28 Jan – The currency situation remains restrained here. There are new 500 rupee bills in addition to a new 2000 at the airport in Mumbai but they haven’t gotten out to the provinces. When you get money at the ATMs here, you get 100 rupee notes. On top of that there is a 4500 rupee limit per transaction. That’s about $66. For our day-to-day operations we usually get twice or three times that to avoid excessive visits to ATMs; we do a simple second transaction at the ATM we go to get around the restriction and it works. But in the end we have ninety 500 rupee notes to carry us through the next few days. That’s a big stack of notes worth only $1.50 each.
Back in early November India began to withdraw all 1000 and 500 rupee notes from circulation. To “combat the black market;” they were to be replaced with new bills. Everyone was to take their 1000s and 500s to the bank and exchange them. Beyond a certain amount they also had to pay tax. The logic being that half of India’s economy is black market and if you had more than a certain amount you must have earned it on the black market and the government wanted its tax share. Once you turned in your money, you could get only 2000 rupees a day—in 100 rupee notes.
By now, you can officially get 4500 rupees a day. It seems that some ATMs (like the one I go to here in Benalim) do not keep from transaction to transaction so you can simply execute a number of transactions to get more than the official amount for the day. No one told me; I just tried and it worked. When this gets all straightened out is anyone’s guess; but it is a lot of hassle for the small business places. We brought backup dollars and euros in cash in case we couldn’t get rupees as it was rumored. Dollars and Euros always work.
Later in the day – So now they made a liar out of me. I went to an ATM in Benalim and got two 2000 notes from one and four 500s from another. But one would only give me that 4,000 and the other only 2,000 rupees. So limits are still varied and not at all consistent.
Someone said on the 29th that India says all will be ok by April first. I didn’t have the heart to tell that Indian what that day is in the US. Me thinks it will take longer.