Indian Banks see long lines as rupee exchange deadline passes

SAN FRANCISCO (Diya TV) — There have been long lines formed outside of banks in India as residents scramble to exchange their demonetized currency with legal notes, this despite the fact the exchange deadline has officially passed.

An estimated 40 percent of India’s cash dispensaries are now empty, meaning residents are unable to withdraw new notes for the banned currency they’ve traded in.

Prime Minister Narendra Modi made a surprise announcement on Nov. 8 that the country’s Rs. 500 and 1,000 notes were being demonetized in an effort to combat corruption and the circulation of black money. The opinion on the effectiveness of the move has been split down the middle, especially how quietly it was implemented.

Some Indians, including those who are currently living abroad, will be allowed to continue to exchange their notes at branches of India’s Central Bank until the end of March.

India’s parliament is currently drafting legislation that will make it a criminal offense to possess either of the banned notes, which collectively represented 86 percent of the country’s currency in circulation. This has left residents standing in lines at banks for hours, sometimes being sent home empty-handed if the branch and its ATM machines ran out of cash.

The government also hopes the measure will encourage more residents to open bank accounts, in turn hopefully ushering in a society less reliant on cash transactions. There are significant concerns that many of the poorer people in the more rural areas of the nation have not yet opened such accounts.

Local firms which allow people to make digital payments both online and in shops have reported a surge in transactions as people look for cashless alternatives. The prime minister Friday announced the launching of a new mobile payment application, delivering a similar message of graduating the nation into the digital word of transactions.

However, critics of the demonetization program say the move has failed to root out corruption and unearth the illegal cash it was created to uncover. Instead, India have put their economy in a state of regression at a time when it’s the world’s most rapidly developing, opponents said.