2100 Cr Rupees Lying In in Gulf
By Irfan Mohammed
Dubai: Syed Adil ur Rahman, native of Hyderabad and Peetani Lalitakumari of Tanuku in West Godavari are living in Saudi Arabia. They are in possession of three bills of 1000 rupee note with them, which they carried along with them during their last vacation from India.
They are not traveling to India for next year, they don’t know how to exchange the note. Like them there are some lakhs of NRIs in Gulf region who are waiting to exchange the notes of 500 and 1000 – the bills scrapped by Narendra Modi government.
It’s not merely the matter of Rs. 500 and Rs. 1000 notes for NRIs of any level as comparison with their income in Gulf however, the total number of NRIs that living in the region and holding the minimum amount of Indian currency notes is significant.
Over 70 lakh NRIs living in Arabian Gulf countries, according to Indian government statistics. Saudi Arabia hosts largest number of Indians numbering over 33 lakh, followed by United Arab Emirates with 28 lakh NRIs.
Any Indian, whether newly recruited or returning from vacation, arriving to Gulf will land with at least Rs. 3000 cash to meet unforeseen emergency. If so, then the total amount can be approximately 2100 crore rupees! It may even exceed that.
The money was easily exchanged by local exchange houses known as Sarraf in Arabic that is available in all down towns across the Gulf countries, from Bur Dubai in Dubai, UAE to Batha in Riyadh, Saudi Arabia.
These money exchange houses not recognized by Indian Reserve Bank and Foreign Exchange Management Act (FEMA) 1999 of India. Trading of Indian currency abroad is not permitted. Yet money exchange houses in Gulf sell and buy Indian currency from visiting Indians.
However, the money exchange houses stopped to receive any scrapped notes immediately after announcement by Prime Minister Narendra Modi on November 8.
Some money exchange houses in Oman are selling their stocked Indian notes to NRIs at discount price to minimize the losses.
For any reasons, No NRI can travel back to India to change his Rs. 500 or Rs. 1000 bills before December 30 in local banks or RBI offices prior to 31 March 2017.
Indian embassies abroad can’t handle any public cash transactions and even Indian banks such as SBI and Bank of Baroda can’t accept Indian notes.
In the past, Indian rupee served as the medium of exchange in Gulf states excepting Saudi Arabia for a long time. Facilities were in place to exchange Indian currency notes collected by Banks in Gulf with British sterling. However, this currency arrangement led the conversion into sterling of large amounts of Indian notes that were smuggled out, representing proceeds of smuggled imports of gold and other commodities into India, which caused a substantial drain on India’s foreign exchange reserves.
Gulf countries turned to their own currency only after 1966, Prime Minister Indira Gandhi decided to devalue the rupee in the aftermath of Chinese invasion.