The Indian government’s surprise decision to pull Rs500 and Rs1,000 banknotes out of circulation from midnight Wednesday has put Nepali migrant workers in India in a fix as they have not been able to send money back home since remittance companies will not accept them.

 

According to the decision made by the Indian government, only airports, hospitals and gasoline stations will accept these large-denomination notes for the next 72 hours.

 

Delhi-based remittance companies engaged in transferring money between Nepal and India said

that even though Nepali migrant workers will have a hard time for some time, it will have a positive impact on remittance flow in the long run.

 

These firms have stopped transactions following the government decision.

 

Mostly Nepali workers who do not have bank accounts in India will face problems. They have been asking remittance companies for help to send money home saying that their relatives in Nepal were in acute need of cash.

 

“Restaurant workers, security guards and ordinary labourers will face problems for a short period of time,” said Bharat Karki, deputy representative of the Indian branch of Everest Bank.

 

He added that people with proper bank accounts and identity cards would have no trouble depositing or withdrawing money.

 

Workers who receive their salaries in cash are having a hard time exchanging large-denomination banknotes in the absence of proper identity cards. Account holders can transfer money without any problem. Remittance companies have asked people not to panic.

 

Sunil Mishra, Prabhu Money Transfer representative in India, said that even though there will be problems for some days, it will have a positive impact on Nepal-India remittance flow.

 

“This will help to curb illegal money transfer from India to Nepal,” Mishra said. He said that people with small banknotes could transfer money without any problems.

 

Nepali citizens are permitted to transfer IRs5,000 per month to Nepal through remittance companies in India. India’s central bank said that the biggest reason for scrapping large-denomination banknotes was an abnormal rise in fake currency notes in higher denominations and a high incidence of black money in the system.

 

It said that the notes could be exchanged for value, and people would get value for the entire volume of notes tendered at its branches.