Reported by: banking|Updated: November 14, 2016
As much as Rs 2 trillion have been deposited in banks in India following the government announcement of demonetizing Rs 500 and Rs 1000 currencies, according to estimates. The banned notes constitute around 86% of the total currencies in circulation and the government action put extreme pressure on the banking system in the country with ATMs not able to meet the demand for cash and bank branches finding it extremely difficult to handle the situation where people queued up right from morning either to exchange the banned notes or to deposit them before the deadline of 31 December 2016 set by the government ends. The finance ministry said on 12 November that more than 70 million transactions were recorded through midday that day. The central bank assured citizens that there is enough currency in the currency chests to meet the demand for cash but the problem stems from ATMs which need recalibration in order to handle the new Rs 2000 and Rs 500 notes. At present, the ATMs are dispensing only Rs 100 and Rs 50 notes. Finance minister Arun Jaitley said the situation is bound to improve in about two weeks. The government also eased the situation by allowing people to withdraw up to Rs 2500 per day from ATMs and Rs 24,000 in a week from banks.