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Modi pleads for patience as Indian banks get $44 bn after demonitisation


There has been support but also rising anger over the demonitisation drive
There has been support but also rising anger over the demonitisation drive

INDIAN banks received Rs 3 trillion ($44.4 billion) of 500- and 1,000-rupee notes over the last four days, the finance ministry said today (November 13), after the government announced it would withdraw such bills to crack down on corruption.

As chaotic scenes erupted outside banks nationwide after high denomination notes were pulled from circulation earlier this week, Prime Minister Narendra Modi today made an emotional appeal to people to make India graft-free.

Five days after Modi’s announcement, desperate people continued to line up today for hours outside banks and ATMs, with many running out of cash by the afternoon and prompting anger against the government’s latest anti-corruption measure.

“People are going through great pains. I feel that pain. This scheme is not born from arrogance. I have seen such adversities up close. I understand the trouble everyone is facing,” Modi said at an event in Goa.

“But this hardship is only for 50 days,” he added.

“Please, 50 days, just give me 50 days. After December 30, I promise to show you the India that you have always wished for.”

Customers can exchange their old bills for new ones or deposit them in their accounts until December 30.

The government also relaxed cash withdrawal limits including removing a per-day cap of Rs 10,000, increasing the weekly limit to Rs 24,000 from Rs 20,000 and allowed exchange of bills over the counter at banks to reach Rs 4,500 instead of Rs 4,000.

From automated teller machines, individuals will now be able to take out up to Rs 2,500 of cash per day instead of Rs 2,000 per day, the ministry said in a statement.

These relaxations came as public anger increased due to a lack of access to accounts, as well as over the non-functioning of ATMs not yet reconfigured for the new series of smaller 2,000-rupee bills.

Modi also vowed to pursue his fight against corruption and tax evaders even if it meant scanning records dating back to India’s independence in 1947.

Analysts have broadly welcomed the latest initiative, 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.