Money exchanges in UAE refuse to deal with Rs2,000 Indian banknotes after rollback

Hazem Helmy, Staff Reporter

Exchange companies in the UAE refuse to deal with the Rs2000 Indian banknotes, after the Indian government decided not to approve it by September 30, under the pretext of combating money laundering, and other considerations.

According to exchange companies licensed in the country, 1 dirham equals about 22.5 Indian rupees, and therefore (2000 rupees) equals about 88.8 dirhams, that is 24 dollars.

Muhammad Abdul Razzaq Al-Mutawa, founder and partner of Al-Razouqi Exchange, says: “Exchange companies in the UAE refuse to deal with the Indian banknote (2000 rupees) issued by the Central Bank of India since 2016, after the Indian central bank banned dealing with it to combat money laundering.”

Al-Mutawa added, "The Indian Central Bank also gave individuals who own the currency a deadline until the end of September, in order to exchange it in India, where only 20,000 Indian rupees will be allowed to be deposited."

The Indian government introduced the 2,000 rupee banknote in 2016, after it decided to withdraw all 500 and 1,000 rupee banknotes from the market.

The Indian government said in a previous statement, “It is easy to store large-value banknotes, and therefore the government wants to withdraw large-value banknotes to avoid black money.”

The founder and partner of Al-Razouqi Exchange explained that some local banks in the Emirates offered tourists from India to buy this category (2000 rupees) at a slight rate lower than the price offered in the market, to help them meet their needs and shop in the Emirates before returning to their country, so as not to lose this money. The currency is worth more, especially since it won't be recognised 4 months from now.

15% increase in remittances

Adel Ahmed Al-Khoury, Executive Director of Al-Badr Exchange Corporation, said: “Months ago, our customers stopped using this banknote of this category, after a rumour spread among the Indian community residing in the Emirates that the government in their country decided not to adopt it by the end of next September.”

Al-Khoury added, "We refuse to accept this category at present, and until the competent authorities in India are officially authorised to deal with this category again, so that there is no confusion and mistrust with our customers."

Al-Khoury revealed that during the second quarter of this year, remittances abroad increased by more than 15%, supported by an increase in remittances during the month of Ramadan and Eid Al-Fitr, and India topped the country with the most remittances abroad.

The owner of an exchange company says: Tourists from India came to us to convert a banknote (2000 rupees), and we refused to transfer this denomination because of the news that spread that it will be suspended after months from now.

He added: We advise tourists to keep this paper and exchange it in their countries when they return to it, so as not to lose its value significantly.