Queues at banks thin, but some branches still face cash pain
PTI Bank branches across the country today witnessed very short queues, with the government banning over the counter exchange of the cancelled currency. However, some branches in urban centres faced cash crunch. The shortage at some branches is mostly because of focus of the government tilting towards rural areas, sources said, adding funds are being made available in rural and semi-urban pockets so that farmers get adequate cash for sowing rabi crop. There are reports that banks in major metros are getting one-sixth of the cash requirement, leading to chaos at the branches. According to a senior bank official, branches of various banks in Mumbai and Delhi are getting much less cash than their requirements, which is why all the customers ...
Demonetisation- Its Challenges and Effects in Days to come
Sheela Mamidenna The Government's sudden move to demonetise Rs.500 and Rs.1000 currency notes late on Tuesday took the whole country by storm. Reactions poured in from every corner. While many common people stood in line waiting for Rs.100 notes to run their homes, many were of the opinion that in the long term it was for the greater good. Financial firms, analysts, chartered accountants seem to be on the same page that this move will have a positive impact in the long run. Though an accurate quantification of the transitory impact that demonetization could have on the GDP is difficult, as there are only guesstimates that the best financial analysts can come up with given the size of the cash economy( more than ...
RBI achieves neutral banking system
The Dollar Business Bureau The Reserve Bank of India effectively achieved the ‘neutral’ banking system from cash-crunch zone faced 3-4 months back. The neutral system will help the customers to gain quick benefits from RBI’s rate cuts. On the account of Rs 80,000 crore Open Market Operation, purchases in last three months and decline in cash circulation in June, the central bank achieved the desirable neutral liquidity in 1st quarter, said India Ratings Research. OMO mechanism helps the RBI to infuse or draw out the cash from the banking system. The cash crunch in Feb-March period was as high as Rs 1.4 lakh crore. According to RBI reports, by June cash surplus was seen in range of of Rs 19,700- 31,700 crore The report stated ...
Banks ask RBI to leave surplus cash in market for more liquidity
The Dollar Business Bureau Due to the cash crunch prevailing in the market, the banks are exacting the Reserve Bank of India to leave surplus government cash in the hands of the bank, so that they can prevent the temporary cram in the market. The momentary fall in the prices above the policy rates is one of the reasons for the cash rush we are facing, they said. During a meeting on Thursday headed by Raghuram Rajan, the banks also demanded the RBI to bring down the CRR ( the cash reserve ratio) by a percentage point so that Rs.90,000 crore would be released into the banking sector. However, central bank has not given any signal as to what its ...
