People all over the nation are having a hard time ever since the Prime Minister Narendra Modi announced that the high currency notes will not be considered a legal tender. A brave move taken by Modi to free the nation from the black nation, and to curb the corruption.
PM Narendra Modi did mention in his speech that the demonetization of high currency notes will cause some inconvenience to the people. The most impacted from this move are the poor people who don’t have a credit or debut card. People who are having a marriage at home or some function have been hit hard by this move.
Hundreds of people now line-up in front of banks from early morning to exchange and deposit their old notes which were banned from November 8 midnight on-wards. People reached the ATMs expecting they would be able to withdraw Rs. 2000 to meet their daily needs, but either the ATM was already empty or was not working.
Union Finance Minister Arun Jaitley, said in his press conference that people must remain patient, there is no need to panic, this is not a chaotic state. He regretted the difficulties that the common people have been experiencing due to withdrawal of high denomination notes. The inconvenience is temporary, but this demonetization will only prove to be beneficial in the long run term.
Changing the currency is an enormous task, it is a slow process. You cannot expect such a big cash replacement to happen in a mechanical way overnight. It will take two-three weeks more for all the 2 lakh ATMs to operate normally, we have to recalibrate all the ATMs across the country for the new Rs. 500 and Rs. 2000 notes. This is what Finance Minister Arun Jaitley said in his press conference in New Delhi on Saturday.
The government is constantly monitoring the entire operation. The RBI and banks have arranged enough currency notes to replace the Rs. 14 lakh crore rupees present in Rs. 500-1000 notes that have became obsolete.
Every ATM needs to be recalibrated to accommodate the new denominations. Let’s understand this recalibration.
An ATM has drawers called cassettes, these cassettes are filled with money. Normally an ATM has four cassettes. The usual way is to fill 2 cassettes with Rs. 1,000 notes, one with Rs. 500 notes and one with Rs. 100 notes in an ATM (some ATMs have 2 cassettes of Rs. 100). The maximum capacity of a cassette is 2,000 notes.
These cassettes are calibrated according to a specific currency. It works with a software placed inside, it uses the features of the currency such as weight, dimensions, design to dispense them when a user instructs a withdrawal.
So since the ATMs are not configured for the new Rs. 500-2000 notes, this means the Rs. 1000 cassette, the Rs. 500 cassette will remain empty. Only the two Rs. 100 cassettes will be filled.
Let’s calculate the total money which now will be present in an ATM.
2 cassette * 22 packets * 100 notes = 4400 notes
4400 notes x Rs 100 = 4 lakh 40 thousand rupees
So only 4 lakh 40 thousand will be available in an ATM. Now for the daily limit.
4,40,000/2000 per day limit = 220 people can withdraw money from a single ATM
Scenario where all 4 cassettes will be used for dispensing Rs 100 notes
Some ATMs have 4 cassettes of Rs 100 notes so in such cases an ATM can store 8800 notes.
8800 notes x Rs 100 = 8 lakh 80 thousand rupees. In this scenario, total of 440 people can withdraw money from a single ATM.
This means that only 220 people (& in some ATMs 440 people) will be able to withdraw money from a single ATM.
So if you see any line outside the ATMs with 200 people standing, don’t join them. You’ll only end up wasting your time. But don’t worry this inconvenience is temporary, think of all the good we all are doing for our nation. Let’s make a new India, a corruption free India for the coming generations.
