Demonetisation of ₹500/1,000 notes has resulted in serpentine queues being formed outside bank branches since November 9 for withdrawing cash. However, Rajnish Kumar, MD, (National Banking Group), State Bank of India, urged people not to hoard cash but to spend it, for money to remain in circulation.Excerpts from an interview:

How long will it take to restore normalcy?

Queues have definitely come down in most urban areas. Branches in the periphery of cities, semi-urban and rural areas are still crowded.

We are issuing tokens for people to come at the appointed hour besides pushing more money through branches, business correspondents, cash at PoS, post offices and cooperative banks.At ATMs, we were doing 75 lakh transactions prior to November 8. We did the same in the last three days.

On Saturday, we did 94 lakh. However, average withdrawal size has come down from our average of ₹4,000.

Cash dispensed has come down from ₹2,600-2,800 crore per day to ₹1,200-1,400 crore due to restrictions on withdrawals.

People queue up because they feel ATMs will run out of cash. We already have 3.24 lakh PoS terminals and we plan to have another one lakh as soon as possible. It is the best time for us to push digital channels — PoS/wallets.

People are either stuck with ₹2,000 notes or with change such as 1,000 coins of ₹5 each? What is being done about this skew?

ATM-fit ₹100 notes are going only to ATMs. Smaller notes — ₹100/ 50/20/10/5 — are being used predominantly in rural and semi-urban areas. ₹2,000 notes are being pushed everywhere. So, there may be temporarily some demand-supply mismatch.

It will take time to replace ₹14 lakh crore worth of notes in denominations of ₹500 and ₹1,000. In certain cities, ₹500 notes have been dispensed. People should spend cash and not hold it as it is not the right thing to do.

Currency should be in circulation.

Use your card/ mobile wallets in cities. It will take time for digital to pick up in semi-urban/ rural centres as the requisite infrastructure, besides education on digital payment modes have to be done.

What will be the proportion of transactions — digital to physical by the end of FY17?

Earlier 43 per cent were at ATMs, 35 per cent were at digital (net, mobile, debit cards) and the remaining 22 per cent were at branches.

We would try to bring down the share of ATM, increase digital but temporarily the share of branches may go up, as more people are coming to branches, till normalcy is restored.

How will you ward off possible cyber attacks given that the proportion of electronic transactions will go up?

We have a 24*7 security operations centre which watches everything. We spend about ₹1,000-1,200 crore every year on our IT.

Why should ATMs be re-calibrated?

ATMs have to be configured for the new dimensions of the notes (size and thickness). This requires re-calibration, besides re-configuring for the denominations — earlier we had ₹1,000, now we have ₹2,000 notes.

That happens ATM by ATM. At the back-end it is a 24-48-hour job which decides the dispensing algorithm.

Will banks dispense smaller denomination notes in the future?

Going forward, it will be 2,000, 500 and 100. In certain places depending upon usage patterns even ₹50 notes are dispensed.

The maximum demand is for ₹100 and ₹500 today. For smaller denominations, one has to go to the branch.

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