Tuesday, November 15, 2016

How NRI can exchange Rs 500/1000 Notes Overseas

Ever since Indian PrimeMinister Mr. Modi announce demonetization of Rs 500 and Rs 1000 notes, many NRIs, PIOs and other Indians residing overseas are worried about how to convert their cash which is mostly in the denomination of Rs 500 and Rs 1000. It's very common for NRIs and Indians working overseas to keep small cash of amount 5000 to 10000 when they come back from India.


Many NRI prefers to convert foreign currency to INR before traveling to India to avoid exchange losses and hence they always keep a small amount around 10K to meet their essential cash requirement e.g. buying food at the airport, paying taxi fairs and other common expenses. The problem for them is that most of that money is in terms of Rs 500 and Rs 1000 notes, which is declared invalid from 8th November midnight. Now, no money exchanger is accepting those notes and there is no way to convert those notes into foreign currency.

To make the problem worse, even Indian banks e.g. ICICI, SBI, Bank of Baroda, Axis Bank, and other public and private sector banks which have operations on overseas are also not accepting those notes. This is despite the government direction that NRI can deposit their 500 and 1000 notes into NRO accounts.


So, at the moment, there is no way to exchange those 500 and 1000 notes outside India. If you are an NRI and have some money on five hundred and thousand rupee note then the best way to exchange them is by requesting any friend or colleague visiting India to take and convert them. Though this only works for the really small amount, I don't know any better way at the moment, hopefully, thinks will get clear in a couple of days.


Newspaper, SocialMedia, and TV are all talking about this decision and opinions are divided that whether it's a good decision, bad decision or a disaster move given 85% of Indian currency were in 500 to 1000 notes and Indian economy is totally cash driven, at least 80% economy. If you are visiting India then you can expect some serious inconvenience because most of the ATMs at Airport has no cash and there are still shops which accept only cash, even on International Airports e.g. small tea counters and others.


I have many friends and colleagues who are traveling India for holiday seasons and worried about how to pay their taxi fare :-) as money exchangers are not giving Indian currency anymore on most of the countries e.g. Singapore, HongKong, USA, Canada and the UK.

In my opinion, only time will tell whether it was a good move by the government or not but the inconvenience caused to everybody is the real thing. Not even a single Indian is spared of this change, including Indians staying overseas.

How NRI can exchange Rs 500/1000 Notes Outside India

There are long queues in India on banks and ATMS to convert 500 and 1000 rupee notes and even longer queues to withdraw cash from daily needs and ATM and banks are running short of cash and it's very hard to get cash. This has impacted most to the modern young Indians who are used to ATM cards. I know many of IT people who have lakhs of money in their bank account but no money in their pocket :-).

People are taking leaves to withdraw cash from ATM. So, my suggestion is to send your cash to someone you trust or wait until government announces a clearer way to convert them outside India e.g. on high-commission or on overseas branches of Indian banks.


13 comments:

  1. Is it not illegal to send Indian money through Fedex or DTDC etc??? We are staying outside India and I have 10,000 INR. Mainly keep them for paying taxi fare etc from airport also it helps us to run for another 1-2 days.

    ReplyDelete
    Replies
    1. Hello Paul, yes you cannot send Indian currency via Fedex or DTDC. The only way you can send them is via someone you trust e.g. your friend, colleague who is travelling in India along with the authorization letter. After that, they can deposit those cash in your NRO account.

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  2. if someone who is going to india ,has e.g rs 20,ooo and then can i also give him/her my the same amount along with authorized letter?

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    Replies
    1. Hello @Vijay, that's a tricky question. There is no written rule any where at the moment but I assume an authorization letter and current situation in India leaving no option for NRI to deposit their cash, they would allow, but that's just an assumption based upon common sense. May be if someone who has done this could post his experience that would be helpful.

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  3. I live in Cambridge and have about 10k with me. I am not travelling to India till 2017 year end and don't think anyone I know is traveling to India either. What are my options?

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    Replies
    1. Hello @Shweta, There is no option for you right now, just keep your cash until 31st March 2017 and hope government will announce a better policy for NRI, which will allow them to covert or deposit their cash at overseas.

      Other than that, you can always donate your cash to temple if you like.

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    2. How can I donate to temple if I am not in India?

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  4. why is modi hell bent on creating problems for NRIS , not only we get double taxed now we have to lose all our money because of his myopic attitude. We should all close our bank accounts in India maybe that will teach these jokers a lesson

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    Replies
    1. Though I wouldn't agree completely but clearly no thoughts given to people living outside country even after 40 days shows Modi's team is not quite competent and only highlight bad execution.

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  5. Hi I am in saudi arabia i having 20k cash all are 1000 Rupees notes and dont have plan to travel to india before june 2017, i am sure i will loose my 20 k after 3 days

    ReplyDelete
    Replies
    1. @Anonymous, unfortunately yes, though, you are not alone, there are many NRIs holding cash in old Rs 500 and Rs 1000 notes amounting Rs 5000 to Rs 2000 in overseas with no choice but to write-off them. There are few lucky one who sent their money with their friends or colleagues to India.

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  6. We are staying in France and hold about 25k in old notes mostly to meet first few days of expense when we arrive in india. Now its going to be use less . I came across many people who are in similar situation and all can certainly prove it source/income. In the end it looks like open theft by RBI and GOI otherwise they would have given some thought to NRIs. I have sent many emails to RBI and received assurances that GOI is looking into it and yet we do not have clear directive, only to hear about penalties for holding on old notes.

    ReplyDelete
    Replies
    1. Completely agree with you, this is ridiculous, just imagine how much money NRIs would write off.

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