Opposition Attacks PM Narendra Modi On Notes Ban. Nitish Kumar Disagrees. Strongly

Patna: On a day when the opposition launched an offensive against the government over the abrupt withdrawal of Rs 500 and Rs 1,000 notes, there was a rare exception. Nitish Kumar, Chief Minister of Bihar, expressed his "total support" for the ban, introduced last week by Prime Minister Narendra Modi.

In parliament, which began its winter session on Wednesday, a cohort of other leaders he frequently leans on - including Mamata Banerjee - decried the ban on notes as a move that is punishing the poorest and weakest, who suddenly find themselves cashless.

"Fake notes will disappear," said Mr Kumar in his home state yesterday, sharing rare agreement with PM Modi, who has said the reform will attack the roots of black or untaxed money, counterfeited currency and corruption. At a public meeting in Madhubani, the Chief Minister said that like other opposition parties, he is concerned by the plight of millions of people left without any cash, but believes the PM's reform will be effective and that Mr Modi must next tackle benami or proxy-owned property, used often to park black cash.

But eight days after the old notes were cancelled, with just a few hours' notice, banks are swarming with huge crowds desperate to get to the counter or an ATM to collect some new currency. A new version of the Rs 500 note is still a rarity; the 2,000 rupee note is being rejected by many vendors who say they cannot provide change for the high-denomination bill.

Nearly 48 billion dollars have been deposited in banks so far, as people turn in the old notes. And though the lines at banks in cities are long, it is in villages that a crisis is threatened with lakhs who are excluded from the banking system.

The government has repeatedly said it is working night and day to reconfigure ATM machines, which need bigger trays to stock the new currency. The Reserve Bank of India has also confirmed that it has made special arrangements to help villages by dispatching micro-ATMs, which are like the machines used in shops to swipe credit cards and are carried to remote areas to dispense cash.

For now, people can exchange Rs 4,500 of old notes for new ones - after this swap, indelible ink is used on the customer to ensure it remains a one-time exchange; upto Rs 24,000 can be withdrawn per week from a bank account; Rs 4,500 can be withdrawn from an ATM per card per day.

In parliament, opposition leaders like Anand Sharma of the Congress have said they are not opposed to the reform, but to what they described as the lack of preparation to manage the cash crunch. The government has emphasised that if the notice for the initiative had been longer, the move would not have been effective.