Bangladeshi travellers, who intend to go to India and have Indian rupees in their possession, and foreign exchange houses plunged into trouble after the Indian government scrapped its large-denomination currency notes of Rs 500 and Rs 1,000 from Tuesday midnight.
Indian prime minister Narendra Modi announced in a televised address that all 500- and 1,000-rupee notes had no cash value but could be exchanged by taking lower denomination notes at banks in India by December 30 as an initiative to unearth black money.
As a result, the Bangladeshi travellers who already purchased Indian rupee from different money exchange houses before going to India and money exchange houses that deal with Indian currency, are now in trouble as they do not know what to do with Rs 500 and Rs 1,000 notes.
Most of the Bangladeshi travellers purchase thousands of rupees from money exchange houses, which usually hold the currency without informing the Bangladesh Bank, without endorsing in their passport.
Although there is no official figure on how many Bangladeshis travel to India every day, the High Commission of India issues around 3,000 visas for Bangladeshi travellers in a day.
One of the travellers, an official of a private firm, told New Age that he bought Rs 20,000 from a money exchange firm last week as he is scheduled to visit India next week. ‘All of my Indian currency are in Rs 1,000 denomination. I have already contacted the money exchange firm from where I bought the rupees for selling, but they declined to take those back,’ he said.
Another traveler at a Motijheel exchange house said that he bought around Rs 10,000 at a rate of Tk 1.25 from the house, but they were now offering Tk 1.15 for the currency.
Officials of money exchange houses said that they usually sold notes of Rs 500 and Rs 1000 denominations as people bought those in large volume.
Money Changers Association of Bangladesh organising secretary MS Zaman told New Age on Wednesday that the money exchange houses are now at a loss as to how exchange the Indian rupees as those were not recognized as convertible currency by
the International Monetary Fund.
‘A number of money exchange houses are legally holding the Indian rupees. We do not know how to exchange the scrapped rupees’, he said.
Bangladesh Bank and the government should take initiative in solving the problem as soon as possible, he said.
A BB official told New Age that the central bank had already issued a letter to all banks asking them to inform the central bank in the quickest possible time whether they held any Indian currency.
He said that the central bank would take a decision today as to what type of measure it would take to exchange the Indian rupee.
The central bank also discussed with the local officials of the State Bank of India about the matter, he said.
The BB official, however, said that no money exchange house held any Indian rupee, according to the central bank’s data warehouse.
Ripon Ahmed, a money exchange official, said that huge number of clients had requested him to exchange the Indian rupees.
He said. ‘We are accepting the request but giving them a lower price than that of original rate. We will send the currency to India bypassing the banking sector’.
Dhaka Bank managing director Syed Mahbubur Rahman told New Age that the latest move of the Indian government to scrap its highest-denomination currency notes would not create any adverse impact on the country’s banking sector.
‘The banks are usually holding US dollar, euro and British pound as the currencies are internationally convertible. As far as I known, most of the banks do not hold Indian currency.’, he said.
Modi in his televised address assured that Indian people holding the discontinued notes would be able to deposit them in banks and post office savings accounts before the end of the year, and that new bills for 500 and 2,000 rupees were being printed and would be sent to the banks soon.
He said anyone making large bank deposits in the coming weeks would find themselves being the target of Indian tax authorities.
‘A few people are spreading corruption for their own benefit,’ he said in the speech. ‘There is a time when you realise that you have to bring some change in society, and this is our time,’ said the Indian prime minister.
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