The ban on 500 and 1000 rupee notes has caused much mayhem, especially in Mumbai. People who own small businesses and those who have a lot of cash at home have been scrambling since last night. But the problems that this move has caused aren’t just related to these issues. This decision has had far-reaching consequences on traffic fines, the finances of Indians living abroad, and the stock market too!
Drive Fast, and You Won’t Drive the Next Day
With the new fines that have been implemented, the amount you have to shell out for offences like speeding and not using a helmet range between 500 to 1000 rupees. These fines were merely 200-300 rupees before. “A lot of people who have been fined since last night only had 500 and 1000 notes to offer. We have given them challan receipts and have seized their licenses,” says a traffic cop stationed at Nana Chowk, Grand Road.
People who are caught breaking traffic rules will sadly not be able to drive for two days at least. “Once the banks open and people exchange their notes and get new notes, they can take their licenses back by paying the fine. The fines we collected yesterday were paid in 500 and 1000 rupee notes, and they amounted to 6000 rupees. We will deposit this amount once banks open,” he adds.
Indians Living Abroad, Fret Not
The ban on Indian currency notes of the denominations of 500 and 1000 hasn’t just affected people living in India. Indians living abroad, who possess liquid cash, scrambled to understand what they should do with it last night. This is especially true of those people who will not be returning to India before December 30, which is the deadline to exchange banned notes.
A few people have raised their concerns about this issue, as the first comment in this article highlights. Indian students studying abroad and Indian travellers in foreign destinations need not fret; a provision has been put into place. You can deposit the banned notes that you possess in your Non-Resident Ordinary Rupee (NRO) account.
For those who do not have such an account, the picture is still foggy. Aarohi Damle, a 21-year-old student currently studying in Amsterdam, says that most Indian students have not opened NRO accounts, which means that they cannot avail of this facility.
“I have four 500 rupee notes with me right now, which may not be a very large amount, but I’d still like to exchange it. Most students have no information regarding the whole process of exchanging money,” she says. Aarohi intends to try exchanging the banned notes at a foreign exchange facility at the airport. “But this option will end up costing me €10, and I will get only roughly €30 for my liquid cash. There is no assurance that my money will even be accepted for exchange,” she says.
If you are out to buy a cigarette from your regular cigarette shop on credit, forget about it. The tapriwaalas are refraining from giving their customers credit. “Since today, I have stopped giving credit to my customers. Approximately 300 customers visit my shop every day. Usually, the number of regular customers who purchase cigarettes on credit is less, but today, even they cannot avail of it,” says Chaman Bhai, who owns Symphony Panshop.
The famous 40-year-old shop keeps credit accounts for several customers, but this decision by the government has kept the practice on hold for now. “Business has drastically reduced today. I am not even offering credit to my loyal customers. I don’t have any change left for myself,” he adds.
Light at the End of the Stock Market Tunnel
The stock market has taken a hit due to the cumulative effect of the ban on 500 and 1000 Rupee notes and Donald Trump’s win. The morning of November 9, the market was down by roughly 950 points. In the short run, this may seem like a significant low, but experts are of the opinion that the ban on these denominations of Indian currency and the result of the US elections are beneficial in the long run.
If only one of these events had occurred, perhaps the fall in points would not have been so much, says a source who is an expert on finance and the stock market. While it may seem surprising to some, Trump’s win is likely to have had a larger impact on the Indian stock market than the ban on currency notes, the source adds.
“If black money starts flooding into the system, the government will have the finance to spend on infrastructure projects and development. For the salaried class and the population that is close to and below the poverty line, this is a brilliant move,” the source says.
As for the result of the US Election, experts believe that Republican presidents have always been better for Indo-American relations. Kimberley Ann Nazareth, a researcher at the Institute of Peace and Conflict Studies, and a PhD student, says, “Indians perceive candidates of the Democratic Party as being more favourable than Republicans, but it’s not so.”
Additional reporting by Neerja Deodhar and Abhishek Rawat