Money transfer exchanges in Qatar are witnessing a substantial drop in their businesses due to cash crunch in India induced by demonetisation move.
Expats can make remittances through money exchanges here either directly to bank accounts back home or transfer money as cash to beneficiary, called instant money transfers. While these cash transfers have been badly hit, remittances to banks are seeing a growth with many cashing in on a record low exchange rate of rupees, according to sources.
“We are seeing some 20% to 25% fall in instant cash transfers as with the Western Union, Xpress Money and also other financiers. This is because these agents in India do not have cash with them to help with transaction and hence the remittances have been affected,” said Zubair Abdulrahiman, Operations Manager, Al Zaman Exchange.
Hence, Indian expatriates in Qatar are finding it hard to send money to their families back home due to the continuing cash crunch in India.
India had discontinued 500 and 1,000 denominations from its currency on November 8, making the bills illegal tender. Despite government assurances to pump in enough currency bills, the move has resulted in scarcity of cash in the market. With cash shortage and limited withdrawals allowed, people are lining up outside banks and ATMs across India for hours.
“We are seeing some 10% reduction in instant cash transfers,” said Mathai Vaidian, General Manager, Qatar- UAE Exchange.
“Cash to cash (instant cash) transfers have fallen because collection centres in India do not have currency notes to disburse to their clients. Even when considerable amount of money is transferred from here, relatives back home can just get some Rs2,000 or Rs4,000. Rest of the amount is given as cheques. Then again, people have to go to banks to cash in on these cheques.” Many Indian labourers depend on instant money transfers which are very convenient for their families to receive money from designated collection points. Not all villages enjoy the presence of an ATM or bank in India and so various instant cash services have collection points at post offices or even small shops. Workers from villages, where access to banking system is limited, mainly depend on instant cash transfers.
“There is no bank in my place; still I do have a bank account in city branch of a major bank. I had to use instant money transfers as there is an emergency at home. Still my family cannot get the whole amount I just sent; the situation is very difficult,” said Sunil, a blue-collar worker.
“People use instant money mainly because their families back home are in urgent need. So if the payment is not happening, people will refrain from utilising the service. Hence, we are seeing more people going for bank transfers,” Vaidian, GM Qatar-UAE Exchange, said.
However, most Indian expatriates are yet to cash in on a record low exchange rate. Many expect a further slump in rupee. “There is a slight increase in bank transfers, but not as much as we expected. Families in India are unable to withdraw cash from their bank accounts or ATMs.
Also, people are expecting a further slump in the exchange rates and so there is a reluctance to remit now,” Abdulrahiman said.
