Cash-crunch ruins NRI wedding, travel plans
dubai — The Indian community in the UAE is mourning the demise of certain denominations of Indian rupee notes, making normal life difficult for their families back home.
Many Indian families traditionally plan their annual vacations to India on or around the start of the school holidays, which this year would begin on December 15. This year, several are keenly watching the severe cash shortage situation in India and in case the situation does not improve by the time they’re ready to fly out, many families may skip their annual vacation or may prefer to holiday elsewhere, say travel agents.
Speaking to Khaleej Times, non-resident Indians living here said they are getting distress calls from families back home, telling them how even cash for normal expenses cannot be withdrawn from banks as ATMs repeatedly run out of cash due to a rush of worried customers.
NRI weddings and house construction plans are among the worst affected as workers and contractors refuse to accept old ₹500 and ₹1,000 notes that used to constitute more than 80 per cent of money in circulation. The cash shortage has affected ongoing construction work of many expatriates, whose dream projects are now stuck.
Afsal, a restaurant manager in Dubai, said: “The situation back home is more serious than what we see in the media. In my case, my mother had withdrawn a certain amount of money from the bank back home to meet the daily wage payment to nearly 20 workers who were building my house. The project is now on hold because workers refused to accept wages in old currency.”
Buying construction material and paying wages is one of the most challenging issues because most of the million-strong construction workers do not have bank accounts to change their currencies. NRI weddings, extravagant as they are, are also affected as a lot of cash is splashed for wedding-related expenses. In the absence of currency notes, families planning weddings are facing a tough time.
“I just came back from India after cutting short my vacation because it is a difficult situation there. Even before buying a cup of tea or buying something from the shops, I had to check in advance whether the shop has enough change for Rs2,000 notes,” said Murali Dharan, managing director of Day of Dubai.
“The next school vacation for three weeks start from December 15 and schools here will remain closed till January. NRI families are watching the situation – many are hoping that the situation will ease by that time. Otherwise, there will be a major impact on the travel scene,” says Sudheesh TP, general manager, Deira Travels.
Many tourists who are visiting India are facing cash shortage. “Even though NRIs have money in banks, they cannot spend that because of cash withdrawal limits from the government,” added another travel agent.
“My daughter has to pay her pending hostel bill but she has no time to go and wait in the long queues by skipping her regular classes. The ATMs have run out of cash,” said another Indian expat in Dubai.
NRIs planning vacation have many big plans but since they can withdraw only Rs4,000, they may change their plans,” says Gopi KL, an Indian social worker in the UAE.
“I was planning to visit my home for a month, but due to alarming reports from India, I have postponed my trip. It is really disgusting situation,” added another Indian expatriate.
“Exchange houses are giving old notes in lieu of the money remitted from the Gulf. I sent money a day before the demonetization announcement. The money exchange refused to give new notes. They had to take the old notes and visit a bank to convert Rs35,000. Another friend sent Rs10,000 for routine expenses, but the exchange house is giving only in old notes,” said Anwar Naha, president of KMCC Dubai.
“Every NRI family is enforcing strict credit controls on family budgets. In the absence of correct change and shortage of small denomination notes in India, people have no other option but to spend more money for unwanted things. Just for buying an item worth Rs200, the customer spends Rs1,800 extra to adjust the change,” added Afsal.
The Indian government, on the other hand, insists that there is no shortage of cash and there is enough stock of currency with the Reserve Bank of India.
As per the diktats of the Narendra Modi government, old notes of 500 and 1,000 denomination are no longer accepted and people who own those currency notes have to deposit them in the banks. The banks have themselves put a daily withdrawal limit of Rs4,000 (about Dh215), which is insufficient for middleclass families.