Did banks ignore RBI order on Rs. 100-ATMs before demonetisation?

     Written by : IANS | Mon, Nov 14, 2016, 04:40 AM

Did banks ignore RBI order on Rs 100-ATMs before demonetisation?

New Delhi, Nov 14 : In anticipation of the huge demand for lower currency notes, ahead of the demonetisation move, the Reserve Bank of India had asked banks to set up Automated Teller Machines which dispensed only Rs 100 notes.

On November 2, six days before Prime Minister Narendra Modi announced in a television address to the nation that Rs 500 and Rs 1,000 denomination notes would become illegal from midnight of November 8, the RBI had asked banks to recalibrate 10 per cent of its ATMs to exclusively dispense Rs 100 notes.

How many banks complied with this directive is not known.

However, the long queues at ATMs and the resultant chaos all across the country would imply that the directive may have been ignored.

In its circular DCM(CC)No 1170/03.41.01/2016-17 issued on November 2, the apex bank said that "in keeping with the objectives of Clean Note Policy and to ensure that genuine requirement of members of public for Rs 100 denomination bank notes are met, the banks should increase dispensation of Rs 100 bank notes through ATMs."

Stating that as a pilot project, 10 per cent of the ATMs in the country would be recalibrated, the RBI said that "as the process involved in configuring the requisite number of machines is not complex, the banks are required to complete the exercise within 15 days" and report compliance.

The RBI had also moved as early as May this year to provide incentive for setting up ATMs which dispensed only Rs 100 notes. In a circular on May 5, The central bank promised to pay 50 per cent of the cost of such ATMs up to Rs 2 lakh.