Business Today

City left high & dry as cash flows to farms

With the government deciding to give priority to the farm sector in the allocation of new currency notes several banks in Delhi and NCR have not received any cash for the last four days as a result of which there has been no respite from the cash crisis for consumers.

S P S Pannu   New Delhi     Last Updated: November 26, 2016  | 10:02 IST
City left high & dry as cash flows to farms

With the government deciding to give priority to the farm sector in the allocation of new currency notes several banks in Delhi and NCR have not received any cash for the last four days as a result of which there has been no respite from the cash crisis for consumers.

An ICICI Bank manager told Mail Today on Friday that the branch had run out of cash on Monday after which it has not received any more currency notes.

"We have been sending back our customers who came to withdraw money this week and it is getting increasingly embarrassing for us," he lamented.

A Finance Ministry official told Mail Today that the government is giving priority to farmers in supplying new currency as the rabi sowing season is in full swing. The situation is expected to ease soon as new Rs 500 notes have also reached banks, he added.

With the government now banning the use of old Rs 1000 notes at petrol pumps and Mother Dairy outlets the situation has in fact taken a turn for the worse as far as consumers are concerned.

While some money is being supplied to ATMs it runs out within an hour or two leaving many people standing in the queue high and dry.

Banks have been giving out mainly new Rs 2,000 notes which pose a problem for consumers and retail stores alike as there is not enough change going around.

Most bankers are of the view that the sequencing in the production of new notes should have given precedence to 100 and 500 rupee notes instead of the Rs 2,000 notes which are not liquid enough.

Cyber danger E-wallet companies have seen a sudden surge in business in the wake of the currency crisis but the issue of cyber security needs to be kept in mind amidst the frenzy for online payments.

Paytm one of the biggest players in the mobile wallet space, for instance, has clearly ended up jumping the gun.

The company had amid much fanfare on Wednesday launched a mobile app that allowed small shopkeepers to accept payment through cards as a way out of the current cash squeeze. Buyers were expected to feed their credit card details on to the mobile phone app of the shopkeeper to make the payment.

Pytm had assured that the PIN details would go directly to the server of the bank from which the payment would be made. However, leading companies in the card business such as Mastercard and Visa have red flagged the modus operandi as a grave security risk to buyers since the credit card details would be fed into mobile phones belonging to others. This has made Paytm see some sense and the company on the very next day scrapped the launch of the new app.

"Based on some suggestions from the industry, we have decided to add additional certifications and features before making it available to merchants. We will re-launch this product as soon as we have updated the product," Pytm said in a blogpost.

The Shekhar Sharma founded e-wallet company has done well in recalling the product as it was only in October this year that as many as 32.14 lakh debit cards of various public and private sector banks were reported to have been 'compromised' by cyber malware attack emanating from the Yes bank ATM system.

Leading banks including SBI , had recalled a number of cards while many others such as ICICI Bank blocked the ones suspected to have been compromised and asked their customers to change PIN (personal identification number) before use.

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