Anger as millions in India run out of cash
People crowd banks amid growing despair and chaos
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.
“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.
“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