Indian students in the midst of preparations to study overseas are running into stumbling blocks in the process due to the government’s sudden decision to render all 500 and 1,000 rupee notes valueless from last month, said education agents based in India.
India’s Prime Minister Narendra Modi said the decision was made in a bid to crack down on corruption, people with unaccounted wealth, and counterfeiting of notes.
The country is primarily a cash economy, but Modi is pushing for a transition to a cashless society, saying: “It’s correct that a 100 percent cashless society is not possible. But why don’t we make a beginning for a less-cash society in India? We can gradually move from a less-cash society to a cashless society.”
— The PIE News (@ThePIENews) December 15, 2016
Speaking to the agents, The PIE News reported that they don’t believe the international education sector will suffer long-term setbacks from the change, but students currently getting ready to study abroad are facing problems with crucial payments, such as visas and tuition fees.
A daily limit has been imposed on the amount of cash an individual can withdraw from their bank account, and the lack of cash is putting the pressure on students and their families, as their funding options have been significantly reduced.
Sonya Singh, managing director of SIEC, an international education consultancy, said: “Nobody had cash to pay VFS [the visa application service partnered with the UK government], so they had called us up asking if we could arrange for cash to pay on their behalf to VFS to get the visa services.”
— Study International (@Study_INTNL) November 30, 2016
To help with the backlog of payments, VFS has begun to accept bank orders, but even then, banks have been prioritising changing currency over processing bank transfers due to the volume of people needing to change their now-worthless notes.
Singh explained that usually, relatives or family friends living overseas will help pay for a student’s tuition fees upfront, and the student’s family will repay them in cash.
However, with the demonetisation exercise, this method is no longer an option for many students.
But the sector is expected to recover and stabilize in due time – Abhijit Zaveri, managing director of Career Mosaic, said, “Eventually it’s going to be more positive. On the shorter term, it’s going to be a little bit negative.”
Image via Reuters