India is suffering through a cash shortage that resulted in ATMs running out of money and citizens standing in long lines to exchange notes that no longer are valid.
According to a report by Bloomberg, a government official said the cash shortages will continue through November and into December. Bloomberg noted Indian banks are suffering after Prime Minister Narendra Modi's announcement last week that the government would get rid of 500-rupee ($7.40) and 1,000-rupee ($14.80) notes. The government is trying to stop fraud and increase transparency with its currency. The notes, which represent 86 percent of the money in circulation, has left lots of Indian citizens with little to no cash, reported Bloomberg. The government has deployed soldiers and security officers to banks to handle the ever-growing crowds, which have remained calm and patient. They are all trying to exchange their currency amid a restriction on withdrawals of 4,000 rupees ($59.21) per person.
The government is working on printing new 2,000-rupee ($29.61) notes, an unnamed Finance Ministry official told Bloomberg.
"It’s a good move by the government to curb black money, but it is full of hassles for common people like us," said Pushpendra Pankaj, a worker at New Delhi’s Municipal Council, who had been waiting over an hour at a Canara Bank branch. Making the cash problem even worse is the fact that India has to reconfigure its cash machines so they will dispense the new notes, which Bloomberg said don’t fit into the cash trays that are already in existence. Until the cash machines are updated, they can only give out 100-rupee notes, Bloomberg reported.
Manoj Joshi, a fellow with the New Delhi-based Observer Research Foundation, told Bloomberg the long lines at banks across India demonstrated the government wasn’t prepared to handle the transition of this magnitude. "The whole exercise is premised on the fact that you’ll be able to implement it quickly and effectively. Governments in India simply don’t have that ability,” said Joshi.