Demonetisation and the Diminishing Role of Indian Banks Overseas, with Missions Hardly of Help

Conceptual flaws, inefficiencies in execution and a lack of governmental empathy with those reeling under the demonetisation pain have started to show India in poor light overseas.

The inefficiency with which India’s note ban has been conceptualised and executed is now reverberating worldwide. So is the Government’s lack of empathy with those hit hard by the move.

In Singapore, I can see some ripples over the demonetisation crisis. There have been letters in The Straits Times the last few days about how Singaporeans, like most visitors to India, have been short-changed there.

There are rumblings here and there as well but as most NRIs here are sycophantic followers of Prime Minister Narendra Modi, they are a happy bunch revelling even in the blunders of his government that they blindly believe will make the country an economic powerhouse.

They are least affected anyway as the smarter NRIs always keep their earnings in dollars expecting the rupee to keep tumbling.

Not so others who are frequent visitors to India.


Picture Credit: LiveMint

Indian High Commission Just Watching?

One letter writer wanted to know what the Indian High Commission in the country to alert travellers.

I visited the site and found it was littered with pictures of Prime Minister Narendra Modi (and some earlier PMs and Presidents) exchanging pleasantries with Singapore leaders during the last few years. Fair enough as they do help throw light on bilateral relations.

The High Commission site had an FAQ linked to the Reserve Bank of India page. Out of the 33 questions answered one was relevant to visitors to India.


 That is hardly a helpful piece of information for the following reasons:


The site also linked to a media release from the Press Information Bureau which talked about how the note ban was an “historical” move that will “add record strength in the fight against corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes.”

The site of the Indian Consulate-General in New York was no better but that of the High Commission in London had a note explaining that: “the Ministry of External Affairs has taken cognisance of the different requests on the issue of demonetisation from India’s Missions in various countries about the clarifications sought by NRIs abroad, Money Changers Associations and foreign visitors and tourists (including for medical purposes) in India.” Not that it was helpful!


Photo Credit: Business Wolf

Are Overseas Branches of Indian Banks Needed in Era of Digital Banking?

Another reader sought to understand if Indian banks in Singapore are playing any role at in the country to address the issue.

Even prior to the crisis, the Indian banks were not dispensing rupees. Their role was largely as platforms for sending money to India. Even that has hardly been relevant the last few years as online transfers are easier and there are entities like Western Union as well.

Under the circumstances, I don’t see a need for Indian banks to have overseas branches. Their role may just be confined to tapping the affluent for investments/ deposits.

As some visit India periodically, they are stuck with some old notes, as one of the readers brought up, seeking guidance on what they can do to exchange them. That’s obviously legitimate currency down the drain.

Another writer even wondered if the Monetary Authority of Singapore had any guidelines on the issue.

Depositing Rupees in NRO Accounts

NRIs with NRO (Non-Resident Ordinary) accounts can deposit the rupees but that can be done only while they are in India but they have to do that before December 30. Indian bank branches overseas do not accept rupee deposits.

But who will want to plan a visit to India amid the anarchy there now, particularly if they have, say, only Rs 25,000 or so, with them. Foregoing that will make more sense than spending more to visit India to complete the deposit amid the hardships they will need to encounter.

The following articles in the Indian media offer some guidelines.


Coverage on Singapore TV

I have been seeing coverage on Singapore television channels as well highlighting the downsides associated with the note ban. There was one this morning which talked about the plight of the rural poor who lived only on the meagre cash they had, with the bulk of them having no bank accounts.

With 85% of the notes in circulation made illegal they are the ones badly hit.

Not many in Singapore will have been affected by the demonetisation that Mr Modi perhaps thought would make him India’s finest Prime Minister. Since assuming power his mission has been to hog all limelight with theatrics, belittling the contributions of his predecessors in an ostensible effort to erase them from history.

People are dying standing on quests in front of banks and Finance Minister Arun Jaitley is emphatic the government could not have done anything better.

My earlier posts on the issue:

G Joslin Vethakumar


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