As India crowds banks from Arunachal to West Bengal, some say the pain is worth the eventual gains

On Friday, three days after the demonetisation of Rs 500 and Rs 1,000 notes, people across India left their banks with brand new pink notes in their pockets and a million-rupee question on their minds: How on earth were they going to get change for Rs 2,000?

When Prime Minister Narendra Modi made the demonetisation announcement during a sudden television address on Tuesday evening, he spent a good 20 minutes convincing Indias not to panic. Honest citizens, he said, would be willing to shoulder a few days of inconvenience for the sake of the opportunity to crack down on black money. Besides, the Reserve Bank of India had a plan in place to pump new notes back into people’s pockets by the end of the week.

Banks and ATMS were to be shut on Wednesday to allow them to restock, Modi said. But from Thursday, all banks and post offices would allow peole with identity cards to exchange old notes with a face value of Rs 4,000 for new notes. From November 11, ATMs would be re-opened and citizens would be able to withdraw up to Rs 2,000 per card till November 18, and up to Rs 4,000 per card after that.

But the ground reality on Friday was different, because stocking every bank and ATM in a vast nation of 3.3 million square kilometres is almost a logistical impossibility. As many banks ran out of Rs 100 notes, several ATMs stayed closed and people struggled to get by with depleting liquid cash, Scroll.in collected stories of people’s experiences from across the length and breadth of the country.

Arunachal Pradesh: A state running out of small change

With most ATMs closed across the North Eastern state, there were serpentine queues outside banks, with people anxious to exchange their old notes. The problem, however, was that the entire state seemed to have run out of small change. People with the new Rs 2,000 notes were left stranded, as shopkeepers, vegetable vendors and even petrol pumps had no change to give them.

This led to chaos outside banks. In Itanagar, branches of the State Bank of India had to call for extra police to control the crowds. Chief Minister Pema Khandu appealed to people not to panic, but banks in many district headquarters are yet to receive adequate cash. In remote areas, even the new Rs 2,000 notes are yet to arrive, while currencies of smaller values are fast running out.

As a political fallout, both the Bharatiya Janata Party and the Congress have practically stopped campaigning in Hayuliang constituency, which had fallen vacant after the death of former Chief Minister Kalikho Pul. It is common for politicians in Arunachal to offer monetary and other favours. With cash flow severely restricted, this isn’t possible.

Assam: Banks giving just Rs 1,000 per person

In Lower Assam’s Barpeta district, ATMs have no money and banks are exchanging notes valued at just Rs 1,000 per person. “They said from Monday there would be more money,” said Aditya Lakhar, a social worker from the district’s Lachina village.

Banks in his area are few and far between – one grameen bank half a kilometre away and a State Bank of India a kilometre away. Since most of the district is very poor, with the poorest having no more than Rs 100 or 200 on them, Lakhar believes they have not been affected in a very big way. “The public has said this is a good thing to take out black money,” he said. “For one or two days we will have problems but later we will be free.”

Bihar: Labourers have stopped going to work

In a village in Bihar’s Samastipur district, many daily wage workers have stopped going to work. The reason: their contractors only pay them in old notes of Rs 500 or Rs 1,000, which have no value any more. One such labourer, Raju Rai, who has an account with the State Bank of India could not withdraw money because the branch in his village did not yet have the new notes. The main branch of the bank is in Patori block, about 20 km away. But villagers were not willing to make that trip immediately, after hearing about the long wait outside the banks.

Ranjeet Roy, another labourer, tried to deposit his old notes in his local bank, only to be given disappointing news: “The bank officer said that if I deposit cash, I would only get the money after 15-20 days.” Despite these problems, however, many villagers seemed confident that the government’s move would eventually flush out “forged notes” from the market.

In Patna, meanwhile, an Andhra Bank official who did not wish to be named said: “We have run out of money. And I do not know why the government announced this without making enough money available. We have customers getting angry at us, and our superiors do not know when more money will come.”

Gujarat: ‘Government ration shops are closed’

In many parts of the Saurashtra region, farm labourers have not been paid for three days and farmers have been unable to sell their cotton and groundnut produce. To ensure that the poor are able to put food on the table, the central government had announced that state-run ration shops and milk booths would have to accept the old Rs 500 and Rs 1,000 notes till November 11. But little has been going according to the government’s plans in some parts of rural Gujarat.

“Government ration shops are closed in this area,” said Keval Rathod, a social worker from Una. “Not all petrol pumps are open. And even the post office here is saying they don’t have orders to exchange or deposit notes.” On Friday morning, most banks in the area stopped exchanging money, claiming that they were completely out of cash.

“Private medical stores are also not accepting old notes, which is a problem because our entire taluka does not have government-run chemists,” said Rathod. “The ones inside civil hospitals are free of cost, but they only have some limited medicines.”

Karnataka and Telangana: Business is slow

Business is slow in Karnataka’s Gulbarga town, where fruit and vegetable vendors are struggling to make sales. “Everyone has only Rs 500 notes and no one wants to accept those,” said Rashida, a social worker in Gulbarga. “I have not seen any ATMs working yet.”

