Exclusive: On Cash Crunch, Need '5 Days Of Patience', Says SBI Chief

New Delhi: The government's new decision to use indelible ink to mark those who have traded old notes for new ones will go a long way towards helping cut down the lines at banks, said Arundhati Bhattacharya, who heads the country's largest lender, the State Bank of India or SBI.

Ms Bhattacharya said the main problem for now is that ATMs are either not functioning at all, or running dry too quickly. However, she said, the machines are "being recalibrated on a war footing" to be able to dispense the new notes, which need different-sized trays than the older currency.

Last week, Prime Minister Narendra Modi ordered the withdrawal of 500 and 1,000 rupees notes from circulation to fight tax evasion, corruption and forgery, an initiative praised by experts and entrepreneurs. Because the government only gave people a few hours' notice before the old notes were cancelled, lakhs of people have been left stranded, especially the poor who live in an all-cash economy.

On the sixth consecutive day of snaking lines around bank branches, the government today said that it will, like in elections, use indelible ink to ensure an individual does not bust the daily quota of Rs 4,500 when swapping old notes for new ones.

"Indelible mark idea will contain the misuse," said Ms Bhattacharya to NDTV, explaining that "the panic will stop when ATMS stop running dry." She stressed that the shortage of the new Rs 500 notes, important for daily transactions, is key to the current problem. "Rs 500 notes have just started coming (into ATMs)," she said, adding that once the "supply is restored properly," the limit of Rs 2,500 per card per day could be increased at cash machines.

The SBI chief said what is needed is "five days of patience" and observed that in some smaller cities, queues have begun shrinking, while larger cities with bigger migrant populations will take longer to see some improvement.