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Cash Still King 7 Years After Demonetisation; Banks' Cash Reserves Fell 15 Times In 2023-24 Alone

https://thesecretariat.in/article/cash-still-king-7-years-after-demonetisation-banks-cash-reserves-fell-15-times-in-2023-24-alone





UPI may have grown, but seven years after demonetisation, cash has again doubled in circulation. CSR norms may get an update along with tweaks in penalty under next government. Social security scheme for unorganised sector workers flounders five years after launch. Corporates may get 200 more Gati Shakti Terminals.

I’m Doubling In Circulation, Cash Is Still King 7 Years After Demonetisation

The cash in circulation has more than doubled since financial year 2016-17, the year of demonetisation and the launch of UPI, the Economic Times reported. This comes despite the phasing out of Rs 2000 notes.

The currency in circulation has more than doubled from Rs 13.35 lakh crore in March 2017 to Rs 35.15 crore in end March 2024. Significantly, the circulation has happened despite the central bank deciding to withdraw the Rs 2000 denomination banknotes from circulation from May 2023 which resulted in the central bank getting 97.83 per cent of Rs 3.56 lakh crore worth notes back into the banking system. Read more

Banks' Cash Reserves With RBI Fell 15 Times In 2023-24 Alone

The average fortnightly cash balances of banks with the Reserve Bank of India (RBI) fell short of the central bank's mandated cash reserve requirement (CRR) 15 times in the past year alone, the Economic Times reported, following an analysis of daily data released by the RBI.

Data going back to May 2021 showed around 30 more instances of a shortfall. The quantum of shortfall ranged from Rs 44 crore in the fortnight ended May 19, 2023, to larger sums such as Rs 6,820 crore in the fortnight ended August 11, 2023. Fortnightly CRR is one of the key regulatory reserve requirements set out by the RBI.

New CSR Norms On The Anvil, Proposal Also To Change Penalties

The Centre is studying a proposal to amend corporate social responsibility (CSR) norms for widening their scope and coverage besides reviewing penalties for non-compliance, the Economic Times reported.

SeRead morection 135 of the Companies Act requires firms of a certain size to annually spend at least 2 per cent of average net profits of previous three financial years on stipulated CSR activities. Failure to do so will make a company liable to pay a penalty twice the unspent amount, or Rs 1 crore, whichever is less. Even officers of a company in default are liable to a maximum penalty of Rs 2 lakh each. More here

Higher Cash Withdrawals At ATMs May Invite More Charges

Higher cash withdrawals at ATMs may soon attract an additional charge with the likely updation of costs, the Business Standard reported. The interchange fee, paid by the card-issuing bank when a customer swipes at another bank’s ATM, including at white-label ATMs, may be raised to Rs 20-23.

Also, differential pricing may be deployed for customers in underpenetrated centres to aid withdrawals by direct benefit transfer (DBT) beneficiaries. This is part of the recent deliberations between the Confederation of ATM Industry and the RBI. It comes amid fresh orders for ATMs and cash recycling machines hitting 45,000 between September 2023 and March 2024. More here

Social Security Scheme For Unorganised Sector Clocks 5 Million Members

The Pradhan Mantri Shram Yogi Maandhan (PMSYM) Yojana, meant to create a universal social security system for the vast informal sector, has logged just over five million subscribers in April 2024 since its inception in March 2019, the Business Standard reported.

While 4.3 million people had joined in FY 2019-20, merely 130,000 people joined the scheme in FY 2020-21, followed by 161,000 subscribers in the subsequent financial year. Close to 255,000 people had exited the scheme in FY 2021-22, thus further deteriorating the subscriber base, which added nearly 600,000 subscribers in FY 2023-24. This is against an enrolment target of ten million beneficiaries in each financial year starting 2020-21. More here

Railways Ready To Offer 200 More Gati Shakti Cargo Terminals

The Ministry of Railways is planning to offer another 200 Gati Shakti Cargo Terminals (GCTs) to corporate houses and freight operators for their rail-based supply chains, the Business Standard reported.

In her Union Budget speech of 2022-23, Finance Minister Nirmala Sitharaman had announced the Centre’s plan to set up 100 GCTs in three years. According to Railways data, 77 GCTs have so far been commissioned with an investment of Rs 5,400 crore from operators at an average cost of Rs 69 crore per terminal. The Adani Group, the JSW group, Nayara Energy, Container Corporation of India, and Indian Oil are among those operating these terminals. Read more

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