Small businesses brace to meet payroll deadline

Mangaluru, Nov 27 (DHNS): Restaurants and provision stores here have switched to an informal credit arrangement.

The coastal districts of Mangaluru and Udupi don’t have Rs 500 notes in circulation yet. Lead bank manager Raghav Yejamanya expects supplies from Monday.

A bank source said a majority of ATMs were yet to be calibrated, and thus not prepared to receive Rs 500 notes.Shopkeepers are accepting cheques from regular customers, and marking dues on chits.

Some restaurants are also offering credit. “If the customer is a regular, he can update his accounts and continue to eat here,” said a cashier.

Suresh, boat owner in Malpe, is under pressure from his workers. “I pay them a partial salary for their daily expenses. This time, I will pay them their dues once the situation improves,” he says.

Informal credit

Mohammed, who sells fish, was accepting scrapped currency till Friday.

He is thinking of an informal credit arrangement on the lines of the restaurants and the provision stores.

Scrapped currency

At least one company is giving its salaries in scrapped currency. “I had no option but to take it,” an employee said. He has received Rs 20,000 in banned notes.

Trawl Boat Fishermen's Association President Nithin Kumar says his trade had been getting by, with co-operative societies accepting scrapped currency for diesel till Friday. “We will know the real problems next week,” he says.

Demonetisation has hit fisherwomen who go out and sell their catch. “Returning change is not easy,” he says. The owner of a printing press is switching to bank payments.

“I have asked all my employees to open accounts so that I can issue cheques or pay them through online money transfers,” he said.

Small businesses brace to meet payroll deadline

The impact of demonetisation is set to get more visible in the coming weeks as small business establishments that deal mainly in cash prepare to pay their staff. While the liquidity crunch has eased a bit in Bengaluru, small towns still reel under cash shortage.

A senior manager at Canara Bank said that people with low salaries and those paying house rent by cash would be the most affected, followed by senior citizens, especially pensioners.

H V Rai of the All India Bank Employees’ Association, however, said the problem was not acute, though he conceded that some cash shortage was bound to persist for sometime.

S K Srinivas of the All India Bank Officers’ Association sees a “calculated logic” behind the cash flow. “There is no disparity in cash flow and distribution. They are purely based on artificial intelligence that tracks the inflow and outflow of cash into bank branches depending on their requirement.” All head offices usually rely on a computer programme to do this work, he added. 

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