Three tips on how to stay liquid in India - Is cash still king?

29. November 2017


As a student you usually don’t have a lot of money at your disposal. Nevertheless, in India as a foreign student from Europe, my purchasing power increased noticeably, and I kind of felt blessed by Lakshmi, the Indian goddess of wealth. In this post, I will share some of my lessons learnt during my time in India so far.

Lesson 1: Unlock geo-control on your credit/debit card, and always maintain a cash buffer

About one year ago, India’s Prime Minister Narendra Modi devalued 1000 and 500 rupee bills overnight, in an effort to combat corruption. The media worldwide took up the topic and reported on India going more and more cashless. However, arriving in India without any money in my pocket did was not the wisest idea I’ve ever had. The original plan of taking an Uber to campus and paying it by credit card did not work out due to payment issues. And as I had forgotten to unlock the geo-control function on my debit card, the ATM only provided me with well-mannered apologies. Luckily in the end I accidentally met a fellow exchange student on the airport which was willing to share a cab with me. He paid cash.

Lesson 2: Pay with cards whenever possible, compare ATMs to avoid high withdrawal fees

So, after settling in my comfortable dorm room at Lakeview Hostel at the Indian Institute of Management Calcutta (IIMC) the exchange could start. First, I changed my debit card setting to withdraw some money that would provide me with the necessary liquidity to repay my debts and get the necessities for the upcoming days. The ATMs on campus – as most ATMs in India according to my experience – accept the most common types of debit and credit cards like Maestro, Mastercard or Visa. Nevertheless, they differ in whether the specific bank charges an extra fee for withdrawing money (if approx. 200 rupees / 2,50€) or by which exchange rate applies. Also, for foreign cards, cash withdrawals are limited to 10.000 rupees per transaction, which is about 131€. Pay with cards whenever possible and have an eye on your cash reserves in order to avoid high fees from frequent trips to the ATM.

Lesson 3: Make use of electronic payment solutions, have an Indian friend assist you

India really embraces new, alternative payment systems, and in some way, is even more advanced than Austria. I found that besides the usage of cash, electronic payment systems like Paytm, play an important role. Moreover, people in general tend to have more trust in such forms of payment compared to Austria. These services usually offer their customers a wide variety of discounts, thereby even increasing the convenience of usage. Also, if you ever have to wire rupees to India, use apps like TransferWise to keep the fees low. In contrast to that, the possession of credit cards among the everyday Indian compared to Austria’s Max Mustermann shows a different picture. While in Austria the density of credit cards is quite high, in India only a small percentage of the population uses them. This gap is primarily due to the necessity of earning at least 10.000 rupees per month which equals to a salary of approximately 131€ per month.

For your next trip to India, consider the following tips in order to avoid hassles:

  • Unlock the geo control settings of the credit and debit cards before your trip
  • Try to maintain a cash buffer, preferably in small denominations of 10s and 100s
  • Avoid high withdrawal fees by paying with card whenever possible and by comparing different ATMs
  • Have an eye on the exchange rate and withdraw money when it’s peaking
  • Use online payment systems like Paytm and TransferWise to make use of discounts, ask an Indian friend to assist you


Spicy greetings from India and until next time,


Markus Habernig, Student

The author, Markus Habernig is a Carinthian national and studies at  Università Commerciale Luigi Bocconi in Milan. He is currently spending a semester abroad in India at the Indian Institute of Management Calcutta (IIMC). The images were provided by Markus Habernig.

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