No cash respite in cities, govt to turn focus on rural liquidity

There was no respite on Tuesday for harried depositors. The endless wait at banks and ATMs continued even as 82,500 ATMs, which account for about 40 per cent of cash vending machines in the country, are believed to have been recalibrated to dispense new high-security currency notes of 500 and 2,000 rupees.

Out of 2.2 lakh ATMs, 82,500 were recalibrated till Monday evening.

These ATMs have been reset as per the direction of a task force set up by the government to expedite the process, Rituraj Sinha, President Cash Logistics Association of India, said.

These have been recalibrated in such a manner that regional balance is maintained while giving priority to rural areas, Sinha, also a member of the task force headed by RBI Deputy Governor S S Mundra said.

With the recalibration, ATMs are now stocking 50-60 lakh cash and are able to cater to higher demand. 

Meanwhile, fighting the cash-crunch caused by demonetisation, the government on Tuesday said its focus would now be on rural areas and more measures would be announced for farmers, as the situation was normalising in urban areas. “The situation is normalising in the urban areas. In the next few days, the focus will be on the rural areas so that farmers have enough funds because it is rabi sowing season.

Few decisions were taken on Monday night which will be made public today,” Finance Minister Arun Jaitley said while addressing the BJP MPs at a parliamentary party meeting here. The Minister said the credit flow from banks would also go up for various activities including agriculture as a huge amount of cash due to demonetisation was deposited in the banking system.

Emphasising that demonetisation had a direct relation with the poor, with poverty and with poverty alleviation, Jaitley said this move (of demonetisation) could result in a huge jump in public spending in rural areas especially for poverty alleviation.

Assuring that once this remonetisation or the process to provide alternative currency reaches a reasonable level, he said the government would ease all restrictions but till then there would be a difficulty for some time.

The Minister said the currency cannot be released all of a sudden, it will be done in a calibrated way and for that, the focus was primarily on rural areas. “The remonetisation is being done in a calibrated way for coming weeks. The focus is only on rural areas,” he added.

On Monday, the Finance Ministry had permitted the farmers to use old Rs 500 notes for purchasing seeds from any state or central government outlets and agri universities.

Meanwhile, Jaitley said that India was working on a framework to check flow of illicit money routed through Singapore. He said that after revising the tax treaty with Mauritius and Cyprus to check the flow of illicit cash, India was in talks with Singapore also.