In the wake of the rising number of coronavirus positive cases in the country, Indian banks are planning to suspend services in most branches. The Reserve Bank of India (RBI) and banks are chalking out a plan to close most branches to protect their employees from contracting the coronavirus infection.
The plan aims to have only one bank branch open every five kms in major cities, reported Reuters citing sources in the know. However, a finance ministry official reportedly said he was not aware of any such shutdown.
One of the sources told Reuters that under the plan in rural areas, banks will likely operate on alternate days with staff just focusing on the disbursal of welfare money to the poor. Almost 70 per cent of Indians live in the rural areas. “The general guideline is that branch operation should largely be for villages just to take care of those people who are not familiar with digital transactions," a senior banker with a state-run bank told Reuters.
Most of the transactions in India are still dependent on physical cash, especially in the rural areas. Hence, the bank branches are a lifeline to millions of poor who are still new to the digital world.
Currently, most of the banks have reduced their staff, changed timings and are promoting social distancing by asking customers to use internet banking and mobile banking facilities instead of visiting the branches. Under the lockdown norms, banks have reduced their working hours—from 10am to 2pm, instead of the earlier 5pm. Banks were also asked to undertake only essential banking services during the 21-day lockdown period.
At the same time, banks are informally making arrangements to ensure enough cash to be disbursed to the poor through Direct Benefit Transfer as announced by the Central and state governments over the past few days. "Informally, banks are talking to each other to cope up with a situation where there will be some rush for cash withdrawal because it is expected the government will provide cash for the poor directly into their accounts." The digital banking preparedness of all banks and interoperability of services are reportedly being worked out.