Monday 06 / May / 2024
Muscat: Scrapping INR500 and INR1,000 notes will sound the death knell for hawala, the illegal money transfer system, a senior official from a money exchange house in Oman said.
And thousands of worried Indians in Oman holding the notes have been told they cannot change them here.
That means changing their savings to the new currency will require multiple trips to India.
“The hawala system will come to an end. It’s a surgical strike from the Indian government. Now, those who are holding unaccounted money back in India to run the hawala system will be in a fix because of the demonetising of notes from Tuesday night,” Tonny George Alexander, director, Oman UAE Exchange, told the Times of Oman.
Omanis and Indians alike were warned last night by Oman’s Embassy in India to carry receipts for any currency carried to India and to ensure no defunct notes are taken.
On Tuesday night, Indian Prime Minister Narendra Modi axed the two biggest denomination notes, INR500 and INR1,000, in India in a bid to tackle black money, which he said was a barrier to India’s growth.
In the hawala system, an Indian can hand over money to an agent in India and a friend or family member here in Oman can collect it from a local agent, minus a fee.
According to the money exchange house boss, this move will end the flow of forged notes.
“It will also end fake notes entering the Indian market as the new proposed notes will have higher security features,” he said.
The exchange house boss added that the move will deter Non-Resident Indians (NRIs) from investing in property in India as the majority of purchases are completed using black money.
“Eventually, the prices of property will also come down as demand will go down when NRIs purchasing properties will go down,” he added.
Indian Ambassador to Oman, Indra Mani Pandey assured all Indians living in Oman to wait until they receive further instructions.
“I along with some other ambassadors have requested the government of India to issue an advisory as it is an issue which concerns Indians living not only in Oman but other parts of the world. SBI Muscat has confirmed that it is not authorised to change the currencies and has not received any fresh instructions. The same is for Bank of Boroda,” he said in a statement issued on Wednesday night
Indians in Oman, who are holding high-denomination Indian notes, were in a Catch-22 situation after Modi’s bold move.
Many woke up to the shock news and were looking for answers as to how they could exchange the notes.
“I checked with money exchanges, then I went to banks to change my money, but nobody is accepting INR500 and INR1,000 notes,” said Sudhakar, an Indian expat residing in Oman for the last two decades.
An SBI Muscat official said they had been inundated with at least 500 calls checking whether they can exchange the notes or not.
Even the exchange houses are not very clear on how to clear the INR500 and INR1,000 notes they have.
“We are waiting for more clarity on this issue,” Alexander said.
Deepak Chandra, chief manager, Mustafa Sultan Exchange, Ruwi Branch, admitted that their branch is currently holding a large number of INR500 notes.
“We are in touch with our head office on what to do next, but we are not accepting any INR500 and INR1,000 rupee notes,” he said.
So what are the Indian resident’s options if they are holding these high value denominations?
“You can carry your old notes to India and you will be able to deposit them into banks or post offices until December 30, 2016,” an official said.
And if you are not travelling this year, you can still change them until March 31, 2017 by furnishing an identity proof.
But then the maximum amount of money you can carry to India is INR25,000 (OMR144).
“And if you have more money, then you will probably have to make multiple trips,” a financial expert said. Flight tickets to India are not cheap. “Even the cheapest ticket to any Indian destination will be around OMR80 (INR14,000). Then there are other costs involved.
“So you can hardly save any money like that,” the financial expert added.
The other option is to authorise another person in India to deposit the notes.
According to Reserve Bank of India’s guidelines, if you have old banknotes, you may authorise in writing, enabling another person to deposit the notes into your bank account.
“The person so authorised has to come to the bank branch with the banknotes, the authority letter given by you and with a valid identity proof (valid identity proof would be any of the following: Aadhaar Card, Driving License, Voter ID Card, Passport, NREGA Card, PAN Card, Identity Card issued by government department, public sector unit to its staff.”
Meanwhile, the Sultanate’s Embassy in New Delhi and its Consulate General in Mumbai, have urged citizens, who are travelling to or are in India, to take a receipt for currency exchange and make sure it is the new currency.
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