By Saeed Haider
DAMMAM — India’s shock move on Tuesday to withdraw large denomination bank notes from circulation to fight corruption and tax evasion has affected many Indian expats, as money changers stopped accepting Indian currencies in any denominations.
In Dammam, Al-Khobar, Riyadh and Jeddah, the Indian rupee found no takers.
Indian expats started getting panicky when Prime Minister Narendra Modi announced immediate discontinuation of currency notes of 1,000 and 500 denominations in what he described as his first move to curb black money and put a stop to parallel economy.
A statement from the Indian Finance Ministry read, “With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs500 and Rs1,000 issued by RBI (Reserve Bank of India) till now. This will take effect from the expiry of the 8th November, 2016.”
Mohammed Arif, a construction worker in Dammam, lost his two months’ salary which he had converted to Indian Rupees just three weeks ago when the Indian currency hit a low.
“I am ruined I have around Rs75,000, and all in 1,000 denomination. I am trying to convince the money exchanger to take the rupees back and give me Saudi Riyals. I have valid receipt. But the exchanger has refused.”
Rajbeer Singh, of Jalandhar in Punjab, brought Rs100,000 from India when he visited India. “Instead of leaving it with relatives, I decided to carry it with me to use it when I return to India again. But now it is just waste paper.”
When told that all is not lost and he can change it in India at any bank before Dec. 30, Rajbeer said his vacation was not due until 2018.
What these Indians do not realize that carrying Indian currency outside India is a crime and a person can be subjected to imprisonment and fine.
“These measures will not affect big business houses like the Tatas, Ambanis, Adnanis etc. as they don’t keep their money in India.
“They conduct business and survive on bank loans,” said Ali Abbas, a software engineer in Al-Khobar.
The hard hit will be the middle class and small and medium business groups, he said.
The coming days will be too confusing and hard for Indians as banks will be closed and the government has put a cap on ATM withdrawals.
Economists believe that the measure will cost a huge loss to national exchequer.
Meanwhile, Reuters quoted a forex trader at Hong Kong-based money-changing chain Singapore Exchange Co as saying that his firm was left with 10 million Indian rupees ($150,000) in cash.
“We don’t know what to do, we are frantically trying to find buyers and sell at any cost. But there are no takers yet,” said one of the clerks, who gave his name only as Yunus.
The clerk said he had been inundated with phone calls since early on Wednesday from nervous customers left holding stashes of Indian bank notes.
It was a similar story in Singapore, another Asian financial center with a sizeable Indian community, with people holding rupees and unable to exchange them into other currencies, creating a bit of panic in the South East Asian nation. — With agencies
