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India's shock bank note ban sparks cash chaos

Wednesday, November 09, 2016 - 01:43

Indians struggle to pay for basics goods like food and fuel and wonder how to get hold of their cash, after India suddenly withdraws 500 and 1,000 rupee notes from circulation in a bid to flush out money hidden from the tax man. Hayley Platt reports

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Chaos at a chemist in India as customers rush to buy medicines with money they may soon be unable to spend. The government is withdrawing 500 and 1,000 rupee notes from circulation. It's part of a crackdown on corruption designed to boost tax revenues. (SOUNDBITE) (Hindi) A CHEMIST, SAYING: "We are only giving medicines to people who need them for emergency purposes and not to those who just want to get a change of 500 rupee notes." The Federal bank showed off a new 2,000 rupee note. Which is hopes will eradicate counterfeit money. (SOUNDBITE) (English) RESERVE BANK OF INDIA (RBI) GOVERNOR, URJIT PATEL, SAYING: "For ordinary and common public, the looks of fake Indian currency notes is similar to genuine notes which makes it difficult for them to distinguish fake from genuine." Nearly 40 percent of India's economy is driven by small and medium sized businesses. And cash remains king. To make matters worse the banks have closed for two days while they adjust. SOUNDBITE (English) PANMURE GORDON MARKET COMMENTATOR, DAVID BUIK, SAYING: "They'll suceed with what I call the wealthy classes in flushing it out, but the man who's got a little business in a small village or somewhere three miles outside of Jaipur has got no chance I don't think." One report estimates India lost almost $350 billion to the black market between 2002 and 2011. And President Modi's ruling Bharatiya Janata Party has had some success. Last month it raised $10 billion through a tax amnesty for Indians to declare hidden income and assets. ///

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India's shock bank note ban sparks cash chaos

Wednesday, November 09, 2016 - 01:43