It's not every day that a country decides to scrap two of it's most popular currencies, the 500 and 1000 rupee, let alone scrap them and tell everyone the night before.
Yet this is what happened to us while we were in Bombay. In order to cut down on blackmarket money and counterfeit bills, India's Prime Minister Narendra Modi decided to pull this bold move.
The government announced they would put a limit on how much cash you could turn in without imposing major penalties and fines up to 50% of your money. Luckily for us we had limited money to exchange. It still took us about an hour and half of chaos at the bank turn the old currency in.
Once we exchanged what we had, our problems weren't over. All ATM machines were down for several days and when random ones started reopening they would have lines around the block and run out of cash within hours. On top of that, few businesses accept credit cards so needless to say we had to be careful with our money.
Almost everyone we've talked to here is supporting this crazy strategy despite the major inconveniences many are facing. India is largely a cash based economy so there are millions who will be affected by this including the massive wedding industry. Many families pay for the weddings in cash and spend years saving for it. The restaurants in Goa are empty because so many people canceled their trips to avoid the hassles so we're sure the tourism industry is taking a huge hit. Also, remote poor people who live too far from a bank can have piles of cash saved up that may now be worthless.
Anyway, it was interesting to witness a country thrown into financial chaos for more than a month. Considering the stress it's causing so many people we sure hope the long term benefit is worth it and does what their hoping. Only time will tell...