Despite monetisation, hoarders find ways to ‘invest’ black money

Though the government is claiming to muddle all routes to convert black money into white through the demonetisation scheme but there are scores of ways through which people have already been converting the old currency in and around the Capital. Despite the ban on higher denominations, reports of using several ways have been pouring in from many localities. From purchase and sales of gold to donations, people have reportedly been taking advantage of loopholes in the system. There is news coming in from across the region highlighting irregularities at massive levels as people are now trying every means to make their banned currency valid. 

With the announcement of the note ban, gold markets across Delhi-NCR have reported a surge in sales and purchases. From last Tuesday evening, jewellery shops were seen flooded with buyers, mostly making purchases through cash. The sudden demand has pushed value of bullion up to Rs 55,000/10gm in the black market while Rs 34,000/10gm in the commodity market. On the other hand, jewellers were reported to buy gold up to Rs 60,000/10gm through old currencies from individuals so that they could minimise their unaccounted money.

There are reports that those who have black money have been using poor people, especially their staff and other acquaintances. They have been finding people for consideration to deposit Rs 2.5 lakh in cash since the government has said deposits up to that amount won’t be questioned. After getting the amount deposited, they are being been asked to withdraw and to return. With this, the defaulter is not converting black into white but their staff is also getting its share in the form of consideration.

Jan Dhan accounts have shown a steep rise in cash deposits as with the banking system now overloaded, opening new accounts are taking a few days. The government keeps boasting about having opened crores of Jan Dhan accounts but most have seen barely any transactions. Jan Dhan accounts can have deposits up to Rs 1 lakh a year but there are also Jan Dhan accounts which have a lower limit of Rs 50,000.

To manage unaccounted money, management of various companies has reportedly used old notes of Rs 500 and Rs 1,000 to pay advance salaries from anywhere between the next three and eight months. The employees are being asked to deposit the amount and withdraw in future. This way the companies will be able to deposit old currency without attracting the attention of the income tax department.

Hours after the announcement of the ban, booking and cancellation of higher class tickets on long routes have been reported. Since old notes are being accepted to book train tickets, the practice has become common these days. Smelling foul play, the railways have said refunds will not be in cash. But since these bookings are being made through travel agents, even refunds through electronic transfers mean the travel agent will be able to return large sums in new currency notes. 

Besides this, temple donations, back-dated FDs in co-operative banks and credit societies, giving loans to poor people, approaching the banknote mafia using professional money laundering firms, using farmers, using political parties, brazenly putting it in the bank, etc are common practices these days.