Home >Politics >Policy >Foreign ministry seeks relief for diplomats on cash withdrawal ceiling

New Delhi: The ministry of external affairs has asked the finance ministry to issue directives to banks to allow foreign diplomats based in India to withdraw money on a priority basis on presentation of their identity cards.

This was to help diplomats tide over a fund crunch after demonetization, given that missions are allowed to withdraw only Rs50,000 a week.

Many envoys had complained that the limit was a big constraint, causing a shortage of resources for embassies to carry out their daily tasks.

Foreign ministry spokesman Vikas Swarup said the dean of the diplomatic corps, Frank Hans Dannenberg Castellanos, who is also the Dominican Republic’s ambassador to India, had met foreign secretary S. Jaishankar on Thursday to discuss the issue.

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“The finance ministry is being asked to issue directives to banks to allow embassy officials with identity cards to withdraw money on a priority basis," Swarup said. “We appreciate learning from the dean that the vast majority of foreign missions understand that the demonetization exercise is being conducted to combat the menace of black money and tax avoidance. We are confident that the missions would bear with the temporary difficulties that arise in that process, even as we seek to address their concerns."

Earlier this week, Castellanos had said that foreign embassies planning high-level visits by their leaders to India were confronting a funding crunch after demonetization.

Countries such as Indonesia and Tajikistan were among those that had planned high-level visits to India. “Many embassies have teams of protocol officials or security officials travelling in advance of the visits and these are also in trouble because the withdrawal amount by embassies is curtailed," Castellanos said.

Problems were also being faced by Iranian, Cuban and Sudanese nationals who travel to India and tend to use cash rather than credit or debit cards given that these countries are under international sanctions, he said.

“Some of them have Indian currency which they have taken home with them given that they travel to India often for tourism, (medical) treatment or business. Now, the question is, if they are not able to return by 30 December, what will they do?" he said.

Prime Minister Narendra Modi on 8 November announced the demonetization of Rs500 and Rs1,000 notes in a crackdown on black money, counterfeit notes and terror financing. On 18 November, the government announced the formation of an inter-ministerial committee to answer questions about demonetization from foreign missions, Indian expatriates, money changers abroad as well as foreign tourists.

Swarup had earlier said that the foreign ministry had received queries from New Delhi-based diplomats on how to access funds earmarked by their governments for diplomatic activities.

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To answer these and related queries, the inter-ministerial panel headed by an additional secretary in the finance ministry had been set up, Swarup said, adding that its response was awaited.

His comments follow a letter written by Russia’s ambassador to India, Alexander Kadakin, to the foreign ministry earlier this week after the State Bank of India informed the embassy that the cash withdrawal limit for embassies was Rs50,000 per week under the Government of India directives, without exceptions unless otherwise advised by the Reserve Bank of India.

“Such an amount is totally inadequate as regards the embassy’s salary and operational expenditure requirements," PTI cited Kadakin’s letter as saying. Retaliatory measures being contemplated include restriction on cash withdrawals by Indian diplomats posted in Russia, a Russian embassy official said, according to the PTI report.

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