As a tourist travelling to India, if the recent demonetization has you confused and concerned, here’s all you need to know to manage your stay in India.
What is demonetization: The Government of India in its bid to crackdown on corruption, black money and counterfeit money, on 8th November, 2016, declared all Rs. 500 and Rs. 1000 notes as invalid, with immediate effect. Essentially, these notes need to be exchanged with new Rs.500 and Rs. 2000 denominations at banks. Now, the 500 and 1000 rupee notes accounted for 86% of all cash transactions across the country and replacing them is a massive logistical exercise. The Government has put restrictions on how much money can be exchanged by individuals and where the old money can continue to be used. At this moment, it is a very fluid situation and all banks and ATMs across the country are facing massive queues to exchange money.
How this impacts tourists: Many businesses in India, especially budget guesthouses, hotels, tourist sights, restaurants, buses and taxis do not have facilities to accept card payments. As people have till 30th Dec to deposit old notes, some businesses may accept the old notes but most will not. Local transport can also prove to be a challenge as cabbies and auto rickshaws donot have the means to accept plastic currency. Tourists cannot reply on ATMs to withdraw cash either, as even locals are queuing up to get their hands on some cash and there is a cap of Rs. 2000 on ATM withdrawals at one time.
Can you survive without cash: While it has been difficult, digital payments are widely accepted, especially in cities by most tourist facing businesses. Fleet ab services like Uber and Ola allow for online payments, as do most culinary establishments. In fact, the many digital wallet services, like Paytm and Freecharge are even offering exclusive discounts and cashbacks for transactions done via wallets. These may be used by foreigners by transferring money from their credit/debit/travel cards to the wallet – you will need to download the app to use their services. If you are planning to go in the interiors, it may be a good idea to stock up on some petty cash in the cities, you can save the cash for those places and transact exclusively via online payments where you can.
For cash: As on 25th Nov, foreigners have been permitted to exchange foreign currency up to Rs 5,000 per week. Best place to do the exchange is at the international airport itself. Necessary entry to this effect will be made in their passports. Please be vary of touts who may offer to exchange your foreign currency with Indian rupees – they will probably use illegal means to get the money exchanged, if at all.
Where you can use old currency: You can use up the old notes to pay for your flight at airports & to purchase train tickets at the railway stations. You can also use old currency to buy medicines at pharmacies. Petrol pumps (Gas stations) will also accept old currency. Note that from 25th Nov (and till 15th Dec) only old Rs. 500 notes are being accepted. These options are not available for old Rs. 1000/- notes.
As it is still a developing story, there are new updates coming in every day, and new regulations may get added. So do double check all the information you get online and account for more time where you need to do cash transactions because of the disruption. For other details, check rbi.org.in, where they’ve put an exhaustive list of FAQs that should come in handy.
Indians are quite ingenious in adapting to new realities and you can be sure that hotels/traders and individuals will quickly figure out ways to get back to business. And you can also leverage on empathy of the locals as they are facing the same issues as you are. Ultimately, this is what may help you the most, to cope through this period of transition.