Demonetisation: Russia warn India over cash withdrawal limit, threatens retaliatory action

New Delhi: Demonetization is taking a toll on Indian diplomacy, with Russia lodging a strong protest over cash shortage affecting the functioning of its embassy here and threatening retaliatory action.

Pressing the External Affairs Ministry to intervene to get restrictions on cash withdrawals by Russian diplomats lifted, its Ambassador Alexander Kadakin has written to it saying embassy’s normal functioning was getting impacted with the “inadequate” amount limit of Rs 50,000 per week.

State Bank of India has informed the Embassy that the cash withdrawal limit available to the Embassy is now Rs 50,000 per week under the government of India directives with no exceptions unless otherwise advised by the RBI, his letter said. “Such an amount is totally inadequate as regards the embassy’s salary and operational expenditure requirements,” the letter added.

“We are awaiting a reply from the MEA and hope that this is resolved quickly. Otherwise, we will be forced to explore other options which may include raising the issue in Moscow with your Embassy by summoning Indian Minister Counsellor,” a senior Russian embassy official said in New Delhi.

Other retaliatory options may include restriction on the cash withdrawals for Indian diplomats posted in Russia, the official indicated. There are approximately 200 staffers in Russian diplomatic mission in the national capital. There was no immediate reaction from the Indian side on the complaint.
Russia is not the first one to complain about the demonetization-induced restrictions. Earlier, the Dean of Diplomatic Corps had also raised the issue with the External Affairs Ministry. It is also understood that some other countries like Ukraine and Kazakhstan have also raised the issue with the ministry.

After the demonetization last month, MEA had said it has approached Department of Economic Affairs over issues including those related to maintaining sufficient flow of funds to diplomatic missions following demonetization and was awaiting a decision by the finance ministry regarding it.