India's rupee crackdown sees money-changers ink-marked

An Indian passenger uses a 500 rupee note to purchase rail tickets at Allahabad Railway station in Allahabad on November 9, 2016 Image copyright AFP

India is using indelible ink on fingers to ensure people get only one chance to change their big bank notes.

Prime Minister Narendra Modi scrapped 1,000 (£11.8) and 500 notes in a surprise move last week as part of a tax evasion and corruption crackdown.

People have a limited time to exchange the notes for smaller denominations, but will have their fingers marked.

The government wants to stop holders of "black cash" offloading their old rupee notes in small tranches.

Authorities often use indelible ink to stop people from voting more than once in Indian elections.

People were told they should deposit their high denomination notes in the banks, or could only exchange up to 4,500 rupees, ($65; £52) for smaller notes.

But to clamp down on holders of unlawfully held or untaxed cash, depositors can only make such transactions once and so the banks are using the ink to prevent them from making multiple deposits.

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Supporters say it is a handy way for the Indian government to tackle corruption.

The finance ministry suspects "unscrupulous" people have been trying to get around the crackdown by sending proxies to exchange their banned rupee notes.

Removing the ink

The withdrawal of the big notes is aimed at 'black money' and targets people who have been dodging taxes by holding stockpiles of cash.

While the authorities say people will not be allowed another cash swap, critics are wondering what happens if the ink wears off?

Image copyright AP
Image caption The police helped keep order at this State Bank of India branch in Mumbai

During elections, people have used chemicals to remove the ink from their fingers so that they can vote more than once.

The government's ban on big bank notes first received widespread approval because less than 3% of Indians file tax returns.

But the switch has caused chaos with tens of millions of Indians queuing for hours to exchange and withdraw cash.

The government was ill-prepared for the ban which suddenly put 86% of the country's money supply out of circulation.

Many businesses only accept cash and hundreds of millions of Indians do not have bank accounts and only use cash.

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