One queue dies, another one gets longer - that was the demonetisation story on Friday, even as bankers said they were anticipating a testing time as the month turns and salaries come in.

Residents lined up on Friday to deposit cash in their bank accounts after the Centre on Thursday decided to stop exchange of old Rs 500 and Rs 1,000 notes. As a result, the deposit counter queues got longer.

"As the central government has stalled exchange of notes at the bank counters, we have seen a rise in people at the deposit counters," said Sudhir Kumar, branch manager at State Bank of India (SBI), Mithapur. "On Friday, more than 150 people queued up at the bank counters to deposit cash, which is a jump of 20 per cent from the previous days."

Many people who had Rs 500 and Rs 1,000 notes made a final rush to the banks to deposit cash on Friday.

College student Ravi Sharma, spotted at the SBI Mithapur branch, said: "I had Rs 5,000 cash, which my parents had given me for daily expenses. I now have no other option but to deposit the cash in my account."

Banking sources said they expect the deposit rush to continue this week. However, the real test of will come next month when there will be long queues at bank counters and ATMs for withdrawing cash as people get their salaries.

A Bank of India manager said: "Queues at the urban branches have shortened. However, the first week of next month will be the testing time for banks and the RBI to meet customer demand when people will throng counters and ATMs to withdraw salaries."

Seventeen days after demonetisation was announced, nearly half the ATMs in the state still not functioning - because either cash runs out fast out or there are technical glitches, or the ATMs have not been recalibrated to dispense the new notes.

In Patna district, out of the 312 ATMs of the SBI, only 160 are functioning. The rest are out of cash or dysfunctional.

"In Bihar-Jharkhand there are 7,000 ATMs," said RBI regional director M.K. Verma said. "ATM recalibration takes time, but the situation will improve soon."

There is no shortage of cash, he claimed, and the RBI is in a position to handle the situation next month particularly when there will be more withdrawals from salary accounts.

With cash hard to come by, small traders are opting for other modes of payment to stay afloat.

Umesh Prasad, who runs a tea stall at the high court, has opened a PayTM account. "With insufficient flow of cash, like many other traders, I decided to accept money through PayTM," he said.