Millions in India queue up to swap currencies, banks cope with demonetization

People across India queued up to swap their notes of 500 and 1000 denominations while many rued that they faced serious problem in paying for daily bills, including the hospital fees.

Two days after his 'surgical strike' on black money, Prime Minister Narendra Modi, who reached Japan on Thursday evening, said his government is unwavering in its effort to create corruption free India.

While Indians have appreciated PM Modi's efforts to curb black money in the country, the sudden demonetisation of the highest denominated notes, rupees five hundred and rupees thousand, have thrown life out of gear in many ways, according to reports.

With banks and automated teller machines (ATMs) remaining closed on Wednesday, people lined up before banks across India since Thursday morning to change the notes.

Long queues in front of banks have been reported from most cities and towns since early morning. In many areas, the queues snaked across pavements for a long way.

Many of those queuing up were salaried people who said they did not have enough small change at home to do daily shopping.

Daily wage earners and labourers, who have their savings in the now demonetised notes, were also seen anxiously queuing up.

In Guwahati, long queues formed in all bank and post office branches since early morning to exchange the demonetized notes.

“I had exchanged the now-demonetized Rs 500 and Rs 1000 notes of value Rs 4000 after standing in queues for three hours,” Sonali Baruah, a resident in Guwahati said.

“It is a good initiative taken by the Union government to check black money, fake currency. People have no need to panic for it,” Baruah said.

Meanwhile, a top official of RBI Guwahati regional office said that, people will draw Rs 2000 from all ATM’s in the region from Friday.

“People can easily draw the amount from any ATM from tomorrow and no need to rush,” the RBI official said.

Not only Indians, even foreigners who had changed their currency into Indian notes, were reportedly seen worrying about getting their demonetised notes changed and were crowding to the forex bureaus.

Union Finance Minister Arun Jaitley said the tussle is not between his government and the Opposition but between people and some politicians who are exposed.

He slammed Congress, the Left and even said he was surprised that while chief ministers like Nitish Kumar and Naveen Patnaik supported the move, Mamata Banerjee did not.

Congress has terrible track record of not acting on the issue of black money while the protest of the Left is completely contrarian to the left ideology, he said.

He said "nobody will face any questions or harassment of any kind for small deposits". "Only those with large amount of undisclosed money will have trouble," Jaitley said.

The Finance Minister, while answering reporters, said  that steps taken on scrapping of old notes of Rs 500 and Rs 1,000  will have long-term impact on the Indian economy and the spending habits of the people.

"This is the proof of our leadership," he said.

"We are trying to ensure at the earliest requisite replacement currency is available to people; believe that no need to rush in initial days," Jaitley said.

"Banking department, RBI has taken all necessary steps to keep banks open to the extend necessary; it has been kept open on weekend too."

Commenting on the hardship of the people, he said it is only "temporary."

India's biggest private sector bank ICICI has announced various measures to keep pace with the emerging situation after a ban on the 500 and 1000 INR denomination notes to curb the black money in the economy.

Chanda Kochhar, MD & CEO, ICICI Bank, announced the various measures implemented by ICICI Bank on Nov 10.

ICICI Bank opened many of its branches Thursday at 8 am; the rest of the branches opened from 9 am. Many prominent branches were operational from 8 am worked till 8 pm . All branch timings were extended by two hours today. It will be the same tomorrow, Friday, November 11, 2016.

"We have served our customers as well as other banks’ customers. We have a witnessed a more than three times increase in footfalls in branches today with over five-fold rise in number of cash transactions. I am glad to share that with all our measures in place, no branch has run out of cash today," she said.

The Rs. 500 and Rs. 1000 notes stood scrapped from the midnight of Tuesday following an announcement of Prime Minister Narendra Modi in the evening.

The Government says the move has been taken to crackdown on unaccounted wealth.

The Government has asked the people to deposit their Rs. 500 and Rs. 1000 notes in banks within a specific time frame and get smaller denominations in exchange.

It has also  announced that deposits above Rs. 2.5 lakh will be taxed and could draw a 200 per cent penalty if found disproportionately higher than the account owner's income.

The banks have been asked to keep the details of PAN card of people depositing such large amounts over the 50-day period till December 30. 

Banks will remain open this weekend and many banks have announced longer working hours.

(Reporting by IBNS correspondents, writing by Sujoy Dhar)