Fortunately, many daily wage labourers in the town had recently opened zero accounts with banks, and had new identity cards. Unlike many others with no bank accounts, these labourers were able to deposit their Rs 500 and Rs 1,000 notes.

Meanwhile in neighbouring Telangana, banks in Vikarabad district are exchanging notes only for those farmers who recently sold their crops at government markets. “They are not changing the notes of those who sold to private people,” said K Ravinder Goud, a farmer activist in Vikarabad.

Madhya Pradesh: Finding ways to convert black to white

“The bazaars are full of people with Rs 2,000 notes and no change,” said Nitin Pamnani, the Gwalior-based founder of e-commerce company Itokri. With 200-300 people lining up outside every small bank and ATM in the city, it will be a while before everyone gets a chance to replenish their wallets with new notes. This is why the batta system is still thriving three days after demonetisation was announced.

Batta, explains Pamnani, involves the open sale of notes, at a discount: People selling Rs 500 get back Rs 450; those selling Rs 1,000 may get back Rs 800.

“I have heard that those with black money worth a few crores are just distributing it among their friends and relatives, offering them some commission to deposit it in their own accounts and convert it into white money,” said Pamnani. “It’s almost like a new job opportunity for those who don’t have employment – everyone benefits from it.”

Meghalaya: A harvest festival amidst a cash crunch

On Friday, Garos in Meghalaya had to celebrate the Wangala harvest festival in the midst of an unprecedented cash crunch. With many ATMs and banks still closed, Rs 100 notes almost exhausted and shopkeepers refusing to accept big notes, people have no option but to restrict their purchases to their most basic needs.

“Some ATMs are only disbursing Rs 2,000 notes, but what is the point of that?” said P Nongbet, a high-school teacher from Shillong. “No one gives you change. Meat sellers are not selling meat unless you buy enough worth Rs 500. I have stopped buying meat and even bread.”

Mizoram: Less cash than other states?

Cash is running short in this hilly state too, a problem exacerbated by Mizoram’s far-flung location. Bankers claim the state has not received as much as liquid cash as other Indian states probably have, and banks are afraid they might run out of legitimate notes much before fresh notes can reach them. Even the largest nationalised bank – State Bank of India – is allowing people to exchange just Rs 2,000 a day, which is half the promised amount of Rs 4,000.

The Aizawl Post reported on Friday that local banks such as The Mizoram Cooperative Apex Bank have not even been able to exchange notes, because barely 5% of their cash reserves were in denominations smaller than Rs 500.

Small businesses have been hit the hardest in the midst of this cash crunch. “We practically stopped selling anything below Rs 100 since yesterday,” said Lalruatfela Chhangte, whose mother runs a small general store in Aizawl. “ It’s better to save up on cash for the moment since there’s no telling when smaller notes are going to be in normal supply. We have seen a drop of 30% in daily sales, and the banks’ situation is not fuelling optimism about how long this will last.”

Odisha: Bank in Naxalite zone has no money

Abdul Ghani, from the Mathili block of Odisha’s Malkangiri district, has been warning villagers against exchanging their higher denomination notes with local goons. “There are goons who take Rs 500 notes from innocent villagers, falsely telling them those notes are useless, and giving them Rs 300 or 400 in return,” said Ghani, who shut his photocopy shop for the past three days because he had no change to give customers.

In Mathili block, only one of the two local banks has had money to give citizens. “The other bank is in the Naxal zone, without security, so they don’t keep any money there,” said Ghani. Besides, many villagers don’t even have bank accounts or identity proof.

Rajasthan: Discrepancy between deposits and available funds

RS Meena is the bank manager at Central Bank in Bhanwargarh block, which has 40,000 accounts. On Friday, account holders, who come to the bank from across the area, some from as far as 25 kilometers away, had made deposits of more than Rs 65 lakhs. But the branch had received only Rs 30 lakh so far from the head office.

“If this discrepancy between users’ deposits and funds being sent continues, there could be problems,” said Meena. “We are already having to tell Kisan credit card holders that they will have to wait before they can withdraw the amounts they need.” After a good crop of soyabean, most farmers need credit and need funds to purchase seeds, fertilisers and hire harvesting machines. “But right now, all work on advances and loans has stopped and we are just busy manning the crowds at the branch,” he added.

West Bengal: An ambushed ATM van

At 11.30 am on Friday, as scores of people gathered outside an ATM on Darjeeling’s Laden Road, the guard had a hard time explaining to people why the machine was not yet operational. The reason: The cash transit van was supposed to refill the machine with Rs 40 lakh by 11 am, but the van was stuck in Siliguri.

“The driver called to say he was stopped by groups of agitated locals at intersections in Siliguri twice so far,” said Maharshi Bharadwaj, an employee at the private bank. ”The locals wanted all the cash in the van to be refilled at ATMs in Siliguri city.”

Several tourists in Darjeeling have had a hard time in the past three days, with little valid money to spend. “To make sure that the available Rs 100 denominations reach the maximum number of persons, we put a cap of 200 currency units on our Forex counter too,” said Bharadwaj.

With inputs from Tongam Rina in Arunachal Pradesh, Adam Halliday in Mizoram and Scroll.in staffers.