Five Kerala bankers share their thoughts on demonetization | Demonetization of Indian banknotes 2016

November 8, 2021 marks five years of demonetization in India. To get a review of how the banks handled the contingent situation, what they went through and how they perceive demonetization now, approached senior officials from different banks in Kerala who were involved in the demonetization. process. As they are not authorized to speak officially about the matter to the media, their names have remained anonymous.

The fate of a beggar

According to an official who retired from the Syrian Catholic Bank as a bank manager, customers encountered the plight of a beggar during the demonetization. The manager, who was at the time in a rural branch in Thrissur district, was saddened by the ordeal facing the commoners. “Some bankers have complained that the public is furious with them because of the decision. But in my experience, people were cooperative because they knew that the contingency was due to the sudden decision of the government and that it had nothing to do with the banks. There were restrictions on the amount of money allowed to an individual per day. Even to buy food, medicine or treatment, many had no money. It was difficult to prioritize people based on their concerns. Many have collapsed after standing in long lines. Although they have money, they have encountered the plight of a beggar, ”he said.

He also added why it has become catastrophic for small farmers and traders. “In some branches, the majority relied on cash transactions and even the rich didn’t go for options like Demand Draft. Many were unfamiliar with digital banking methods, ”he said.

Demonetization experience worse than Covid

Not only the withdrawal and exchange, other allied services were almost suspended, putting another section of customers in difficulty, said a director of Bank of India. “The stipulation of the RBI was to prioritize withdrawal and exchange and to ensure smooth management of demonetization. Anyone submitting a copy of an ID for ticket exchange is permitted and does not need to be a customer of the bank. The crowd to be addressed was large, ”he said. He stressed that the staff were cooperative and ready to respond to the concerns of individuals. According to him, although the Covid-19 pandemic was a new experience for bankers, many of them still believe that the demonetization experience is far more formidable than the new situation.

A black chapter

An official who worked as a senior executive and branch manager of the Federal Bank branch in the Ernakulam region during the demonetization said this period was a dark chapter in the history of India’s banking industry. He detailed the ordeal suffered by the employees of the bank. “Some of us worked from 8:30 am to 3:30 am. We were not sad about the amount of work, but the lack of support from the government apparatus due to the poorly planned execution of demonetization. The RBI issued banknotes in currency vaults at various locations. This is where the allocation is made for each bank and branch. Even after two weeks, the currency vault’s cash supply was not in tandem with demand. The situation was such that, if in a branch where transactions worth Rs 25 lakh take place, the supply available from the safe will only be Rs 2 lakh, ”he said.

The official claimed that despite promising words applauding the bankers’ efforts during monetization, the government was indifferent to their concerns. “The Modi government, in return for our efforts to manage the contingency, has ensured that the salary scale review for bank workers will happen quickly. Curiously, it was during this regime that the revision of the salary scales was delayed without precedent. And even this deferred salary review was not favorable to employees, ”he said.

Neglected rural population

Meanwhile, some officials have said the demonetization goals are actually ambitious. “I am not against the two fundamental goals of demonetization – the crackdown on black money grabbers and the digitization of the economy,” said a former senior executive at South Indian Bank. But he stressed that in order to crack down on black money grabbers, the innocent ordinary man should not have been disturbed. “Likewise, in a country with a large rural population, digital infrastructure must be equipped first. People should be aware of and master digital technology before implementing such ambitious plans, ”he added.

Towards cashless transactions

According to an official who was responsible for a semi-urban region at an SBI agency, demonetization has imbued the next generation of digital banking. “Any other social innovation will have drawbacks and achievements. We have to consider the long term impact. Unlike the older generation, young people are now turning to digital methods. Demonetization has contributed to this trend. The future lies in cashless monetary transactions and many countries have already achieved this, ”he said.

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