RBI to ensure cash is made available early in the morning and can be seamlessly distributed across the ATMs.
However, currency is not being made available and the staff has to keep waiting for trips, he added.
Kaul also suggested that there is a need to make the banknotes available at 2-3 places in a city for easier distribution, but rued that at present it has to be arranged from 25-30 locations across bank branches.

He welcomed setting up of the task force under RBI Deputy Governor S S Mundra, saying the industry hopes these impediments are addressed.

Stating that the losses for the industry may run into hundreds of crore, Kaul demanded the companies be compensated out of the benefits accruing to the government from the drive.
He said cash logistic companies are paid on the basis of trips to ATMs and the value of currency handled and added that there are setbacks on both fronts.
According to Kaul, till now, 12,500 of 2.20 lakh ATMs have been re-calibrated to dispense the newer notes and was optimistic that the entire exercise will get over in three weeks.
However, he was sceptical if the supply issue will be solved by then, saying "it looks like at least three months before the situation normalises".

Kaul said cash logistics personnel have been attacked in the last week since the government stunned everybody with the move to demonetise Rs 500 and Rs 1,000 banknotes.
"The public is angry for not getting the money and is venting it out on our officials at some places. In other instances, our vehicles have also been chased by groups of motorcyclists," he added.