The shock discontinuation of high value notes in India - which comprised 86% of the total Indian currency in circulation -- has created short term problems in the country, with the prevailing legal tender falling well short of fulfilling the needs of the 1.2 billion population.
Banks have been open since Sunday last week, but with banks and ATMs running dry, and serpentine queues building up for cash withdrawals, the Indian government has announced some new measures:
1. An individual can only swap a maximum of Rs 2000 in new currency notes per day, starting Friday, Nov 18. The daily limit had initially been increased from Rs 4000 to Rs 4500, but with not enough cash to service the needs of the entire nation, the daily limit has now been more than halved.
2. Banks will apply indelible ink on the fingers of customers who get their old currency converted into new - just like the permanent ink applied when people vote in India.
3. In case of a wedding, a family can withdraw Rs 250,000 (Rs 2.5 lakhs) at one go, provided that the withdrawal is from one account.
4. Farmers can withdraw up to Rs. 25,000 a week to buy seeds and fertilizers, from loans previously sanctioned and credited to their accounts. The time limit for the payment of insurance premium on crop loan has been extended by 15 days.
5. Traders in vegetable wholesale markets can withdraw Rs. 50,000 a week to pay for purchase costs and other expenses like wages.
6. More than 20,000 ATMs have been recalibrated, to dispense the new Rs 500 and Rs 2000 notes as of today. With a total of 200,000 ATMs estimated in the country, a majority of them still need to be upgraded.
7. If you're travelling to India over the next few days or weeks, it is advisable to withdraw the new currency notes upon arrival at the Indian international airport - you will be unable to obtain the new currency notes overseas.
8. Many religious places, including the Golden Temple have refused to accept the old Rs 500 / 1000 notes for 'parshad' and other offerings made at the counter.
And remember, Rs 1000 notes are not legal tender in India anymore - the old ones have been discontinued and no new ones are being printed.
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