KUWAIT: The India government’s shock decision to withdraw large denomination banknotes Rs 500 and Rs1,000 from circulation with immediate effect has caught many Indian expatriates unawares in Kuwait as money changers refused to accept the currency.
“I approached three exchange companies to change some Rs 20,000 I had with me following the announcement. But all of them refused to exchange the currency,” said Suman Gupta, an executive working with a jewelry shop in Kuwait.
The expatriates in Kuwait reacted with caution to the India government’s move on Tuesday to withdraw the two largest denomination notes from circulation. While many hoped that the decision could help the government fight black money and tax evasion in a country that is plagued by large-scale corruption and illegal money trading, a large section of the expatriates feared that the decision could create havoc for ordinary people.
Indian Ambassador Sunil Jain told Friday Times yesterday that the embassy has requested the Reserve Bank of India for guidelines in relation to NRIs following the government decision. “It is a unique situation and we need to get further guidelines on the matter from the RBI,” Jain said.
“In fact we want to help the customers. But at the moment, we are helpless because we are not sure if we will be able to trade the banknotes as there is no clarity on the issue from the India government,” said an official from a money exchange company yesterday on condition of anonymity.
“More than 800,000 Indian expatriates are here in Kuwait alone. Most of them will have some Indian rupees with them as they keep the currency for their immediate requirements when they travel out of the country. Will it be possible for them to travel back to India and exchange the small sum before December 30?” asked a manager at a local exchange company.
Indian citizens are legally entitled to carry cash up to Rs 25,000 when they travel in and out of the country to meet their immediate requirements. But the government’s move has left expats high and dry as they find it impossible to exchange the banknotes before they become illegal.
“The government has completely forgotten about the large number of Indians living overseas when it introduced the new rule,” said Venkiteswaran, a bank employee. According to him, the government could have thought of some mechanism so that expats could trade the currency for the new legal tender if it is within the cap of Rs 25,000.
According to the new decision, a person can exchange the demonetized banknotes Rs 500 and Rs 1000 only up to a maximum of Rs 4,000 provided he/she applies for exchange the notes along with ID proof. But a person can deposit any amount of money in his/her ordinary account (NRO) which will be taxable unlike an NRE account.
“In this process, your money loses its non-resident status and becomes taxable,” said another expat Augustine Joseph commented.
By Sajeev K Peter