Ensure 40% Of Cash Supply To Rural Areas: RBI
By Vamsi Krishna N : 04-Jan-2017
The central bank, Reserve Bank of India (RBI), directed all the banks to ensure that every day, the rural areas are supplied with 40% of cash, and also that the currency chests and automated teller machines (ATMs) are adequate with Rs. 100 and Rs. 500 denominated notes.
This notice has been given to the banks considering the current situation where the money supply to the banks is not adequate according to the requirements of the rural population.
The banking regulator, in this regard, has said that, “bank notes, being supplied to rural areas, at present, are not commensurate with the requirements of rural population.”
The RBI also notified the banks issued in a circular that the banks should advise their respective currency chests to increase the supply fresh notes on a priority basis to the branches of Regional Rural Banks (RRBs) in rural areas, District Central Cooperative Banks and commercial banks, White Label ATMs in rural areas and post offices in rural areas.
According to the circular issued by Reserve Bank of India (RBI) to the banks, “Chests should issue bank notes in denominations of ?500 and below. In particular ATMs, including white label, may be issued ?500s and ?100s and among ATMs category, Off-site ATMs should be allocated higher proportion of cash as against on site ATMs as they are more important in last mile currency connectivity.”
The currency chests which are about 4000 in the country are advised by the RBI to issue currency notes in Rs 500 and below denominations. Most of the currency chests in the country are managed by the public sector banks. The RBI further advised the currency chests operating in a district level to maintain the cash balances on a weekly average basis.