Despite claims by India’s central bank that it had stepped up the cash supply, millions of government and private sector employees failed to get paid on Thursday.
There were reports of painfully long queues at banks and ATMs to draw salaries and pensions on the first pay day since Prime Minister Narendra Modi’s shock decision to take 500 rupee and 1,000 rupee banknotes out of circulation on November 8.
In many cities the main branches of various banks witnessed an unprecedented rush with customers hoping they may have a greater supply of banknotes than smaller branches in the suburbs.
Many bank branches across the country had deployed extra manpower, but the lack of cash rendered them ineffective. Even the customers who got cash were upset because banks resorted to cash rationing.
Meanwhile banks are sending bulk text messages to their customers to download mobile wallet apps to make digital payments for their day to day expenses.
The current cash crunch is proving to be a windfall for digital wallet companies like PayTM and MobiKwik, with both companies claiming their overall transactions have gone up 200%.