Anger as mil­lions in In­dia run out of cash

Peo­ple crowd banks amid grow­ing de­spair and chaos

Kuwait Times - - BUSINESS -


Anger in­ten­si­fied in In­dia yes­ter­day as banks strug­gled to dis­pense cash fol­low­ing the gov­ern­ment’s de­ci­sion to with­draw large de­nom­i­na­tion notes in an at­tempt to un­cover bil­lions of dol­lars in un­de­clared wealth. Chaotic scenes played out across In­dia yes­ter­day, with long lines grow­ing even longer and scuf­fles break­ing out, as mil­lions of anx­ious peo­ple tried to change old cur­rency notes that be­came worth­less days ear­lier when the gov­ern­ment de­mon­e­tized high-value bills.

Tem­pers frayed as hun­dreds of thou­sands of peo­ple queued for hours out­side banks for a third day to swap 500 and 1,000 ru­pee bank notes af­ter the notes were abol­ished ear­lier in the week. The banned bills made up more than 80 per­cent of the cur­rency in cir­cu­la­tion, leav­ing mil­lions of peo­ple with­out cash and threat­en­ing to bring much of the cash-driven econ­omy to a halt.

“There’s chaos ev­ery­where,” said Delhi Chief Min­is­ter Arvind Ke­jri­wal, a ri­val of Prime Min­is­ter Naren­dra Modi, ac­cus­ing the premier of wreak­ing havoc on poor and work­ing In­di­ans while the wealthy found ways to skirt the new rules. Cus­tomers ar­gued and banged the glass doors at a Stan­dard Char­tered branch in south­ern Delhi af­ter se­cu­rity guards blocked the en­trance, say­ing there were too many peo­ple inside al­ready. Oth­ers turned on Modi, crit­i­ciz­ing his on­go­ing visit to Ja­pan while or­di­nary peo­ple suf­fered at home.

PM crit­i­cized

“He is tak­ing bul­let train rides in Ja­pan and here you have old peo­ple knock­ing on bank doors for cash,” said Prab­hat Ku­mar, a col­lege stu­dent who said he had spent six hours in the queue. “He has made a ter­ri­ble mis­take.” Modi said he would pur­sue the fight against cor­rup­tion and tax dodgers even if it meant scan­ning decades-old records. In New Delhi, the cap­i­tal, an­gry scuf­fles broke out af­ter ATMs ran out of bills. Mi­nor stam­pedes oc­curred at two banks in the city’s old quar­ter when thou­sands of peo­ple wait­ing in line surged for­ward. Para­mil­i­tary troops posted at banks in some of the most con­gested ar­eas of the city walked among the crowds urg­ing peo­ple to stay calm. Frus­tra­tions grew as re­ports came in that some banks had run out of new cur­rency notes. On Tues­day, In­dia’s gov­ern­ment made a sur­prise an­nounce­ment that all 500- and 1,000-ru­pee notes had no cash value, in an ef­fort to tackle cor­rup­tion and tax eva­sion.

“I am so an­gry at the lack of plan­ning on the part of the gov­ern­ment be­fore tak­ing such an enor­mous step,” said Raju Sun­daram, an of­fice ex­ec­u­tive, wait­ing out­side a bank in the south Delhi neigh­bor­hood of Saket. Sun­daram, who had been in a slow-mov­ing line for four hours, said it was the third con­sec­u­tive day that he was lin­ing up out­side his bank. “On Thurs­day and Fri­day, they ran out of cash be­fore my turn,” he said, as he clutched a bunch of iden­tity pa­pers and a bot­tle of wa­ter.

Wind­ing lines were seen at ma­jor banks in cen­tral Delhi, as peo­ple waited to with­draw new cur­rency bills. But there were prob­lems as more than half of the more than 200,000 ATMs in the coun­try had not been re­con­fig­ured to dis­pense the new 2,000-ru­pee notes in­tro­duced by the gov­ern­ment. Mean­while, anger was mount­ing as peo­ple, frus­trated with the de­lays and long hours spent in ser­pen­tine lines, lost their cool, lash­ing out at the gov­ern­ment and bank em­ploy­ees. “If it’s bad out­side the bank, it’s com­plete chaos inside,” said Su­niti Ku­mar, a house­wife, as she el­bowed her way out of a bank through a restive crowd.

Many banks ran out of cur­rency notes, and over­worked bank staff who have been work­ing long hours, or in shifts, ap­peared help­less.

Dis­rup­tive step

“This is a hugely dis­rup­tive step,” said a bank teller in Delhi’s shop­ping hub of Con­naught Place, as he stepped out­side for a cig­a­rette. “It re­quired a lot more plan­ning, but that didn’t hap­pen.” He spoke on con­di­tion of anonymity be­cause he was not au­tho­rized to speak to the me­dia.

Delhi po­lice said they re­ceived more than 3,000 emer­gency calls re­port­ing fights and scuf­fles in the city Fri­day as peo­ple crowded out­side banks, wait­ing to ex­change notes or with­draw money.

Nearly half of In­dia’s 202,000 ATMs were shut on Fri­day and those that op­er­ated quickly ran out of the new notes as scores of peo­ple de­scended upon them. Traders in Delhi’s vegetable mar­ket said they were con­sid­er­ing shut­ting down the mar­ket as cash was run­ning out and banks were dis­pens­ing a lim­ited amount.

“We might have to close down un­til the sit­u­a­tion sta­bilises,” said Metharam Kri­plani, pres­i­dent of the Cham­bers of Azad­pur Fruit and Vegetable Traders. Peo­ple in Mum­bai said gro­cers were charg­ing 10 times the price of salt in re­turn for ac­cept­ing the old cash notes. The gov­ern­ment has asked peo­ple to ex­change the old 500 and 1,000 ru­pees notes by Dec. 30. The cen­tral bank said there was enough cash avail­able with banks and that it had made ar­range­ments to de­liver the new bank notes across the coun­try. Modi’s move was aimed at shrink­ing the “black econ­omy”, the term widely used to de­scribe trans­ac­tions that take place out­side for­mal chan­nels and which could be as high as 20 per­cent of gross do­mes­tic prod­uct, ac­cord­ing to in­vest­ment firm Am­bit. Peo­ple swap­ping old notes will have to present proof of iden­tity and de­pos­i­tors of ab­nor­mally large sums could be

in­ves­ti­gated by tax au­thor­i­ties. Much of In­dia’s ru­ral econ­omy is pow­ered by cash, with few peo­ple reg­u­larly us­ing a bank ac­count.

Yes­ter­day, nearly 200 calls had been re­ceived in the first four hours since the banks opened at 9 am lo­cal time, ac­cord­ing to po­lice. In the south­ern city of Kol­lam, fu­ri­ous crowds smashed glass panes and van­dal­ized a bank af­ter the manager an­nounced to wait­ing clients that the bank had run out of new bills. —Agen­cies

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