Embassies get assurance on cash

A high-level committee headed by an additional secretary in the Department of Economic Affairs is still grappling with the issue of shortage of cash experienced by the diplomatic missions, expatriate Indians, foreign tourists, and money changer associations abroad.

Responding to the concerns raised by the Russian Embassy here that the cash crunch was affecting itsfuctioning, the government said the issues were at the advanced stage of being resolved.

Earlier, the Dean of Diplomatic Corps stationed in Delhi had also raised the issue on behalf of all the missions.

Earlier on Tuesday, in a letter, Russian Ambassador Alaxander Kadakin raised the issue of his diplomats not being able to withdraw enough money thus hampering the normal functioning of the mission. He sought intervention of the External Affairs Ministry so that the withdrawal restrictions for diplomatic staff are lifted. “We are awaiting a reply from the MEA and hope that this is resolved quickly. Otherwise, we will be forced to explore other options which may include raising the issue in Moscow with your Embassy by summoning Indian Minister Counsellor,” a senior Russian embassy official said here. He also warned that options may also include restriction on the cash withdrawals for Indian diplomats posted in Russia. There are approximately 200 staff members in the Russian mission here.

After the demonetization process last month, MEA had said it approached the Department of Economic Affairs over three or four types of requests, including those related to maintaining sufficient flow of funds to diplomatic missions. Official spokesperson Vikas Swarup said a committee under an additional secretary that includes officials from finance and the MEA has been set up to look into the issues. The committee has met several times over the past few days to resolve the issue.

It is also understood that some other countries such as Pakistan, Ukraine and Kazakhstan have also sent letters to the MEA. Pakistan High Commission had threatened a tit-for-tat action and starve the Indian mission in Islamabad of cash against the policies of a private Indian bank which had refused to release salaries of its employees.

According to the Pakistani mission, the bank has imposed additional conditions for withdrawal of salaries. These conditions, which came into effect only last week, make it mandatory for Pakistan officials to fill up additional forms specifying their expenditures and also that they exchange their dollars with the same bank. The officials are upset because the exchange rate is much lower than that offered by the bank. Pakistan has told MEA that the bank in question had chosen to target its mission specifically and not imposed similar conditions on other missions. Sources said after the government’sintervention, the issue between the private bank and the Pakistani mission was resolved.

The MEA has has received four types of different requests on the issue of demonetization, the first concern being the diplomats who are based in Delhi. “Some of them have told us that diplomatic missions require more funds and the existing limits are insufficient for them. They have requested thatthose limites should be increased for diplomatic missions,” said Swarup. 

The second set of issues involves NRIs having cash in  Indian currency currently abroad. The committee is looking into the issue . The money changers’ associations abroad are also asking what they should do with the stacks of Indian currency they have or how to exchange them.