Behind the Banker’s Counter

India's bankers explain the challenges of managing demonetisation, it's loopholes and unintended consequences.

If I don’t answer my customers through a smile, and if I have the same grim face that he has, then there will definitely be a riot.

So says the manager at a public sector bank, after a hard day of handling long lines of frustrated customers. Vikram (name changed) has been through hell in the two weeks since the 1000 rupee and 500 rupee notes were demonetized.

He says he laughed when he watched some of the news coverage of bankers, in the initial period after demonetization. “People on news channels were expecting to get the new notes almost instantaneously after the announcement. When we found out about it at the same time they did – how can we calibrate the ATMs in time?”

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(Image: 7MB) Bankers spend most of their time convincing customers that they have no more money to give

With bankers kept out of the loop, the sudden withdrawal of currency left them without time to prepare. They approached the first few days with a positive attitude – wanting to give it their all to pull their customers through. But they did not anticipate the coming cash crunch.

“On the 5th day, I had gone for remittance to get 40 lakhs – but they gave me only 20 lakhs. I could not answer to my customers – regular customers who had come to withdraw their money. I could not give it to them. The very next day, I just got five lakhs. But the queue outside my branch had only grown bigger and bigger.”

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(Image: 7MB) Soiled notes have a dank smell – like they’ve been stashed away for a long time

Customers take out their frustrations on the bankers – who are shouted at, abused and sometimes even threatened. The cash crunch is ubiquitous – as the RBI only started printing the new notes in September. Banks turned to handing customers soiled and patched up notes – the smell of which adds to the problem of processing.

“I get a cough when I have to manage these. The smell is unbearable” says an employee, who helps count and sort the notes before reintroducing them into the system. With the RBI sending back smaller and smaller amounts each day, this public sector bank had even received one lakh’s worth in coins.

Every day, they run out of money before every customer can be served, and struggle to close the gates whilst explaining the situation. But their jobs don’t end once the gates are closed. The hard part comes next – tallying the amount deposited that has to be sent back to the RBI. Any misbalance will be deducted from the cashier responsible – a looming possibility in the high-stress environment of the last few weeks.

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(Image: 7MB) Even with the shutters down, bankers work on till late night inside

Backroom Business

Vikram alleges the system has exposed its loopholes, largely with discrepancies in the private sector.

“Since the starting day, till date, I haven’t seen any private banks run out of cash…some banks would do exchange basis only for their customers. I know instances wherein managers have gone directly to the account holders house and given the cash.”

Senior vice-president of the All India Bank Officer’s Confederation, D. Thomas Franco, concurs on the trend.

“Lots of people have been saying like that…but I don’t have adequate data on that. Only Reserve Bank data will verify…But by and large, there has been a saying like that. Private banks have done much more exchange than [public] banks.”

The constant stress has already taken its toll on the bankers. 11 have died on duty in the last two weeks, according to Franco. He has called for the resignation of RBI governor Urjit Pattel, saying the preparation for the demonetization was wholly inadequate, and that bankers should have known in advance, and insists that there is no need for secrecy.

As Vikram told us, the real leaks happen when cash is in transit to the banks, not at the banks themselves. “If from point A to B, they should take 15 minutes, they take 20 minutes. The other five minutes, they do their own stuff. On the transit, [cash] is diverting.”

While the situation continues, the bankers have all told us that all they want is for more cash supply to be able to serve their customers better – and to take leave once the dust settles.

“I can’t say no to anyone, no matter who it is. I learned saying no when I didn’t have cash with me. ‘No Ma’am, no sir, sorry, sorry, sorry.’ This was the only word that was there. These poor people that really wanted money – they never got any money. That number is growing every day,” said an audibly tired Vikram.

With frequent revisions and announcements by the RBI, the uncertainty has yet to fade for the bankers – who never know how much money the RBI will send the next day. As his employees walk out for their first full weekend in two weeks, Vikram appeals to them to show up early on Monday.

“Monday 9 a.m. Please be here by nine!”

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