The Hindu Business Line
‘It is difficult for India to go completely cashless’
Dean of Diplomatic Corps says tourism is taking a hit as foreigners have limited cash
How soon do you think the demonetisation concerns that you have raised on behalf of diplomats, will be address?
We had written the first letter to the Ministry of External Affairs (MEA) on November 11 after the announcement, in which we expressed our concerns and inability to handle the day-to-day operations. Since we did not receive a response from the Chief of Protocol, we mailed a second letter to the Foreign Secretary on November 17. We then met them and told them about the difficulties.
We discussed a number of possibilities in order to find a solution at least for the foreign tourists and for medical tourists. But no concrete solution could be found because the Foreign Secretary has to discuss the same with the Finance Ministry first.
What suggestions did you give?
I told them during the meeting that we needed a higher amount of withdrawal per week to handle daily operations, especially, if the mission has a delegation, a head of state’s visit, and construction and renovation of the missions.
Bigger Embassies have bigger challenges like China, Canada, the US and others. Even in our daily lives, we are facing a lot of issues.
OBut aren’t bigger Embassies given special preference too?
Not anymore. Bigger embassies have bigger compounds and bigger staff, with families. They have their kids going to school; you cannot give them credit cards to buy their food in schools.
And remember, when Indian banks issue credit cards to foreigners or diplomats, there is generally a limit of only ₹1 lakh. This is an established procedure.
What about foreign tourists?
Tourists are the worst effected. Some of them who came before demonetisation are going back home and have no way to change their money. If there were more currency exchanges and banking outlets at airports, people could have got their money back. For those coming to India, you don’t expect them to stand in the queue here after a nine-hour flight.
What could be the solution?
We have suggested to the MEA to set up ATMs inside hotels so that foreigners can have better access to cash.
Some foreigners who came here to see the Taj Mahal are not being able to travel because they don’t have money. Ticket counters at all important monuments should start accepting credit cards.
Taj Mahal, Akshardham Temple, Lotus Temple, temples in Varanasi, the Humayun Tomb, all these places should accept credit cards.
They just cannot ask for cash now. People come all the way to India from far off places, drive to Taj Mahal and are not allowed to go in because they do not have cash.
Do you think it is feasible for the Indian economy to be cashless?
In Europe, people are have been adapting to this idea for many years, yet cash is required.
Credit cards do not always go through, communication lines are not robust, there is issue of steady electricity, and so people need cash. Credit cards get blocked and in those cases you need cash. In India, it is not possible to go completely cashless.
What is the diplomatic community doing in this endeavour?
Although we are encouraging embassies to make payments through cheques, some staff still do not have bank accounts.
Few of them are not able to open any due to the long queues and some are unable to do so because of lack of documents. This is mostly true for the cleaning staff, security guards, drivers and the clerical staff, who are employed in the smaller embassies. We are working with some banks to come to the embassies and open accounts for such staff.
What are the problems you are facing with banks?
We had special facilities and privileges before demonetisation. Now, most of the banks have stopped doing so because they are overwhelmed.
The MEA has asked them to give embassies certain priorities, but it will take time. Earlier, they used to bring cash at the embassies but now they do not even have cash.
Some embassies are also concerned that some of their staff are using the IDs of diplomats to take out money.
Have you decided to meet Finance Ministry officials?
I know some Ambassadors are meeting them directly; I am using the channel I should because that’s the correct way as per the protocol. Protocol-wise diplomats should go to the MEA. I am relying on them.
What about those who are under sanctions?
Yes, I am concerned about the Sudanese, Iranian and Cuban nationals who do not have access to international credit cards because of sanctions in their countries.
Do you think the policy could have been implemented better?
In the desire to make the policy not known to the Indian nationals, they were unable to make the necessary preparations or advisories to foreigners coming to India.
So, I think that may be there were certain issues regarding foreign tourists, diplomats that could have been better handled. Banks too, could have been better prepared.