Exchanging old currency notes: A 20% cut or a 40% reduction?

The demonetisation led to an expected chaos at petrol pumps, metro stations, toll plazas, as people were wary of accepting notes of these denominations

One’s true character is revealed in the face of adversity, they say, and Indians, as they deal with the shock of the government’s announcement late last evening that Rs 500 and Rs 1,000 currency notes would be demonetised, are showing themselves as ‘resourceful’ people.

While the country is still grappling with this new problem, the really resourceful and imaginative businessmen have already planned their moves. Bankers in the Fort area of Mumbai, India’s financial capital, have confirmed receiving calls for converting old currency with new one in due course, with a nice cut for them thrown in.

In a special address to the nation, Prime Minister Narendra Modi on Tuesday informed the people of India that in its efforts to tackle the scourge of black money, his govt had decided to demonetise Rs 500 and Rs 1,000 currency notes. The notes ceased to be legal tender from midnight. 

This led to expected chaos at petrol pumps, metro stations, toll plazas, as people were wary of accepting notes of these denominations. As reported earlier, farmers were also afraid that they might lose out on sowing time, since their previous payments had been made to them and the new regime might take some time to stabilise.

This, however, did not deter the people who were either out to save their earnings or those out to make a quick buck. In the calls made to the bankers, a flat twenty per cent cut was offered to a banker who did not wish to be named for getting the notes exchanged in due course. 

The modus operandi: The businessman would deposit money with the banker and then take back 80% of the money after some time with the balance 20% remaining with the banker as a facilitation fee.

Though, Rs 1,000 notes have ceased to be legal tender, enterprising businessmen in Mumbai’s Zaveri Bazar and Delhi’s Kucha Mahajani at Chandni Chowk are offering to exchange these notes with Rs  500 to Rs 600 in return. The balance would remain as the cut for these “service providers”.

Most people this writer spoke to were still worrying about getting through the next five days, with low amounts of cash, in denominations other than those of Rs 500 and Rs 1,000 with them. The really tenacious individuals on the other hand are not letting go of this “opportunity”.