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India's ATMs overwhelmed as government demonitizes 500, 1,000 rupee notes

November 10, 2016

ATMs all across India went offline Wednesday after an abrupt announcement Tuesday evening that, as of midnight, 500 and 1,000 rupee banknotes would no longer be legal tender.

According to multiple media reports, long queues snaked around ATMs as account holders sought to exchange larger notes or simply obtain 100 rupee notes to pay for everyday expenses on Wednesday.

The currency shakeup by the Indian government was part of a plan to bring a huge, unaccounted-for portion of India's wealth into the banking system, curbing political corruption and tax evasion and setting India on a path to cashlessness.

According to a report by Shanghai Daily, anyone holding the discontinued banknotes will have to bring them to a bank and exchange them for new 500 and 2,000 rupee notes, which were to be available on Thursday, Nov. 10. The report said it could take two to three weeks to complete the changeover.

The Indian government's main opposition party said the move would be especially hard on citizens in rural areas that lacked access to traditional banks.

The opposition also claimed most of the corrupt wealth in what the government calls "black money" has already been converted to gold or other currencies abroad.

In a BBC report, one financial services sector employee said he would have to take time off from his job to exchange notes at a bank.

To exchange just 4,000 rupees, he will have to complete a form and show proof of identity to exchange no more than 4,000 rupees, "which is likely to cause further chaos," Shanghai Daily reported.

The BBC report said an Indian man who wanted to withdraw 3,000 rupees at an ATM to send to his family in another state was unable to do so.

"I have only 500 rupees notes at home," he told the BBC. "I don't know if I will be able to send the money."