Local Goa News

Wednesday, November 30, 2016

RBI, banks take steps to save payday blues

Finance ministry and the Reserve Bank of India (RBI) are keeping a close watch as the payday approaches. Viewing the first week of the month as salary time, the central bank has released less cash in the past two days to ensure larger availability from December 1, sources said.

Companies are looking for creative ways to help employees not stand in queues for getting their monthly salaries. The demand for cash cards has gone up by hundreds of thousands.

Banks have a tough task at hand as pensioners and the salaried class queue up for monthly salaries. With state treasuries restricted from accepting or giving cash, state government employees and pensioners may find it difficult to get their monthly dues, not to mention the thousands of other employees in the organised and unorganised sectors.

"While the RBI reserves may be depleting, it is also being replenished to ensure sufficient cash," ministry officials said, adding that there was enough cash till December 31. The government was of the view that the ATM withdrawal quantum could be raised at a later stage when more Rs 500 notes will be made available.

State governments, which were earlier worried about making payments to employees and pensioners through treasuries are now heaving a sigh of relief, with the RBI promising them adequate supply. Kerala Finance Minister Thomas Issac on Wednesday said that the state will face no difficulties on payday as the RBI has agreed to release Rs 1,000 crore to the state.

Arundhati Bhattacharya, chairman of State Bank of India (SBI), told DNA: "We have also tried to use analytics to forecast cash requirements during salary period so as to ensure better preparedness. We hope to be able to undertake salary payments smoothly. Till date, we have tried our best to ensure that we are able to serve the maximum number of people – both at the branches and ATMs."

Bhattacharya added: "We would like to appeal to people to use debit cards for purchases rather than for drawing cash."

The RBI on Wednesday took steps to increase the liquidity situation to ensure adequate cash supply for stabilising the cash crunch scenario, triggered by demonetization.

December 1 is also the payday for private and government sector, and most employees are now demanding salary in cash rather than online or cheque payment.

Taking this into consideration, the Finance ministry has asked the RBI to step up liquidity to increase printing of currencies and circulation of the same.

The bank explained that it is trying its best to increase cash circulation of Rs 100, Rs 500 and Rs 1,000 notes for all markets, apart from printing more currency notes. In the next one week, the RBI is expected to increase the cash circulation of the aforementioned denominations.

Rituparna Chakraborty, President, Indian Staffing Federation (ISF), said that it will all also propel some desirable changes such as bringing the informal workers into the fold of formal workforce. Today, 94% of India's workforce is in the informal sector, whose incomes do not even get properly accounted.

"In the medium to long term, she feels employers engaging casual workers will be compelled to make payments to them only through banking or other formal modes. You will not see any impact of it (cash shortage due to demonetization) on large organisations and bigger metros. It would be only in sectors like real estate, construction and infrastructure, where a lot of work used to get done through cash," Chakraborty added.

DNA India News

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