The ban on Rs500 and Rs1,000 notes in India has sparked “panic” among the community in Britain, who are rushing to exchange their cash.
Indians in the UK are making emergency trips to their homeland to change their money before the December 30 deadline as British banks are unable to handle the notes.
Prime minister Narendra Modi has given Indians until the end of next month to exchange them as part of a drive against so-called “black money” or unaccounted wealth.
But people are only allowed to carry up to Rs25,000 when entering or leaving the country, which could impact British families planning a wedding in India or staying with their
family over the winter. And the limit to exchange cash at the bank was reduced to Rs2,000 last week.
Harjap Singh Bhangal, a senior partner at MKV Legal Solicitors in the Midlands, said that larger amounts can be transferred into an Indian bank account.
The lawyer told Eastern Eye: “I have been contacted by Non Resident Indians (NRIs) living in the UK about how to change their rupees if they are in the UK. It has sparked a worldwide panic.
“The advice is if people are travelling to India, they can exchange up to Rs2,000 at their bank.
For amounts over this they can deposit them in their bank account in India.
“Large deposits in rupees may be subject to tax enquiries from the government as to the source of these funds.
“Rupees can also be deposited into an Non-Resident Ordinary (NRO) account.
“People can also appoint a representative to deposit money on their behalf in India. However, if large sums are going to be deposited then it is best to get advice from a qualified accountant as to possible tax liabilities.”
Bhangal added that his firm was in talks with the Indian High Commission in London to help people who are unable travel to India before the deadline next month.
Dinesh Patnaik, the acting high commissioner to the UK, said it is looking at ways of allowing people to deposit their notes at a branch of an Indian bank overseas.
He said: “Our endeavour is to help everybody. We have asked Delhi about it.
“I have a feeling we will work out something so that people who have carried certain amount of cash in their pocket, should be able to deposit it in any Indian bank abroad.”
Anil Bhanot, managing director for Hindu Council UK, said he is worried that Indians with holiday money may lose out.
He told Eastern Eye: “I wrote to the Indian High Commission to provide guidance for the Indians here who may have money, which may run into Rs200,000-Rs300,000; if they had an extended period to go and deposit in India or if there was a facility here for them to exchange notes, but have had no response.
“It’s a good step against the black market but genuine people should not suffer by a short deadline to deposit or exchange notes, which for NRIs (non resident Indians) it seems to be.”
The UK’s Foreign and Commonwealth Office has urged Britons to use debit and credit cards in India to avoid problems with withdrawing money and getting change from small businesses.
Its updated advice read: “If you have debit or credit cards, use them instead of cash where possible.
“If you’re exchanging money at a bank, take a form of photographic identification and expect long queues.
“If you’re exchanging money don’t accept any denomination higher than Rs100.”
Ankeet, a currency trader from London, has given Rs2,000 of old notes to a cousin going to India. The 40-year-old said: “I’m lucky that I have a relative who is flying, so my only option would be to give it to him and ask him to enjoy it.
“I’ve got a friend in the US who has close to Rs50,000. He will probably write it off.”
Rajiv Nathwani, director of finance firm Quivira Capital, has backed the call for people outside India to be able to exchange their notes before they become worthless.
He said: “There will always be people who will be caught by such a large change, but I don’t think the Indian government should penalise those who have currency and cannot get back to exchange it.
“There should be a system for those with foreign passports to be able to exchange currency. Maybe at the Indian embassy in their country. To have them lose their money isn’t fair.”