Andhra Pradesh Chief Minister N Chandrababu Naidu on Wednesday said that the state had asked banks to pay Rs 10,000 in cash for the salaries of all government employees.

Naidu said that the state was making arrangements to solve the cash-crunch rising from the lack of small currency since the demonetisation of Rs 500 and Rs 1,000 notes.

The banks were directed to make separate counters for employees and if necessary function till late hours.

Naidu also asked people not to panic, and that the state was monitoring the problem in real-time.

In villages, Naidu said that some money had been deposited with banking correspondents to be distributed to pensioners. “The banking correspondents will distribute Rs 300 to pensioners for immediate requirement," TOI quoted him as saying.

Earlier, it was reported that the state government would pay the entire salary amount into their bank accounts only by December 30. 

For the first week, the employees will only be paid a maximum amount of Rs.24,000, irrespective of their net salary, reports had said.

Multiple calls and e-mails to the state's Chief Secretary (Finance) for further clarity went unanswered.

This came a day after the Telangana government decided to make a part of the payment of salaries to its employees in cash, in view of cash crunch due to demonetisation of high value currency notes.

Telangana Chief Minister K Chandrasekhar Rao on Monday said that the state was suffering revenue loss due to demonetisation.

 He said if the current trend continues, the state may suffer revenue loss of Rs 7,500 crore during the current financial year.