INDIA’S MONEY CRISIS – WHAT’S THE IMPACT?
Have a question? Ask our expert Simon Calder
Q I am travelling to Goa for Christmas. How will the money crisis in India affect me?
Glyn Partlow
A Commercial life in India has been traumatised by the sudden decision last month to “demonetise” the highest-value banknotes, the 500- and 1,000-rupee denominations. The Reserve Bank of India says “Highdenomination notes have been misused by terrorists and for hoarding black money.” It is also concerned about the number of fakes in circulation.
Unfortunately, the banking system was not ready for such a dramatic move. There have been long queues at banks and post offices as locals — and tourists — try to change their redundant high-value bills, known as “specified bank notes”. The Foreign Office says: “New 500- and 2,000-rupee notes are in circulation but you may find that they are in short supply and businesses may not be able to provide you with lower denomination notes in change.” It continues: “Foreign tourists will be able to exchange foreign currency or old notes of not more than 5,000 rupees per week into legal tender at airport exchange counters. If you have debit or credit cards, use them instead of cash where possible.” However, only upmarket hotels and restaurants tend to accept plastic. If you prefer to eat with the locals, then cash is the only option.
The Reserve Bank urges the public not to hoard 100-rupee notes, saying “cash is available when they need it”. The Times of India has reported that there is a shortage of these bills, with some traders selling them at a premium. Some ATMs are dispensing 100-rupee notes, but only to a maximum of 2,500 rupees per day – less than £30 – and with long queues. Were I fortunate enough to be heading for India this Christmas, I would take sterling in the form of clean £5, £10 and £20 notes, and change money as and when I could. It may also be that some enterprises will countenance payment in pounds, though this would be a breach of the law.
Every day, our travel correspondent, Simon Calder, tackles a reader’s question. Just email yours to s@hols.tv or tweet @simoncalder