A large sucking sound can be heard in India as more than 15 trillion rupees (the 1,000 and 500 notes) were ruled illegal. Asia’s third-largest economy is experiencing a liquidity crisis.
      The change came November 8, when Prime Minister Narendra Modi announced currency notes of 1,000 rupees ($15) and 500 rupees ($7.50) would no longer be legal in an effort to curb black market activities and terrorism.
      The news sent truckers and express operators scrambling to get to the bank as 90 percent of business in the country is done in cash.
      The banks were not ready. As you read this, most are still unable to satisfy demand as everyone is unloading the notes.
      Trucks were stuck because fuel pumps, tolls, and wayside eateries refused to accept cash payments in 500 and 1,000 rupee notes.
      According to reports, upwards of 90 percent of the country’s million trucks have been affected, with some now parked on highways and roadsides.
      The result? Deliveries of vegetables, food products, and even medicines have been delayed.  
      “The entire supply chain took a punch in the nose,” a source said.
      “The money squeeze is being felt from networks of suppliers and distributors to sales teams. It has spread all over the country as everyone is running short of cash.”
      But while revenues have frozen, fixed costs, including wages, continue.
       
Welcome to The Cash Queue

      Although in many quarters wages are paid online, employees are now faced with needing time away from work to queue at the bank.
      As a result, production is slowing in many places.
      In the understatement of the year, Vijay Kumar, Chief Operating Officer of the Express India Council India (EICI is the body that aims to protect and promote the common interests of Express Industry and its members) said, “transporters should have been given more time to take care of their cash situation.”
      With around 9,300,000 truckers as members, All India Motor Transport Congress (AIMTC) said trucks are stranded around the country and government action is needed at once.
      AIMTC President Bhim Wadhwa told FT that the “sudden ban on higher denomination notes have made drivers stand in long queues before banks in different parts.
      “The withdrawal limit is minuscule, and with ATMs in many places not working or out of cash, the transport business is in crises,” he said.
      “The transport sector is the highest taxpayer to the exchequer, but right now the road transport fraternity of India is facing its worst crisis with the sudden banning of these notes coupled with the inability to get money to replace them,” Bhim Wadhwa said.

      Right now alongside the transportation and other India business, Mr. Ordinary Indian (or Aam Aadmi in Hindi) has been waking up early every morning to try to beat the crowds at his nearest bank.
      With the December 30 deadline looming to trade in the rupees, ordinary Indian people are utilizing some interesting alternatives.
      Current conditions have seen the rise of apps (like one app that shows where ATMs are located).
      A Delhi-based startup called Book My Chotu offers ‘Chotus,’ or errand boys, who will stand in line for you at the ATM for 90 rupees an hour.
Geoffrey