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Last Updated : Apr 07, 2017 12:58 PM IST | Source: Moneycontrol.com

To avoid another ATM nightmare, only banks may circulate proposed Rs 200 notes

The RBI took up the issue of introducing Rs 200 bank notes at a meeting last month as it sought shore up the availability of lower denomination bank notes after ATM operators reported a shortage.

Should Reserve Bank of India (RBI) clear a proposal to introduce Rs 200 banknotes, it is unlikely to circulate the new currency through ATMs, reports Hindustan Times.

There was chaos when the Reserve Bank of India introduced new Rs 500 and Rs 1000 notes after demonetisation last November as all the ATMs in the country had to be recalibrated. The vast majority of ATMs ran dry, leading to serpentine queues, and the situation has still not completely normalised.

To avoid an encore, the central bank now wants to circulate the new banknotes only through bank branches. It follows the same process for Rs 50 and Rs 10 notes.

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The RBI took up the issue of introducing Rs 200 bank notes at a meeting last month as it sought shore up the availability of lower denomination bank notes after ATM operators reported a shortage.

The report quoted a senior banking official as saying that 2.2 lakh ATMs would have to be recalibrated if new notes are to be dispensed and the exercise will take more than a month.

The official said that people are still reluctant to take Rs 2000 notes. RBI officials had earlier said that a proposal to reprint Rs 1000 notes is also being considered as a cash crunch is still being reported from different places.

Anecdotal reports from many states over the past week suggest that due to a combination of factors, people have been struggling to obtain adequate cash from either ATMs or bank accounts.

The worst hit seem Andhra Pradesh and Telangana where many ATMs have run dry. People in Hyderabad have been left stranded as several ATMs across the country displayed a no-cash board.

According to a report in Business Standard, a State Bank of India official said that the supply of currency from RBI was far less than the demand. RBI has been supplying Rs 50 crore daily, whereas the demand was Rs 250 crore.

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First Published on Apr 7, 2017 12:58 pm
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