In the wake of the cash crunch following demonetisation, foreign missions in the country have sought their withdrawal limit be raised to $5,000 per week to be able to disburse salaries to Indian staffers.
The diplomatic missions pay many of their Indian staffers in cash, especially service staff such as the maids, drivers and gardeners.
Many missions have asked the staffers to open bank accounts. “We have asked them to open bank accounts. But due to the rush in banks, it will take a while before they do so,” said a senior diplomat.
He added, “Disbursing this month’s salary will be an issue. We hope the situation will improve in the coming months.”
Some missions also pointed out another problem related to dealing with a predominantly cash-economy— paying rent. Some of the foreign diplomatic staffers, who rent houses, have written agreements that stipulate a part of rent be paid
in cash. “These are legacy issues that need some sorting. It could take a while, some of us are in touch with landlords to find a way out,” said another diplomat.
Dean of diplomatic corps in the capital, the Dominican Republic ambassador Frank Hans Dannenberg Castellanos said, “We are in touch with ministry of external affairs on the issue of cash crunch. The ministry has taken a positive approach to deal with our grievances and find solutions in coordination with other ministries. We also understand this matter is dealt by the ministry of finance,”
He said there was also discussion among various missions on requesting the government to raise the withdrawal limit. “These demands vary from mission to mission. We should ideally have a situation where the embassy accounts, not the personal accounts of diplomats, should have a higher withdrawal limit,” the envoy said.
Government officials said an inter-ministerial committee is looking at the issues raised by the missions and soon they would come out with recommendations.