Five bankers from Kerala share their thoughts on demonetisation

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November 8, 2021 marks five years of demonetisation in India. To have a review on how the banks handled the contingent situation, what they experienced and how they perceive demonetisation now, approached top officials from different banks in Kerala, who were involved in the process. As they are not authorised to talk to the media about the matter officially, their names have been kept anonymous.

A beggar's plight

According to an official who retired from Catholic Syrian Bank as Bank Manager, the customers encountered a beggar's plight during demonetisation. The manager, who was in rural branch in Thrissur district at that time, was saddened by the ordeal faced by the commoners. “Some bankers complained that the public was raging against them over the decision. But in my experience, the people were cooperative as they were aware that contingency was due to the government's sudden decision and it has nothing to do with the banks. There were restrictions on the amount of money permitted to an individual in a day. Even to buy food or medicines or treatment, many had no money. It was difficult to prioritize the people based on their concerns. Many collapsed after waiting in long queues. In spite of having money they encountered a beggar's plight,” he said.

He also added why it turned catastrophic for small farmers and traders. “In some branches the majority were relying on cash based transactions and not even rich people were opting for options like Demand Draft. Many were unaware of digital banking methods,” he said.

Demonetisation experience more worse than Covid

Not just withdrawal and exchange, other allied services were almost suspended, putting another section of customers in trouble, said a manager of Bank of India. “The stipulation from the RBI was to prioritize withdrawal and exchange and ensure smooth handling of demonetization. Anyone submitting a copy of identity proof for exchanging notes is allowed and they need not be a bank customer. The crowd to be addressed was high,” he said. He pointed out that the staff were cooperative and were ready to address the concerns of the individuals. According to him, though Covid-19 pandemic was a new experience for bankers, many of them still feel the demonetisation experience is far more terrific than the new situation.

A Black chapter

An official who was working as a senior manager and branch head of Federal Bank’s branch in Ernakulam region during demonetisation said the period is a black chapter in the history of Indian banking sector. He detailed about the ordeal underwent by the bank employees. “Some of us worked from 8:30 AM to 3:30 AM. We were not sad by the amount of work, but the lack of support from the government machinery due to the poorly planned execution of demonetisation. RBI issued notes to currency chests in different locations. It is from there allocation for each bank and branches are done. Even after two weeks, the supply of cash from currency chest was not in tandem with the demand. Situation was such that, if in a branch where transactions worth Rs 25 lakh occur, then supply available from the chest will be mere Rs 2 lakh,” he said.

The official alleged that despite the promising words applauding the efforts of bankers during monetisation, the government was apathetic to their concerns. “Modi government in return to the effort we took to handle the contingency assured that pay scale revision of the bank employees will happen promptly. Strangely, it is during that regime pay scale revision got unprecedentedly delayed. And, even that delayed pay revision was not employee-friendly” he said.

Rural population neglected

Meanwhile, some officials said that the objectives of demonetisation were in fact ambitious. “I am not against the two core objectives of demonetisation--clampdown on black money hoarders and digitalisation of the economy,” said a former top executive of South Indian Bank. But he pointed out that to clamp down on black money hoarders, innocent commonman should not have been bothered. “Similarly, in a country with a vast rural population digital infrastructure should be equipped first. The people should be sensitized and digitally literate before implementing such ambitious plans”, he added.

Move towards cashless transactions

According to an official who was a manager of a semi-urban region in a SBI branch, demonetisation imbibed new generation to digital banking. “Every other social innovation will have some drawbacks and achievements. We have to consider long-term impact. Unlike the old generation, youngsters now are switching to digital methods. Demonetisation has contributed towards this trend. Future lies in cashless money transactions and many countries have already achieved that,” he said.

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