FOREIGN tourists in India have resorted to busking in the streets to raise cash because of the shortage of banknotes following the management’s controversial demonetisation exercise, according to reports.
A report by the Hindustan Times said two groups of tourists from Germany, Australia and France were seen on Saturday performing along the streets in popular tourist towns Pushkar, Rajasthan, looking in the locals for help.
The tourists asserted they were compelled to do this as soon as they were not able to draw money due to the ATMs from their accounts.
“Locals have now been kind to us. Thus far we've collected around Rs2,600 (US$38),” a German tourist told the newspaper.
In its Nov 8 policy, the Indian government declared all Rs500 (US$7) and Rs1,000 (US$15) notes of no value as part of its effort to tackle corruption and tax evasion. The exercise, however, created panic inside and outside India, as the mad scramble started to exchange the notes that were invalidated.
The Times of India reported that about a couple of weeks after the drive began, over 82,000 ATMs had been recalibrated to dispense the new notes currency that was for denominations of Rs500 . and Rs2,000 The just calibrated machines are now stocking 50 to 60 lakh (US$73,000 to US$88,000) cash and are allegedly capable to cater to the higher demand originating from the demonetisation exercise.
But reports said the unexpected move negatively impacted many industries. The tourism sector, for example, was hit hard, with hotels supposedly finding a 60 percent decrease in bookings in what is usually peak travel season.
In its Frequently Asked Questions section, the Reserve Bank of India said foreign citizens will undoubtedly be allowed to trade foreign currency for Indian notes up to a limit of Rs5,000 (US$73) per week. The
The Economic Times of India, nevertheless, says currency exchange companies assert the allowed amount is substantially less than what tourists ask for at the airport. The web site adds that tourists leaving India who would like to re-exchange rupees in their particular currency are also facing issues, specially those taking the now- outdated Rs500 and Rs1,000 notes. The cap stands at Rs5,000 per tourist.
As men and women in the country continue in a desperate attempt to exchange their devalued notes for brand new ones, banks lines in India now can last the whole day. Banks don't see this situation getting any better.
As stated by the Economic Times of India, banks have received a message from the Reserve Bank of India saying supplies might not get any easier in the not too distant future. They called for the financial institutions to shove digital transactions rather than cash ones.
“Reserve Bank has requested us to shove on the usage of digital channels to all our clients and ensure that we bring down the use of cash in the market,” said a banker told the website.
The exercise is to come to finish on December 30 along with the Indian government is not considering extending the deadline as it considers the Reserve Bank of India and Banks have adequate cash available to manage the position.