TORONTO – A number of Canadian residents have suddenly found themselves with worthless wads of cash after the Indian government abruptly scrapped its highest-denomination currency notes this week.
On Tuesday, Indian Prime Minister Narendra Modi announced in a surprise broadcast that his government was withdrawing all 500 and 1,000 Indian rupee notes — which are equivalent to about $10 and $20.
He said the action was being taken to combat corruption, money laundering and counterfeiting in India, where there is a significant amount of so-called undeclared, untaxed “black money.”
People in India were told to deposit their discontinued notes in banks and post office savings accounts before the end of the year. They were also told they could exchange limited amounts for new 500 and 2,000 rupee bills that are being delivered.
But for anyone with the cancelled currency outside India — including members of the large Indian diaspora in Canada — there appears to be confusion on what to do with the discontinued bills.
The High Commission of India in Ottawa said it did not yet have any official guidance on the matter.
“We have written to our national Reserve Bank. We are waiting for their response,” said Prem Selwal, attache consular with the commission.
A number of Canadian residents who have the discontinued notes, either left over from past travel, received as gifts from Indian friends and family, or kept as spending money for future trips back to their country of origin, have spent the last few days frantically trying to exchange their rupees with little success.
Some have explained that they haven’t typically exchanged their rupees in Canada in the past due to the unfavourable conversion rate.
Now, however, they’ve been left with banknotes that have no cash value.
“I personally feel it’s a complete wastage of my money,” said Sachin Jindal, a Toronto resident who tried to exchange his rupees at multiple locations since Modi’s announcement.
Jindal explained he typically keeps about 15,000 rupees — roughly $300 — on hand for travel to India so he has money available when he lands in a country where a large amount of daily transactions are conducted with cash.
The 30-year-old has no plans to travel back to India for at least a year, which means he would miss the Dec. 30 deadline to turn in the old bills at an Indian bank, as well as a March 31 deadline to bring the bills in to certain special offices with a declaration form.
“It’s very much frustrating,” he said. “If the government has to take these steps, at least for the people living abroad who don’t have access to the banks, they should be provided with some minimum time amount or they should be provided with a place that they can go and convert it.”
Monika Baser Paretha is in a similar situation.
The 31-year-old mother of two was in India a few months ago and still has a few thousand rupees which she now doesn’t know what to do with.
She’s also heard from friends in similar situations who are contemplating sending their discontinued rupees back to India with anyone who might be travelling to the country soon. But Paretha isn’t entirely comfortable with that idea.
“I don’t know if that’s a good option,” she said. “We don’t know what to do, and there are so many friends with the same problem.”
Paretha noted that she was happy with the objectives behind Modi’s action on the rupees, but just wanted a way to comply with the changes from abroad.
She reached out to a few Canadian banks for advice on the matter but hasn’t received responses that help.
TD Bank said all Canadian banks, including its own branches, are “unable” to process, buy or sell transactions of Indian rupees.
A spokeswoman said Modi’s announcement had made exchange rates for rupees unavailable until further notice. Wire payments are not affected.
The Royal Bank of Canada said it would be unable to buy or sell rupees in any denomination until it is given details on when the new banknotes are available and in circulation.
“We are advising clients to hold on to their existing banknotes until we receive further clarity around the circulation of new ones,” said spokesman AJ Goodman.
Some in Canada have suggested a central government-mandated point to swap the discontinued bills for the new rupees as a solution.
“A way needs to be figured out,”said Pankaj Agrawal, who heard of Modi’s announcement through his mother in India. “You can imagine the amount of money that is stuck here.”