NEW DELHI // The first people showed up at the bank long before dawn, forming a line in the cold and the smog and silently waiting for the chance to withdraw their own money. They left more than seven hours later, each holding the handful of bills, worth $60 (Dh220) at the very most, that they had been allowed to take home.
By midday, the lines snaked back and forth across the parking lot outside the Axis Bank branch in central New Delhi.
Occasionally, a policeman carrying a long bamboo club would slap someone who stepped out of line. No one complained.
In a crowd like this, largely working-class and uneducated, no one talks back to a policeman. Especially not one carrying a club.
“They keep telling us that that this is good, and maybe they’re right,” said Shahida Parveen, a 36-year-old woman whose family had almost no usable money left. “But I don’t see anything good happening.”
This is just one bank, in one city, in a country of 1.3 billion people, millions of them increasingly desperate for cash amid a chaotic government effort to crack down on corruption by banning high-denomination currency notes.
Last week, prime minister Narendra Modi announced in a surprise nighttime TV address that all 500- and 1,000-rupee notes, worth about Dh27 and Dh54, would be withdrawn immediately from circulation.
The move was designed to fight corruption and target people who have been dodging taxes by holding immense stockpiles of cash, known in India as “black money”.
In a nation hobbled by corruption, and where less than 3 per cent of people file tax returns, the plan at first earned widespread approval.
But as the days ticked by, it became increasingly clear that the government was ill-prepared for a plan that suddenly pulled 86 per cent of the country’s money supply out of circulation.
Families began hoarding small-denomination currency, merchants reported plummeting business and salaries went unpaid. Many businesses were refusing to accept the only new note rushed into circulation, worth 2,000 rupees, because they were unable to make change for it.
The government says it is also trying to get new 500-rupee bills into circulation, but they remain rarities.
Mr Modi acknowledged the transition to the new currency might be briefly difficult, but said the government “spent long hours trying to figure out how to minimise the inconvenience”.
“The poor are now enjoying a sound sleep, while the rich are running around to buy sleeping pills” because of anxieties over their hoarded money, he said.
But in the parking lot outside the Axis Bank, no one was talking about a sound sleep.
“This is only to harass people like us,” said Parveen, a stay-at-home mother whose husband works as a small-time broker for rental properties, but has had no work for the past week. Hundreds of millions of Indians do not have bank accounts and use only cash. Many businesses only accept cash.
“The people with all the black money, they’ll find a way to manage.”
She is right. The price of gold spiked in the hours after Mr Modi’s announcement, as the rich looked for ways to get rid of their old currency. Accountants say there has been a surge in questions about laundering cash, with one saying a client had come in admitting he needed to get rid of more than $5 million in discontinued notes.
Others have used a range of ploys, from buying expensive train tickets that can be refunded later, to getting fake receipts, backdated to before Mr Modi’s announcement, to make their black money look legitimate.
“Do you see anyone with black money here?” demanded Chote Lal, 59, who had taken the day off from his office job to wait in line.
“Only the poor are getting hurt. Who else is suffering?”
Overwhelmed banks had no reliable way to ensure that people did not line up more than once, so on Tuesday, the government announced that banks would begin using indelible ink to mark the fingers of people swapping scrapped currency notes. India uses the same system during elections, to stop people from voting repeatedly. Old notes can be deposited into bank accounts before the end of the year, though the government says it will investigate deposits above 250,000 rupees. Immense fines will be levied on anyone found to have been illegally avoiding taxes.
But for at least the next week, and perhaps many weeks, hours-long bank lines and strict limits on withdrawals, mean lots of frustration ahead.
* Associated Press
