Even as bankers are working tirelessly to cater to crowds outside bank branches, Shikha Sharma, the chief of India’s third-largest private sector lender Axis Bank, feels that normalcy will return in a couple of weeks. In an interview with Saloni Shukla, Sharma also hailed the government’s demonetisation move and said that it was meeting its intended objective. Edited excerpts:
Does the frenzy for withdrawal, deposit, exchange continue or has it improved in the last one week?
The queues are certainly getting shorter, even if you drive across the city you will see that, you don’t have to solely rely on me. And even if I look at the volume of transactions being done, it was spiking but now it has stabilised and coming off from its peak. So, I think things are normalising.
Some bankers expect that queues will go up again in December when the salaries are disbursed. How long before things settle down?
Yes. See it depends upon how quickly RBI supplies currency especially the Rs 500 that is the real challenge.What you really can do to help us is that now there are no charges on ATM withdrawals and so, if customers don’t withdraw their requirements for the month till they get the salary, but just withdraw a little bit, that will help us tide over the currency shortage situation and in another couple of weeks everything should calm down. But I think if everybody does their little bit to tide over a difficult situation then we would have pulled off a great feat for the country.
ATMs are running dry. How are banks dealing with it? Is there enough currency supply? How is ATM recalibration progressing?
The basic issue is that we have to get adequate supply of right combination of notes that is Rs 2,000, Rs 500 and Rs 100. While Rs 2,000 are coming, if you have that note you can’t use it at all places because people are not getting enough change back. So RBI has started supplying Rs 500 in the last couple of days. The ATM recalibration is proceeding quite well. We just have to make sure that sufficient cash flows through it.
Have you faced a lot of customer complaints at your branches due to cash running out?
I am so proud of the common man and of our bank staff who are coping up with the frontline customer interaction. If you have a little conversation and explain it to people, they understand. I will tell you a story about my driver. He had a cremation in his family and he needed cash. But, when I explained him that he will be able to exchange his cash over a couple of days, the calmness with which he dealt with it and looking at the bigger picture and saying that if it is for the greater good of the country I will live with the short-term inconvenience, I think that has come through very strongly from the common man.
The government has faced a lot of criticism from opposition. Will demonetisation meet its intended objective?
I don’t want to get into a political controversy over here on right or wrong etc. But, if we look at the macro-objective that was sought to be achieved, one was to get the parallel economy into the mainstream economy, and handle fake cash getting funnelled in terrorism, both those are large and important goals for the country. If there is some short-term pain that has to be taken, I think the common man has by and large felt that I will take that pain if it is for the greater good and that is what I am so proud of.
Banks have mobilised huge deposits; you have cut your MCLR as well. From here, where are the deposit and the lending rates headed?
A lot of banks have started cutting deposit rates. On the deposit side there will be some stickiness because till small savings rate come down further deposit rates may not come down a lot. On the lending rates, it will slowly start to come down.