Tag Archives: atm

NO CASH in ATMs? What’s Behind Sudden ‘run’ on Banks?

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It is more than 18 months since the whole country’s citizens were paraded on the streets by the Demonetisation 2016 and the days are here again with No Cash board greeting on ATMs, especially in non-BJP ruled states of Andhra Pradesh, Telangana and West Bengal. Karnataka facing elections next month has been partly spared from the cash crunch.

West Bengal Chief Minister Mamata Banerjee on Tuesday questioned whether a "financial emergency" was subtly imposed in the country. "Seeing reports of ATMs running out of cash in several states. Big notes missing. Reminder of #DeMonetisation days. Is there a Financial Emergency going on in the country? #CashCrunch #CashlessATMs," Banerjee tweeted.

Even BJP-ruled Madhya Pradesh, Maharashtra, Gujarat and coalition government in Bihar have reported cash crunch on Monday but Union Finance Minister Arun Jaitley categorically denied the reports of any cash crunch. "There is more than adequate currency in circulation," he reiterated, saying RBI figures show that Rs 18.17 lakh crore was in circulation.

Severe cash crunch was faced in India following Nov. 8 ban on high-value currency notes. Almost the entire country was seen in big queues before the banks, and the sordid saga continued at a stretch for 15 days.

However, this time, reports say that the cash crunch was a knee-jerk reaction to the latest Financial Resolution and Deposit Insurance (FRDI) Bill, being tabled in parliament. Rumours are widespread that it affects deposits if a bank goes bankrupt, though government has clarified that it is not the case.

In some states, this has led to a run on banks from where people are withdrawing deposits and collecting cash, especially, in Rs.2000 notes so as to hoard it easily at home.

Already huge bank defaults in Punjab National Bank, ICICI bank scam, and evasion of thousands of crores by big business magnates are making round every day in the country, leading to loss of people’s faith in the banking system. As of March 2018, bank deposits grew at 6.7 percent compared to 15.3 percent in 2016-17.

Opposition has described it as a "deliberate move” of the government. “News reports say that ATMs around the country are running of out of cash. Is it just gross mismanagement by the Modi Govt or is this a deliberate move? The people of the country forced to suffer even after 1.5 years of demonetisation show the acute failure of BJP government,” tweeted Congress.

Measures to check cyber crimes in Banking System

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As per data reported by the Reserve Bank of India (RBI), the number of cyber crime pertaining to credit card, ATM, debit card and Internet banking shows a marginal increase of 4.4% from 13,083 in 2014-15, to 13,653 in 2016-17.

RBI has issued Cyber Security Framework in Banks, mandating banks to put in place a Board-approved cyber-security policy, which covers the risks from cyber threats and the measures to address/ mitigate these risks.

RBI has issued instructions to banks for reversal of erroneous debits arising from fraudulent or other transactions, and for Board-approved bank policy to cover customer protection, the mechanism of compensating the customer for the unauthorised electronic banking transactions, and display of the same on the bank’s website, along with the details of grievance-handling / escalation procedure. Under the Banking Ombudsman Scheme, if a customer does not receive any reply within a period of one month after receipt of representation by the bank or is not satisfied with the reply given, he can file a complaint before the Ombudsman, who can ask the bank to pay compensation of up to Rs. 20 lakh to the customer for loss, suffered by the customer due to an act of omission of the bank, and also compensation of up to Rs. 1 lakh for mental agony and harassment.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

Demonetisation: Supreme Court Warns Govt to End Cash Crisis

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The Supreme Court on Friday warned the government to find ways to end the cash crisis as people standing in long queues for hours every day may turn violent anytime leading to anarchy.

Brushing aside the government contention, the court made it clear that “It is a serious issue.” Since it affects the entire population, it said, “You cannot deny there is a serious problem. There could be riots.”

The bench consisting of Chief Justice TS Thakur and Justice AR Dave retorted to attorney general Mukul Rohatgi’s plea seeking directive to lower courts to stop hearing cases related to demonetisation. Once the high courts take up legal suits, millions of suits will move the courts seeking intervention to redeem their money.

The bench took exception to limit the daily cash exchange limit to Rs 2,000, after promising to increase it to Rs.4500 creating suspicions in the minds of people about the government’s ability to exchange their money in time.

“The government just did not have the capacity to print new currency notes. They should have taken this into account and taken steps to avoid putting people into untold harassment,” said petitioners.

“Daily labourers are not getting paid, tea garden workers are not getting their salaries, people in rural areas have to walk long distances to reach banks and ATMs only to be told that these have run out of cash. It is a serious situation. Transporters are suffering. Trucks are standing idle without cash. India is a cash-based economy and the government has hurt it badly by freezing cash circulation,” senior advocate Kapil Sibal said in the Supreme Court on Friday on behalf of the petitioners who have questioned the legality of demonetisation.

The next hearing will be on November 25.