IMPHAL, India -- Landing in New Delhi, my wife and I
anticipated that the wedding of our younger son, Rob, in India's far northeast
would be full of cultural surprises. But a more immediate revelation came via a
note slipped under our hotel door early the next morning: The rupees we'd
bought at the airport were suddenly obsolete per a snap demonetization by the
Faced with oceans of unreported "black money," the
government had stunned the country by declaring on Nov. 8 that all 500- and
1,000-rupee notes (about $7.50 and $15, respectively) would need to be
exchanged for new bills. Suddenly, 86% of Indian money, by value, was
technically invalid. Strict daily swap limits and lack of replacement currency
created a still-evolving cash crunch.
(Editor's note: Black money is not counterfeit but rather
legal cash earned through illegal activity. Recipients of black money must hide
it, spend it in an underground economy or attempt to launder it.)
For us, Delhi was just a pit stop on a five-flight odyssey
to Imphal, in the state of Manipur. The JW Marriott Hotel New Delhi Aerocity
had no problem with my credit card, but from there, it was fiscally downhill.
As of last Thursday, international travelers could exchange up
to 5,000 rupees of old greenish-yellow and red-colored Gandhi Series notes per
week at international airport counters with transactions subsequently recorded in
travelers' passports. But the currency booth at the regional Imphal airport was
closed when we arrived two planes later.
Bigger airports were hardly better.
Businesswoman-on-sabbatical Sarah Mawdsley landed in Kolkata from England on
Nov. 13, en route to Varanasi. A "huge queue" in the arrivals hall
led her to an open exchange outside, and a significantly discounted rate. "I
don't need to tell you that they were totally ripping off the tourists,"
she said. "Queues for the ATM were huge, but worse than that, there
actually was no cash in the ATMs. I queued for more than one hour on the first
Taking meals in hotels where credit cards could be used was "quite
an expensive option," and a neighborhood bar lacked beer because it couldn't
pay the supplier. As Mawdsley pointed out, "The cost to local business is
The whole country seemingly spiraled into currency shock.
The tourist allowance rose from an initial 2,000 rupees a day, but new bills
were scarce, and ATMs initially weren't configured for the new, larger
2,000-rupee bill. ATM lines in Imphal's market area stretched down the block
and around the corner. The Hindustan Times reported that residents in Rajasthan
were treated to the irony of young tourists from Germany, Australia and France
playing music and performing on the streets, their signs reading "You can
help us" and "Money problem."
More seriously, an estimated 70 deaths associated with
withdrawal hardships within two weeks of the currency announcement were cited
by the Press Trust of India. Causes ranged from exhaustion while standing in
long queues to suicide. The deceased included 11 bank employees and children
who reportedly died after hospitals, ambulances and auto rickshaws refused to
accept the old notes.
American tour operators reported various adjustments to the
disruption. Packages such as those offered by Insight Vacations are prepaid, so
the callback "does not affect us," public relations vice president
Arnelle Kendall said.
G Adventures' prices remained stable, but the local office "advised
our customer-service group that the rupee decommissioning would be an issue for
approximately three weeks following the announcement," reported Kim
McCabe, the operator's U.S. public relations strategist.
Rob Ferguson, a Hong Kong-based nongovernmental organization
development director and photographer touring on a package with his OB-GYN wife
via Nature Safari India, was caught in the currency buzzsaw.
"We were lucky, as we were in the jungle, where all
expenses [except tips] were prepaid, so not too badly affected there," he
said. Then came the rupee revocation.
"As we got to Delhi, it was terrible," he
recalled. "We had 20,000 rupees in 500 notes [about $300] that were 'illegal'
to use, and nobody would accept them. Suddenly, we had no money. None! Worse
was there was no way of getting any. No one could help. Bank queues were five
hours long, with no guarantee. ... So no money for a taxi, no money to get to
the airport, no money for food.
"We were lucky we only had one day in Delhi, and we had
hired a car previously," he said. "We went to the national museum and
paid with a credit card. We went to the museum of modern art and were turned
away, as we could not pay."
