Demonetisation: Families of Gulf expat hit by cash crunch
- Demonetisation has made 85% cash available in ₹500 and ₹1000 invalid.
- Cash crunch has hit rupee remittance transaction to India through instant cash transfers and bank transfers.
- Many villages have collection points of the instant cash services from where the transferred money reached the families of expats.
It has been almost three weeks since high-value notes have been demonetised and it has led to cash crunch situation across the nation. Now the Indian expats living and earning in Gulf countries are facing serious trouble as sending money to their families in India has become difficult due to the cash crunch.
The families of the expats are not able to withdraw cash from banks since demonetisation has made 85% cash available in ₹500 and ₹1000 invalid and there is a limitation on withdrawal of money.
Many families living in India are dependent on the money their earning member living in Gulf countries send which they usually collect from banks, shops, and nearby post offices.
Many villages have collection points of the instant cash services from where the transferred money reached the families of expats. Mostly, these villages do not have banks, and at present, the families are facing difficulty in withdrawing money.
As per a Gulf News report, a staff member of a money exchange in Abu Dhabi confirmed that cash crunch has hit rupee remittance transaction to India through instant cash transfers and bank transfers.
This cash crunch situation is also preventing the expats from making most of the low exchange rate of rupees that can get them better returns. The exchange rate of the rupee is falling yet not many Indian are sending money to India since there is no way to withdraw the cash in India.
The Gulf News quoted the staff member as saying, "Whenever rupee goes down against dollar, there was a huge rush; but not now,”
He further explained, "We used to do at least 250 transactions of Indian rupee a day, which has gone down to between 70 and 80. Around 60 to 70 were instant money transfers to India, which have been reduced to six or eight a day because collection centres in India do not have currency notes to disburse to their clients,”
Families living in rural areas are dependent on small shopkeepers and post offices for the money transferred from Gulf since banks are not easily accessible. Instant cash transfers is another effective way to transfer money from Gulf countries to India which has been badly affected by the cash crunch.
To facilitate the money transfer, Western Union is also allowing direct to bank account services in which consumers will have the option to get remittances through account payee cheques.
COO of Express Money, Sudhesh Giriyan, confirmed that small amount of cash is being disbursed and for the higher amount of money cheques and bank account transfers are being facilitated.
In terms of numbers, Sudheer Shetty, the president of UAE Exchange said that 70% to 80% remittance transactions are by using banks and rest is via instant cash transfers which have been impacted by the cash crunch in India.