Tamil Nadu: Banks receive tranche of Rs 500 notes; to disburse from Thursday

In a huge relief to people of Tamil Nadu hit by shortage of smaller denomination notes post demonetisation, banks in the state have received the first tranche of newly introduced Rs 500 notes and would start dispensing them to public from Thursday.

Many ATMs in the state have been calibrated to dispense the new notes which were expected to be in large circulation, senior officials said in Chennai on Wednesday.

"The Rs 500 notes which are expected to be in large circulation compared to the high value Rs 2,000 notes have reached Tamil Nadu. Some banks have received the first batch already. Some are receiving as we speak," an official said.

After the withdrawal of the old Rs 500 and Rs 1,000 notes under the demonetisation move, the Centre had released Rs 2,000 denomination notes.

However, people have been facing difficulty in getting change for the Rs 2,000 note in view of shortage of smaller denomination notes.

This has affected the trade, including small retailers and wholesale markets such as the vegetable market at Koyambedu here.

“We have received one box of Rs five crore worth of Rs 500 notes. Most of the ATMs have been recalibrated for the distribution. We will be dispensing Rs 500 from tomorrow,” a senior official of a nationalised bank said, while requesting anonymity.

Asked about delay in availability of the new Rs 500 notes, another bank official said, “while most of these denomination notes have already reached the banks in North India to meet the demand, we are getting them here now”.

Following demonetisation move, several people since November nine have been running from banks to ATMs to withdraw cash to meet daily expenses but stuck with the Rs 2,000 notes unable to get change for smaller transactions.

While the government capped withdrawal from banks at Rs 24,000, it was fixed at Rs 2,500 for ATMs.

Responding to a query by the Madras High Court, the Reserve Bank of India had last week submitted that it cannot disclose details regarding the timing of release of new Rs 500 denomination currency to the banks due to security reasons.

Meanwhile, the All India Bank Employees’ Association representing the private and public sector employees, has urged the Finance Ministry to direct Reserve Bank to issue revised guidelines enabling cooperative banks to take up banking operations.

About 65 per cent of the co-operative Banks out of the total 10,000 engage in banking business and handle about Rs six lakh crore towards working capital and deposits, said AIBEA, General Secretary, CH Venkatachalam.

Stating that the several district-level central cooperative banks across the country were not allowed to carry out the banking operations, Venkatachalam, in his letter to Finance Minister Arun Jaitley, said, “It is these base level organisations which deal with majority of the banking public in villages and were also the prime source of distribution of essential commodities.”