As for our group, across the five cities we would visit, a
proliferation of stationery-sized signs warned that recalled bills would not be
accepted, resulting in repeated turn-downs at souvenir stands, roadside dhaba
restaurants, etc. It became hard to break bigger bills to tip bellmen, maids
and other working people, who themselves were stuck.
Kerry Bajaj, who moved to Mumbai from New York in October,
also witnessed the locals' problem: "Our cook was able to get money
changed, but the new currency is 2,000-rupee notes, which is quite a big bill.
She takes a rickshaw to get to work, and none of the rickshaw drivers have
As of Nov. 18, cash exchange for locals was reduced from
4,500 to 2,000 rupees a day, and as of Nov. 25, old-series, larger-denomination
bills could only be deposited at banks rather than exchanged. By the end of the
year, the old bills will be worthless.
Cat-and-mouse workarounds arose, with a surge in
booking-then-cashing-in railway tickets (a practice now blocked), and a run-up
in gold prices. For us, an unlikely source of walking-around money came from my
son's Hindu ceremony, during which honored males, including the groom's father,
aka me, received usable, small bills from the congregates.
Son Rob, fortified
by cash wedding presents of varying denominations, successfully off-loaded "old
money" to settle a hotel bill only because Oinam, his feisty, locally born
bride, noted the size of the wedding party and dropped the right names.
Moving to Guwahati, a larger city, we began a week of
celebratory touring. Recalled Alex Rubin, a Chicago-based business development
executive and friend of the groom: "I went on a walk in Guwahati looking
for an ATM, and all were either shuttered or out of service. And even if they
worked, the maximum withdrawal would have been around $33, and I would have had
a $5 charge from my bank. Loan sharks offer better fees."
At the Kaziranga National Park rhino sanctuary in Assam, old
bills were accepted for park fees. A flesh-and-blood tank crossed the road just
feet behind our bush truck, and a sunrise elephant ride in the tall grass was
fabulous. But the system at our package-booked, fairly posh hotel was unable to
process three different credit cards, which would have left us hanging had it
not been for what we were now calling "The Bank of Rob."
Settling a tab for lunches, drinks and gift shop items, we
stepped away while Oinam's Hindi harangue convinced the desk staff that it was
on them, not her, to stand in line with old bills if they wanted to get paid.
By Thanksgiving, a full-service operator such as Abercrombie
& Kent India could voice hope that things were settling down. A&K
spokeswoman Jean Fawcett said, "There is shortage of new currency without
any doubt, but ... all our guests' arrangements are prebooked, which means they
don't really require currency usage, with the exception for tipping and
As for a resolution, Fawcett said she was hopeful that by
the end of November "the new currency will be available in free supply for
further easing of day-to-day transactions. We are advising our guests to carry
smaller denominations of U.S. currency ($1, $5, $10 and $20), as these can be
used for tipping, if required. And also, smaller denominations are easy to
exchange at the hotel exchange counter if they have new currency available."
Rob Ferguson was lucky: Just before he left, his agent was
able to convert his soon-to-be-useless rupees into dollars.
By our Nov. 20 departure, son Rob could access his bank
account via an ATM at the Guwahati airport (but only after two locals maxed out
some dozen bank cards as those behind them fumed).
By then, we'd off-loaded most of our old rupees, which
proved to be a good move. "Currently, nobody is going to buy those notes
anywhere in the world, except the banks in India," Vipul Kapadia of Castro
Valley, Calif.-based Currency World USA, told India-West. Kathryn Ellis, a
company spokesperson for my bank, Wells Fargo, said after our return, "We
will reintroduce the new notes at an appropriate time."
We did have a final transaction before starting our homeward
journey. Driving in India is an exercise in vehicular chicken, and our two
chauffeurs had been terrific at navigating in traffic, around cows and over
roller-coaster roads for a week. So it was with mixed feelings that I gave them
handsome tips in the condemned money. I was pushing the luggage trolley before
they could unfold the bills.