Miss Alone
Prime VIP
Demonetisation+ has hit diplomacy — Pakistan High Commission diplomats in New Delhi have refused to take their payable-in-dollar salaries from the Indian bank that holds the salary account, and Islamabad, lodging a strong protest with New Delhi, has threatened that disbursal of salaries of Indian High Commission staff in the Pakistani capital may also get affected.
And all this is happening just before the Heart of Asia conference in Amritsar, which will be attended by Sartaj Aziz+ , foreign affairs adviser to Pakistan Prime Minister Nawaz Sharif.
This is how the diplomatic spat played out over past three days. Diplomats can draw their tax free salaries in dollars. In India, withdrawals by diplomats beyond $5,000 require documentation on purpose of drawal. Under that limit, there's no paperwork.
But demonetisation has, as has been widely noted, led to a sharp spike in demand for dollars, making it a relatively scarce commodity in the financial system. RBL Bank, an Indian private bank that holds the salary account of the Pakistan High Commission staff, has asked diplomats for 'letters of purpose' for withdrawal of any dollar amount.
Pakistani diplomats have expressed great displeasure at this and Islamabad has conveyed to New Delhi that if its staff in India is not allowed to withdraw dollars as they always have, it would consider this a breach of the Vienna Protocol. More, Pakistan may consider retaliatory action against salary disbursal for Indian diplomats in Pakistan. Ministry of external affairs officials said India is in "talks with relevant agencies" to "solve the problem".
ET spoke to key officials in Pakistan High Commission, in RBL Bank and MEA for this report. All concerned spoke off record, citing diplomatic sensitivity.
RBL has told MEA that there's an "acute shortage" of dollars in the market post-demonetisation and that the bank is arranging for dollars with difficulty. RBL is also learnt to have conveyed to all parties that it has the "right to monitor" all account activities.
The bank, ET has learnt, has given the Pakistan High Commission three options. First, submit letters of purpose and withdraw in US dollars; second, withdraw in Indian currency at the exchange rate offered by the bank but in amounts as stipulated by Reserve Bank of India following demonetisation; and third, remit the money to Pakistan.
The Pakistan High Commission has let it be known to Indian authorities that it finds all options unacceptable. It's also been conveyed that Islamabad feels the problem is not short supply of dollars but "targetting Pakistan", and that Indo-Pak tension, not demonetisation is the key factor.
And all this is happening just before the Heart of Asia conference in Amritsar, which will be attended by Sartaj Aziz+ , foreign affairs adviser to Pakistan Prime Minister Nawaz Sharif.
This is how the diplomatic spat played out over past three days. Diplomats can draw their tax free salaries in dollars. In India, withdrawals by diplomats beyond $5,000 require documentation on purpose of drawal. Under that limit, there's no paperwork.
But demonetisation has, as has been widely noted, led to a sharp spike in demand for dollars, making it a relatively scarce commodity in the financial system. RBL Bank, an Indian private bank that holds the salary account of the Pakistan High Commission staff, has asked diplomats for 'letters of purpose' for withdrawal of any dollar amount.
Pakistani diplomats have expressed great displeasure at this and Islamabad has conveyed to New Delhi that if its staff in India is not allowed to withdraw dollars as they always have, it would consider this a breach of the Vienna Protocol. More, Pakistan may consider retaliatory action against salary disbursal for Indian diplomats in Pakistan. Ministry of external affairs officials said India is in "talks with relevant agencies" to "solve the problem".
ET spoke to key officials in Pakistan High Commission, in RBL Bank and MEA for this report. All concerned spoke off record, citing diplomatic sensitivity.
RBL has told MEA that there's an "acute shortage" of dollars in the market post-demonetisation and that the bank is arranging for dollars with difficulty. RBL is also learnt to have conveyed to all parties that it has the "right to monitor" all account activities.
The bank, ET has learnt, has given the Pakistan High Commission three options. First, submit letters of purpose and withdraw in US dollars; second, withdraw in Indian currency at the exchange rate offered by the bank but in amounts as stipulated by Reserve Bank of India following demonetisation; and third, remit the money to Pakistan.
The Pakistan High Commission has let it be known to Indian authorities that it finds all options unacceptable. It's also been conveyed that Islamabad feels the problem is not short supply of dollars but "targetting Pakistan", and that Indo-Pak tension, not demonetisation is the key factor.
