INDIA’S cash machines will take several weeks to reset with new bills, India’s finance minister said today (November 12), as public anger mounted over a decision to pull the highest denomination notes from circulation.
People queued outside banks for the third day straight, trying to replace 500 ($7.50) and 1,000 rupee notes after Prime Minister Narendra Modi announced they would no longer be legal tender in a blitz against corruption and tax evasion.
Scores of India’s ATMs were shut yesterday (November 11) and the ones that worked quickly ran dry as hundreds of thousands thronged to them.
Finance minister Arun Jaitley said cash machines could only dispense the newly-designed 500 rupee and 2,000 notes after several weeks because of a technical issue.
“The technology takes about two-three weeks to recalibrate. The central switch needs to be changed and each machine needs to be altered individually, about 200,000 machines,” Jaitley told reporters in New Delhi.
“And because the size of the new notes is different, the machines are being recalibrated slowly.”
Jaitley reassured panicked citizens the central bank had sufficient supplies of money and that it was doing all it could to dispense the notes.
Long snaking lines and chaotic crowds at banks angered some who questioned why the government did not resolve the problem earlier.
“This is ridiculous. This is my second day. I gave up yesterday after standing in line for three hours. Couldn’t they have prepared ahead of time?,” JK Chauhan, an insurance executive, said standing outside a New Delhi bank.
But Jaitley said ATMs could not have been altered ahead of time as it would have given “the whole game away”.
Customers can exchange their old bills for new notes or deposit them in their accounts until December 30, but face major scrutiny by tax authorities if they cannot account for a sudden swell in their balance.
The government has said only tax dodgers will lose out from the bill-switch, the latest anti-corruption measure introduced by Modi.
Analysts broadly welcomed the decision, saying consumer spending would likely dip in the short term as the new notes made their way into circulation but that the move would boost GDP in the long term.
(AFP)
