Malaysian moneychangers await instructions from India

KUALA LUMPUR: Moneychangers nationwide will no longer buy or sell Rs500 or Rs1,000 (RM32 or RM65) notes, pending instructions from India.

The Malaysian Association of Money Services Business (MAMSB) said it had yet to receive clear guidelines from the Indian High Commission here and advised customers trying to exchange their notes, which were no longer legal tender since Wednesday, to wait.

“We are engaging all our counterparts but information is scarce right now. We may need to wait a few days for clarity and for the markets to adjust to the new norm,” MAMSB chief executive officer Shalini Pavithran said.

She advised customers to refer to the guidelines provided by the Indian government if they intend to travel to India to exchange their notes.

She also called on customers who came across money changers who bought these notes at a lower rate to report to the association, as it was a violation of their code of conduct.

Anyone facing difficulty in ex­chan­ging foreign currency may contact the association at 03-7722 5808.

Indian Prime Minister Narendra Modi announced on Tuesday that the widely used Rs500 and Rs1,000 banknotes would be withdrawn from circulation at midnight as part of a crackdown on rampant corruption and counterfeit currency.

A report by Washington-based think-tank Global Financial Integrity estimated that India lost US$344bil (RM1.5tril) in illicit fund outflows between 2002 and 2011.

Consortium of Indian Industries in Malaysia chairman Umang Sharma said the discontinuation of the popular bank notes would disrupt businesses in India but foresaw no major impact on companies and local travellers here.

He said those holding rupees here might face penalties for keeping the currency out of circulation but did not expect locals to have trouble exchanging their cash.

“They can still declare but they will have to explain why they were keeping the cash,” he said.

Malaysian tourists with rupees can change up to Rs5,000 (RM324) using the two notes at any airport exchange counters.

People can exchange their money at banks and post offices in India until Dec 30, 2016 so long as they have proof of identity and exchange.

If you are not in India, you may authorise someone there to get the notes deposited into your account but there needs to be a letter of authorisation, your valid identity card and the person must be physically present at a bank there.

The money can be deposited into your trustee’s account if you do not have an Indian bank account of your own.

People who have Rs500 or Rs1,000 notes after Dec 30 can exchange the notes at the Reserve Bank of India by providing a declaration. This will be allowed until March 31, 2017.