As high value notes become idle paper, Rs 100 notes being sold at premium & Rs 1,000 notes at discount’
A day after Rs 500 and Rs 1000 denomination notes ceased to be legal tender, shops and other commercial establishments here bid adieu to the high valued currencies amidst speculation that Rs 100 notes were being sold at a premium and Rs 1000 denomination being undervalued.
However, the wholesale vegetable supplier to Chennai and its neighbourhoods, the Koyambedu market, had no apprehensions accepting the said denomination notes amidst a spike in sales of the greens.
Most of the shops — retail, jewellery, supermarkets and petty shops in the city told their customers that they are not accepting Rs 500 and Rs 1000, prompting many to opt for debit and credit card payments.
“We accepted Rs 500 and Rs 1000 till 12 last night yesterday for our transactions but have stopped accepting them today,” a jeweller at the gold hub of T Nagar said on conditions of anonymity, adding, card payment was a preferred mode.
Most of the supermarkets here also declared they were not accepting Rs 500 and Rs 1000 notes, and customers, who did not want to part with their precious Rs 50 and Rs 100 notes, most of them drawn from ATMs after a long wait last night, opted to pay through credit and debit cards.
“I hope things settle as quickly as possible as there are still places like small shops where they don’t accept cards,” M Subha, a homemaker purchasing goods at a supermarket said.
The Koyambedu market vendors are accepting Rs 500 and Rs 1000 notes, an association representative said.
“We don’t have a problem in accepting the notes as most of the traders are Income Tax Assesses and we will just deposit the money in bank,” said VR Sounderrajan, President, Koyambedu Vegetable Wholesale Association.
There were around 350 such traders and “most of them” were I-T assesses and were accepting the currency of said denominations, he said.
Sales of vegetables during the day has also doubled from around Rs 10 crore to Rs 20 crore, he said.
Many of the vendors and traders also acknowledged that they had heard about Rs 100 being sold for a premium or that Rs 1000 was being “undersold” but denied any direct knowledge.
“This could be a rumour or speculation,” Sounderrajan said.
Meanwhile, Milk vendors clarified that they were not accepting Rs 500 and Rs 1000 notes, contrary to public perception.
SA Ponnusamy, Founder and President, Tamil Nadu Milk Agents Welfare Association, asked people to not believe “rumours” that milk vendors were accepting the notes with said denomination. “When the agents already have these notes, paid by milk firms and retail outlets for distribution, it is impossible to further accept notes of this denomination. Therefore we request people not to trade in these currencies,” Ponnusamy said.
Traders and buyers at the busy Chintadiripet fish market also experienced problems in dealing with Rs 500 and Rs 1000 currency notes.
Many flashed the notes to the electronic media, suggesting difficulties in trading in these currencies.
Customers at various hotels found the going tough as many of the eateries refused to accept the high denomination Rs 500 and Rs 1000 notes.
A hotel here displayed a notice stating “Government ordered withdrawal of Rs 500 and Rs 1000 notes”, making it clear it would not accept these from customers.
ATMs to stay shut today; new currency notes from tomorrow
All automated teller machines (ATMs) remained shut on Wednesday and will also stay shut on Thursday as banks replace the now declared invalid Rs 500 and Rs 1,000 notes with new currency papers. On Tuesday, after the Government’s announcement of withdrawal of Rs 500 and Rs 1,000 notes, people rushed to ATMs to withdraw lower denomination valid currency notes. However, banks closed automated teller machine operations past mid-night. Banks are also closed today for cash balancing and stocking up of lower denomination Rs 50 and Rs 100 notes and high security new Rs 500 and Rs 2,000 notes.
Customers can deposit their old Rs 500 and Rs 1,000 notes in their bank accounts tomorrow, and also exchange it with lower denomination or the new security feature Rs 500 and Rs 2,000 notes but with a limit of Rs 20,000 a week.
The new high security feature Rs 500 and Rs 2,000 notes will initially be available at branches from tomorrow and at automated teller machines from November 11.
Since most of the cash deposit machines are inside the branches, people can deposit their old currencies only on Thursday when the branches open.
Meanwhile, the government has cautioned people that since cash deposit in a account above certain limit will be monitored by Financial Intelligence Unit and tax authorities so one should refrain from someone else money.
Besides, depositing money in bank accounts, the Rs 500 and Rs 1,000 notes can also be exchanged with lower denomination currency notes at designated banks and post offices on production of valid government identity cards like PAN, Aadhaar and Election Card from November 10 to November 24 with a daily limit of Rs 4,000. The new hard-to-fake Rs 500 and Rs 2,000 currency notes will be available at bank ATMs when they start operating again from Friday, Finance Secretary Ashok Lavasa said on Wednesday.
“There are going to be some difficulties which they (people) will face but for their convenience, a number of steps have been taken by the government, there are facilities to withdraw money from ATM and exchange currency at banks, withdraw money from accounts,” he said on government withdrawing Rs 500 and Rs 1,000 notes from circulation to crack down on black money and counterfeit currency.
People, he said, do understand the objective behind the move. “And I’m sure they will cooperate in dealing with the difficulties and inconvenience that they might face. And eventually things will settle down.” Lavasa said people need money for transaction so for replacement that currency is being introduced.
“RBI will very strictly monitor it,” he said. “For doing any transaction there are different ways, government’s intention is to move towards cash less transaction.”
The automated teller machines will open day after tomorrow and at many places they will open tomorrow, he said adding new notes will be available at ATMs.
Asked about the slump in stock market indices, he said, the, “The market would have reacted to several other developments. Let’s wait and watch how things pan out.”
“If there is anything required to be done by them I am sure they will take a look and take appropriate decision at the right time,” he said on market regulator Sebi looking into the crash.
Modi ‘magic’ bulldozes Realty stocks by up to 17.5%
Realty stocks ended up to 17.5 per cent lower on Wednesday with DLF, HDIL and Unitech taking a big hit following government’s scrapping high denomination currency notes to clamp down on the black money menace. Shares of DLF crashed 17.47 per cent, HDIL slumped 16.66 per cent and Unitech tanked 8.08 per cent on BSE. The scrip of Sobha fell 4.94 per cent, Godrej Properties - 2.52 per cent and Prestige Estates Projects - 0.79 per cent.
Led by steep losses in these scrips, the BSE realty index dropped 10.23 per cent due to the Government’s major crackdown on black money. Experts say, demonetisation is likely to hit unorganised builders and secondary property market.