After the surprise announcement by the Indian Government to ban INR 500 and INR 1000 notes from circulation, a move which garnered appreciation from the general public, Indians struggled to get their cash back as the system tried to cope up with such a mammoth and sudden upheaval.
The amount of money deposited in banks up till now in the form of old bills that no longer will bear legal tender value, have crossed INR 2 trillion mark which is nearly $30 billion, but the replacement procedure has not been up to the same speed and standard as people queue in long lines outside banks and ATMs to get their cash back.
The move was announced on Nov 8 as part of Prime Minister Modi’s promise to bring back black money or money on which tax wasn’t paid, back into the system and benefit the economy.
India has long been the victim of tax evasion and undeclared incomes with a report by the World bank back in 2010 stating that the amount of such money and illegal incomes amounted to nearly 20.7 percent of India’s total GDP, a surprisingly high figure which causes much damage to the economy as this money can be used to bring prosperity to millions of Indians living under the poverty line and those who yearn for Government reforms to bring prosperity into their lives
New INR 500 note, which is wholly different in design, color and security features than its predecessor is going to be at the helm of this replacement campaign while there will be an entirely new INR 2000 note which will also be issued in the place of old notes.
These new notes require the ATMs to be reconfigured to match their sizes but they were intentionally kept in their old manner, prior to the announcement, to keep any attempts by people who hold black money, off their trail. Currently, the ATMs machines are only dispensing INR 100 notes if you happen to line up at one of them.
86 percent, a whopping amount, of the money currently in circulation in the Indian economy consisted of these old notes which mean a period where inconvenience is likely to be experienced as said by the Ministry of Finance in a statement regarding the issue.
Arun Jaitley, the Indian Finance Minister had some reassuring remarks on this issue as he said that there is enough money to complete the procedure but this thing will definitely take time and his people are working on it to make it as smooth sailing as possible.