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NEW DELHI – The first people showed up at the bank long before dawn, forming a line in the cold and the smog and silently waiting for the chance to withdraw their own money. They left more than seven hours later, each holding the handful of bills, worth $60 at the very most, that they'd been allowed to take home.
By midday, the lines snaked back and forth across the parking lot outside the Axis Bank branch in central New Delhi. Occasionally, a policeman carrying a long bamboo club would slap someone who stepped out of line. No one complained. In a crowd like this, largely working-class and uneducated, no one talks back to a policeman. Especially not one carrying a club.
"They keep telling us that that this is good, and maybe they're right," said Shahida Parveen, a 36-year-old woman whose family had almost no usable money left. "But I don't see anything good happening."
This is just one bank, in one city, in a country of 1.3 billion people, millions of them increasingly desperate for cash amid a chaotic government effort to crack down on corruption by banning high-denomination currency notes.
Last week, Prime Minister Narendra Modi announced in a surprise nighttime TV address that all 500- and 1,000-rupee notes, worth about $7.50 and $15, would be withdrawn immediately from circulation, a move designed to fight corruption and target people who have been dodging taxes by holding immense stockpiles of cash, known in India as "black money."
In a nation hobbled by corruption, and where less than 3 percent of people file tax returns, the plan at first earned widespread approval.
But as the days ticked by, it became increasingly clear that the government was ill-prepared for a plan that suddenly pulled 86 percent of the country's money supply out of circulation.
Families began hoarding small-denomination currency, merchants reported plummeting business and salaries went unpaid. Many businesses were refusing to accept the only new note rushed into circulation, worth 2,000 rupees, because they were unable to make change for it. The government says it's also trying to get new 500-rupee bills into circulation, but they remain rarities.
Modi acknowledged the transition to the new currency might be briefly difficult, but said the government "spent long hours trying to figure out how to minimize the inconvenience."
"The poor are now enjoying a sound sleep, while the rich are running around to buy sleeping pills" because of anxieties over their hoarded money, he said.
But in the parking lot outside the Axis Bank, no one was talking about a sound sleep.
"This is only to harass people like us," said Parveen, a stay-at-home mother whose husband works as a small-time broker for rental properties, but has had no work for the past week. Hundreds of millions of Indians do not have bank accounts and use only cash. Many businesses only accept cash. "The people with all the black money, they'll find a way to manage."
She's right. The price of gold spiked in the hours after Modi's announcement, as the rich looked for ways to get rid of their old currency. Accountants say there has been a surge in questions about laundering cash, with one saying a client had come in admitting he needed to get rid of more than $5 million in discontinued notes.
Others have used a range of ploys, from buying expensive train tickets that can be refunded later, to getting fake receipts, backdated to before Modi's announcement, to make their black money look legitimate.
"Do you see anyone with black money here?" demanded Chote Lal, 59, who had taken the day off from his office job to wait in line. "Only the poor are getting hurt. Who else is suffering?"
A New Delhi businessman with connections to underground currency traders said it was still fairly easy to exchange the withdrawn currency — as long as you're willing to pay twice the legitimate exchange rate to get rid of the old notes.
"They can take as much as you need to get rid of," the businessman said, speaking on condition of anonymity to be able to speak freely about illegal transactions.
How are money launderers getting rid of outdated currency? Some are presumably using corrupt bureaucrats or banking officials. Others, however, are getting help from people in line at tens of thousands of banks across India.
Some of those waiting at Axis, like Parveen, were there to exchange their own money. She pulled a wallet from her purple-and-pink purse, revealing two crumpled 100-rupee notes and two 50-rupee notes, worth a total of about $4.50. It was all her family of five had left to spend, at least until she got to the front of the line and could exchange 4,000 rupees in the old currency.
But it was an open secret that more than a few of those waiting with her were being paid to exchange currency for wealthier people.
"I'm not doing that, but many of these people are exchanging for others," said Sahil Saluja, a young airline employee, gesturing around him. He eventually gave up waiting after more than four hours in line.
The often-shifting regulations allow a one-time swap of 4,000 rupees, or about $60, in exchange for smaller notes to meet immediate needs. That limit was raised to 4,500 rupees on Wednesday. The government insists the system will be back to normal by the end of the year.
Overwhelmed banks had no reliable way to ensure that people didn't line up more than once, so on Tuesday, the government announced that banks would begin using indelible ink to mark the fingers of people swapping scrapped currency notes. India uses the same system during elections, to stop people from voting repeatedly.
Old notes can be deposited into bank accounts before the end of the year, though the government says it will investigate deposits above 250,000 rupees, or about $3,700. Immense fines will be levied on anyone found to have been illegally avoiding taxes.
But for at least the next week, and perhaps many weeks, hours-long bank lines and strict limits on withdrawals (most people are limited to about $30 a day), mean lots of frustration ahead.
The government, meanwhile, insisted all was well.
The "public need not be anxious," said a weekend statement from India's national Reserve Bank. "Cash is available when they need it."
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