Not enough cash for payout

A crucial meeting of the State-level Bankers Committee ahead of distribution of cheques to farmers as investment support of the government from May 10 saw committee chairman Swaminathan J. expressing serious concern about cash shortage in banks to implement the scheme.

“It is a difficult situation to handle though the government is in the process of transferring ₹ 1,600 crore out of the total ₹ 5,400 crore from its account for the first phase distribution. Beyond ₹ 1,600 crore, the banks are in no position to implement the second and third phases as currency is not available with us,” Mr. Swaminathan said.

“At least by first week of May, we hope the Reserve Bank of India will infuse currency in banks to take up next phases”, Mr. Swaminathan who is also the Chief General Manager of SBI, Hyderabad Circle, which has the largest domain among eight banks to service the scheme, said in his opening remarks at the meeting.

Clearing charges

SLBC chairman said the banks were faced with implementing a gigantic programme involving currency that would have normally been pumped into its system over six months.

Agriculture Minister Pocharam Srinivas Reddy asked the banks to maintain uniformity in levying clearing charges for cheques. He appealed to the banks not to give trouble to farmers when they visited their premises to encash cheques. Adequate cash should be made available in each district and branch. The branch managers should be instructed to ensure smooth payments.

Insisting that a majority of farmers who would throng the banks will be those with less than two-and-a-half acres of land, Mr. Reddy said they constituted more than 62 %. Those having two-and-a-half acres to five acres will be 11 to 12 % of farmers while only 0.28 % farmers had more than five acres.

Finance Minister Eatala Rajender said the shortage of currency with banks was a big loss to them as they will not get deposits because of loss of public confidence.

Public mood

The public was in no mood to accept the present crisis though they bore the brunt during demonetisation as it was unavoidable.

Earlier, Mr. Swaminathan told media persons that two rounds of loading of cash was taken up in ATMs on Thursday and another two rounds will be done on Friday. He said the deposits went down in banks in November - December last due to a negative campaign that the Financial Resolution and Deposit Insurance Bill will harm deposits.