Monday , December 5 2016

Currency Woes Likely To Continue For People in Andhra Pradesh

People of Andhra Pradesh will have to endure the “currency woes” for some time to come as the state government has given up hope of either getting more cash from the RBI into the banks or introducing cashless transactions on a huge scale in the near future.

currency-woes-likely-to-continue-for-people-in-andhra-pradesh
Currency Woes Likely To Continue For People in Andhra Pradesh

I have required another Rs 5,000 crore, mostly in Rs 100s. But I have no hope we will get the money, CM Naidu said.

Amaravati: People of Andhra Pradesh will have to endure the “currency woes” for some time to come as the state government has given up hope of either getting more cash from the RBI into the banks or introducing cashless transactions on a huge scale in the near future.

Chief Minister N Chandrababu Naidu, who for the past few days has been constantly studying the situation with bankers and state government officials, told the State Level Bankers Committee that “I have no hope that we will get more currency notes of smaller denominations”.

After two letters from the Chief Minister, the RBI have  dispatched Rs 2,000 crore worth currency notes to state two days ago.

Of this, the new Rs 2,000 notes amounted to Rs 1,500 crore, a new Rs 500 notes amounted to Rs 90 crore, Rs 100 notes Rs 400 crore & the rest of other smaller denominations.

“I have pursued another Rs 5,000 crore, mostly in Rs 100s. But I have no hope we will get the money,” Chandrababu remarked at the five-hour meeting with the bankers and state officials last night.

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At the same time, he wanted to introduce a Point of Sale (PoS) swiping machines to enable cashless transactions, using credit & debit cards, but the companies which supply these machines told the Chief Minister that it would take more time to make the gadgets available as per the demand.

Besides, the Chief Minister wanted the 14 per cent service tax and 1.25 to 2.25 percent service charge on card and the  mobile transactions waived off so that people could go for cashless transactions.

Now either the merchants or consumers were bearing these service charges which was proving a “disincentive”, he noted.

The CM also wanted the Centre to supply PoS machines at a subsidy of 80 percent to merchant establishments.

“The costs involved in printing and for distributing the currency and also the wear and tear are very high compared to benefits of cashless transactions. So the RBI must compensate in this form,” Chandrababu pointed out.

But, there was no firm assurance from the banks on a service charge, while the service tax has to be waived by the Central government.

The state government wants to introduce the PoS machines in certain departments that involve currency transactions with the public.

The State Road Transport Corporation requires the rythu bazaars 80, 2,500 PoS machines, tourism department 100 and Mee Seva centres 5,540.

Besides, 16,452 swiping machines are required for as many villages to ensure transition to a cashless economy, according to Finance Secretary K Sunita.

Verizon, is one of the companies that manufactures and sells PoS machines to banks, said it could supply 1.20 lakh gadgets by the end of December.

Ingenico, the another company in the same business, too was ready to supply those many machines by the December end. But they have to cater to a pan-India market.

With RBI coming out with the fresh guidelines that the PoS machines have an integrated biometric scanning system, deployment of these gadgets can get further delayed.

Though, the Chief Minister set bankers a 40-day deadline for rolling out cashless transactions “to an extent possible”, even as he said that all government transactions would be made through online from December 1.

Tags: note ban, demonetisation, Chandrababu Naidu, India, Andhra Pradesh, Amaravati

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