Hyderabad: The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 has not only left banks, but also ATMs, dry across the city.
Bankers claim that the recent FDRI Bill has created panic among customers who are withdrawing their deposits from their respective bank accounts, and instead saving it in cash at home.
Since customers are reluctant to deposit cash in the bank, the cash flow across the city has stopped.
National president of the All India Bank Employees Association B. Seetha Rambabu confirms that most of the city's banks are running out of cash and attributes it to the insecurity of customers because of the FRDI Bill.
He said that bank customers have lost faith in the banking system and are keeping cash in home or bank lockers. Banks are thus not receiving cash to deposit in ATMs.
“RBI has circulated about Rs 5 lakh crore in 2,000 denominations, but it is not in circulation due to continuous withdrawals by customers since the past three weeks, not only in the city, but across the country,” he said.
He said that banks have been paying out in higher denominations, but are not receiving deposits in return. Making matters worse is that RBI has stopped printing Rs 2,000 notes.
“That even the Telangana government has no cash to pay Rs 6,000 crore for the capital subsidy scheme in the Kharif season shows the severity of the problem,” he said.
P. Venkatramaiah, general secretary of the Bank Employees’ Federation of India for Andhra Pradesh and Telangana, says the adverse effects of demonetisation continue to linger.
He says that customers have lost faith in the banking system for other reasons too.
“Why will a customer deposit cash in banks if the banks demand additional charges for regular deposits?”
Banks are demanding 10 per cent additional charge for cash deposits of more than Rs 50,000; there was no charge earlier.
Banks are even demanding charges for furnishing bank statements and other services, which has angered the public.
He opined that the FDRI Bill was the major reason why customers have lost faith in the banking system.
Mr Venkatramaiah said that in order to encourage digital transactions, the government has not been depositing cash in ATMs and will eventually shut all ATMs in the city.
