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Demonetization Hits a Low Note With Indians and Trade Mission Delegates


Indian rupees, including one of the new bills on the left.

My problems due to India’s prime minister’s demonetization of 500 and 1,000 rupee notes didn’t amount to a hill of beans compared to what the average Indian has had to put up with, but it was still upsetting. I couldn’t exchange money at the airport before I arrived in Delhi, and therefore I couldn’t tip the people who helped me with my luggage and showed me to my room. Nor could I buy a Pepsi Light. Bill Edwards of EGS who was attending the trade mission on behalf of Denny’s later told me he used U.S. dollars to tip, something that never occurred to me. I hate being an ugly American.

I never did exchange my dollars to rupees even thought I traveled from Delhi to Mumbai and then to Sri Lanka. The hotel in Delhi didn’t have cash on hand when I showed up at 3 a.m., and I didn’t have the fortitude to stand in line at an ATM. 

 As we drove around Delhi the next day, we witnessed long lines at every ATM. Bank customers were only allowed to withdraw 2,000 rupees a day (a little less than $30). And there was no guarantee there would be rupees the next day — if they had the time to return. One of the locals told us the sad story of a man who collapsed while in line and no one dared leave their place in the queue to help him. He later died.

The reason the bills, the most popular denominations, were taken out of circulation was the government’s way of cracking down on people not paying taxes. Eliminating 85 percent of the bills before new ones were printed in mass caused some panic, but it also was a step in moving the economy toward a cashless society.

The majority of transactions in India are in cash, we were told, but mobile wallet has seen a 200 percent growth in the two weeks following the announcement. The two newspapers delivered to my door at the Sofitel in Mumbai had front pages wrapped with an ad for paytm, a system for paying via one’s mobile phone.

Mobile phones are common in India, 1 billion-plus people “can hear you now,” according to the CIA World Factbook, although that’s not the case in the rural or the poorest neighborhoods. In 2010, when I visited Kenya with Dunn Bros Coffee, I was surprised at how many Kenyans paid their bills, transferred money to their relatives and paid for purchases with their phones. They clearly were ahead of the curve.

While the shift from paying cash to using credit cards is inevitable, one young woman who does PR for a law firm told me that unlike Americans, Indians tend to only buy what they need and save the rest. Some of those savings were in the bills that were eliminated, thus the panic. It will be intersting to see whether Indians thrifty ways continue when faced with using credit cards. "Visa and MasterCard must be happy," one of the commercial officers said.

And yet, the marketing vice president for the Delhi franchisee of Domino’s and Dunkin Donuts, Amit Ambekar, said there was no loss to their business after the monetary crisis.

At the airport in Colombo, we were able to easily exchange our money. I’m always amazed at the thick wad of cash my $40 wins me. It’s deceiving, however. And even though I feel rich now, I will try to spend it all before I head home. After one trade mission, I decided I’d exchange my money during my layover in Amsterdam even though I’d probably lose some profit in the transaction. After the agent counted all my bills and change, she looked at me, not bothering to hide her irritation and sighed. It added up to about $3 and after her fee, I’d owe her money.

The charity bucket that seems to be a fixture at all international airports was the beneficiary of my international wealth.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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