Cash crisis continues to dog NE as bank-penetration far off average

The cash crisis bedeviling the people after the November 8 demonetization continued to persist in several Northeast states, especially in rural and remote areas.

Sample this: There are just 9 bank branches in Northeast at every 1000 sq km whereas the national average is 26. Although the data is of March 2010, it could very well be known how Northeast has seen financial inclusion evolve in the area. In Arunachal Pradesh, the penetration is 1 branch every 1000 sq km whereas in Tripura it is 22.

financial-inclusion-in-northeast-india

“We are yet to get sufficient new Rs 2,000 denomination currency as well as old Rs 100 and smaller denomination notes, causing serious problems in dealing with the people. We are in touch wth the RBI to get sufficient notes of varied denominations,” a top official of United Bank of India (UBI) told IANS on the condition of anonymity.

“No bank in the north-east has as yet received the new Rs 500 note,” he added.

The state-owned UBI is a lead bank in several north-eastern states and has the largest number of chests to stock the currencies.

The cash crisis is serious in remote and rural areas, where most banks have no currency notes and automated teller machines are non-functional.

As majority of ATMs either remained closed or functioned at a very slow speed due to technical problems on Monday for the sixth consecutive day in the entire north-eastern region, people thronged banks since early morning to exchange the scrapped currency notes with new ones or to withdraw money.

In Mizoram, long queues of men and women were seen across the state even before the banks opened at 10 a.m. and at post office counters for replacement and withdrawl of notes.

Wine shops in Mizoram also bore the brunt of the cash crisis with sales declining sharply.

A Mizoram Finance Department official said they held meetings with top bank officials and asked them to deal with the cash crisis and resolve the problem at the earliest.

In Silchar (in southern Assam), State Bank of India’s Assistant General Manager Himanka Bihari Roy and UBI’s Chief Regional Manager Hirendra Narayan Ghosal urged the people in southerm Assam not to panic.

Most government offices in Tripura, Mizoram and southern Assam, including electricity departments and municipal bodies, refused to take old Rs 500 or Rs 1,000 notes against various payments and taxes, forcing some people to make payments through cheques and online.

“Besides people living in the rural, remote and semi-urban areas, businessmen and traders are the worst-hit. The poor, including labourers and migrant workers are in an awkward position due to cash crisis,” trader Satya Narayan Kundu said.

Kundu said that business volumes have dipped more than 50 per cent in cities and urban areas and over 60 per cent in rural and remote areas.

“There is no ray of hope as to when the situation will improve. Bank officials are saying the situation will get better soon, but we are not ready to believe them,” he added.

Reserve Bank of India (RBI) Assistant General Manager Sekhar Nath Chattopadhyay, in a statement issued in Agartala, urged people to go for electronic and non-cash mode of payments.

“Those unable to exchange specified bank notes on or before December 30 will be given an opportunity to do so at specified offices of the RBI,” Chattopadhyay said.

Data source: Here

Have something to add to the story?
mm
SpeedNews Desk at EasternFeed has the strongest nose for news. EasternFeed is a Guwahati-based new-media house with focus on disseminating news through the newest form of media. Here's an effort to bring together the best of the news from across the Northeast, in a fresh new format.