Where is the money?

500_rupee_note_2The government of India banned 500- and 1000 rupee notes last Wednesday. With this prompt announcement they want to ban corruption as people can only change the notes at the bank, with a maximum of 4.000 rupees a day (€ 54,- ). It will take Indian citizens with a lot of black money (in 500- and 1000 notes) very long to change all the money. The two notes accounted for about 85% of the cash in circulation! It’s very interesting to be in India during such a big event! However, it’s also slightly frustrating. It is not possible to withdraw cash from ATM’s; they are not working or empty. Luckily it is possible to pay with debit cards!

There is a lack of small banknotes and shops and restaurants therefore prefer to receive payments with debit cards. I don’t have an Indian debit card yet, so I’m paying everything with my European credit card. I can live with all of this! But it has a huge (negative) effect for the poor citizen and middle class of India. We see big lines of people at bank branches all over town. They are waiting for hours to change the 500-, and 1000 notes.

 

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