20 December 2016
Two money exchange houses in Oman saw a dip of at least OMR1.2 million in Instant Money Transfer (IMT) as recipients in India continue to face difficulty in withdrawing cash following the Indian government’s November 8 decision to scrap Rs500 and 1,000 notes.
“The IMTs have fallen by 15 per cent. The loss would be approximately OMR700,000 during the last month,” Madhusoodanan R, General Manager at Global Money Exchange, managed by the State Bank of Travancore, said.
“IMTs are going down, especially those destined for northern India,” he added.
On November 8, Indian Prime Minister Narendra Modi announced that at the stroke of midnight, some Rs14 trillion worth of 500- and 1,000-rupee notes – 86 per cent of all the currency in circulation – would no longer be legal tender, pushing the Indian economy into chaos.
Another money exchange house boss said they witnessed a 50 per cent dip in IMTs to India.
“We have suffered a dip of OMR500,000 during the past one month. As recipients in India are facing difficulties in withdrawing remitted money, senders are not doing it through IMTs,” Rajan B, General Manager of Al Jadeed MoneyExchange in Oman, said.
So far, non-resident Indians holding the scrapped currency have not been offered any practical and easy options by the Indian government to exchange the currency. Those receiving these remittances back in India are facing difficulty in withdrawing the remitted money.
As banks and ATMs are drying up due to cash crunch, NRIs had begun sending money by IMTs to Western Union and other agencies in India.
However, as they are also facing cash crunch, recipients have been given cheques.
“I had sent money to my mother through IMT. But instead of giving liquid cash, the outlet had given her cheque. Now, she has to stand in a long queue and face hassles to get the money,” Sunil Kumar K, a resident in Muscat, said.
“Many NRIs are now not remitting money as it’s quite difficult for the recipient to withdraw it. They are waiting to see if the situation improves,” Sunil added.
Money exchange houses confirmed that cash crunch due to scrapping of Rs500 and Rs1,000 notes had resulted in 10 to 20 per cent fall in remittance from Oman.
Tonny George Alexander, director, Oman UAE Exchange, said the problem in cash transfers has affected his business.
He didn’t quantify the decline but conceded a drop in business.
“As recipients are facing issues, those remitting money are holding back and waiting to see whether the situation becomes better,” he added.
Recently, a senior official of the SBT had said the Indian government has set up a panel to look into non-resident Indians’ concerns about scrapped Rs500 and Rs1,000 notes.
“The government has set up a special ministerial committee to look into NRIs’ concerns regarding the currency with them in these denominations. Soon, they will come up with a solution,” CR Sasikumar, SBT managing director, said.
The Indian ambassador in Oman also confirmed the move and assured that NRIs’ concerns in this regard will be addressed.
“Moreover, we have requested the government to issue an advisory for NRIs regarding demonetisation,” Indra Mani Pandey, Indian ambassador to Oman, had told the Times of Oman earlier.