The demonetisation of Rs. 1,000 and Rs. 500 notes announced by the Centre on November 8 has left a tell-tale impact on the gold monetisation schemes (GMS) across the district.
The demonetisation has paralysed the flourishing gold-loan business of pawn brokers completely, apart from forcing customers to stay away from banks following the weekly ceiling of Rs. 24,000 on cash withdrawals.
“The number of customers and general public approaching banks seeking loans for gold has fallen drastically owing to demonetisation, N.G. Prabhudev, manager, Lead Bank of Mandya (Vijaya Bank), told The Hindu here on Friday.
The Kallahalli branch of Canara Bank, off the Bengaluru-Mysuru highway here, used to issue gold-loans to at least four people everyday. Nevertheless, only four have availed the facility since the announcement of ban on the circulation of two high-value notes, a senior officer at the bank said.
Across Mandya
According to officials at various major nationalised banks, the situation is not different at banks or branches at other places in all seven taluks.
The district has 284 branches of 28 nationalised and private banks. On an average, the branches used to lend money to at least 2,200 persons everyday under the gold monetisation schemes (GMS).
However, the number of beneficiaries under the GMS is less than 900 since the announcement of the demonetisation move.
Weekly restrictions
The cash withdrawal limit per person a week has been fixed at Rs. 24,000.
The gold loan amount will be transferred to the individual’s bank account. Customers with savings bank (SB) accounts can withdraw Rs. 24,000 a week, while those who have current accounts (CA) are eligible to withdraw Rs. 50,000 a week.
The response to GMS has significantly come down because of the restrictions on cash withdrawal, Mr. Prabhudev said.
Pawn brokers
Meanwhile, the business of pawn-brokers has come to a halt ever since the demonetisation, said sources from the Pawn Brokers Association.
The district has over 700 pawn brokers and all of them have stopped lending gold-loans because of the non-availability of valid currency, Heeralal, a pawnbroker, said.
