India’s ATMs are back online, following the government’s surprise announcement this week that 500 rupee and 1,000 rupee banknotes could be not used as legal tender after midnight Tuesday.
But they’re certainly not back to business as usual, with withdrawal limits now imposed until the government can get its currency situation back to normal.
The national headache started when the Indian government imposed a ban on the banknote denominations favored by criminals, as a way to flush out huge amounts of money from India’s shadow economy.
This means that citizens must now either go to a bank, identify themselves and fill out a form to exchange old notes in amounts of 4,000 rupees.
This also means that criminals must weigh whether to divulge or lose their ill-gotten (and untaxed) gains — assuming they were not previously converted to gold or laundered overseas, a weakness in the banknote plan that some in the financial industry have pointed out.
The old notes can be redeemed at banks for either existing 100 rupee notes or for new 500 rupee or 2,000 rupee versions.
For the time being, however, only 100 rupee notes are available from ATMs, whose systems must be updated in order to validate the new banknotes.
As a result, multiple news outlets have reported, 100 rupee notes are in short supply, leading banks to impose an ATM cash withdrawal limit of 2,000 rupees per day through Nov. 18. The Reserve Bank of India has asked the nation’s banks to waive ATM fees given these circumstances.
According to a report by livemint:
Banks such as HDFC Bank Ltd., Axis Bank Ltd., and ICICI Bank Ltd., said that if their customers transacted on own-bank ATMs, the transaction will be free of cost till 30 December — in [the] case of some banks it is till 31 December. Banks charge you a transaction fee if you transacted more than five times at your own bank’s ATM.