When the notes didn’t gain any currency

From chaos at wholesale markets to a day of losses for small-time businesses and street vendors, cash transactions across Bengaluru were a cause of anxiety for those who had too many demonetised notes and also for those with too few notes of other denominations

November 10, 2016 07:31 am | Updated December 02, 2016 02:37 pm IST - Bengaluru:

Chaos ruled wholesale markets in the city — from Yeshwantpur to old pete and vegetable markets — on Wednesday after demonetisation of Rs. 500, Rs. 1,000 notes. Shopping areas such as Commercial Street and Russell Market were deserted. In many markets, street hawkers and eatery owners looked tired of answering the question: “Do you have change for Rs. 500?”

Though traders in old pete and Yeshwantpur APMC yard were wary of accepting Rs. 500 and Rs. 1,000 notes, they eventually accepted the demonetised currency notes so as to not to lose business. “If we refuse to accept these notes, we will have to shut down markets for many days. We will have to exchange these notes in banks from Thursday,” said Ravi Kumar, an onion merchant at the Yeshwantpur market. A merchant in Chickpet said they were accepting demonetised currency notes to prevent loss of business.

Restaurants also saw poor business and some eatery owners turned away people who came with Rs. 500 notes.

However, merchants and traders are stuck with these currency notes as farmers, suppliers and even transporters are refusing to accept payments in them. “We estimate it will take a month for the business to stabilise. None of us has money to pay farmers. Moreover, we are in a sector where all payments are made in cash. The limit of Rs. 20,000 a week limit is laughable,” said Ramesh Chandra Lahoti, president of Bangalore Foodgrains Merchants Association.

worst hit

For the roadside vendors, even a one day’s loss of sales could mean going to sleep on an empty stomach. Kamalamma (65), who sits outside Bangalore Fort, was almost in tears as she looked at her wilted greens. “I have not made even one sale the whole day,” she said. She has no family of her own and doesn’t have a bank account.

Those selling non-essential items such as knick-knacks and combs were the worst hit, with people unwilling to shell out change for such items. “No one has change to buy my wigs; they have been made with hair from Tirupati,” said Vasantha, who sells wigs near the fort.


Fewer transactions

Gold sales lost their shine on Wednesday with many jewellery stores seeing a drop in customers. The confusion over cash transactions, coupled with a slight rise in the gold price, meant empty showrooms. At one such jewellery store in the central business district, the staff said they had made less than half their usual sales. “There have been dismal sales from morning; it has been less than 10 per cent of the usual sales, all through RTGS and card,” said Manakchand Badera, owner, Panchkesari Badera Jewellers, Jayanagar.


Many traffic offenders let off

Even traffic policemen were not spared of the effect of the ban on Rs. 500 and Rs. 1,000 notes. It was a lucky day for some traffic offenders as policemen had to let them off just because they did not have the change. “If they give us Rs. 500 for a fine of Rs. 100, where do we get the change from? So, we have just been letting off people,” said a helplessl traffic policeman. Those who were handed over notes of Rs. 1,000 or Rs. 500 were seen scrutinising them carefully.


BTC to take a call on races today

Bangalore Turf Club (BTC) will take a call on Thursday on whether or not to hold races this weekend. A committee will meet on Thursday to take stock of the situation in the light of demonetisation of high-value currency notes. “Our races are scheduled for Friday and Saturday. The cities that had races scheduled for Wednesday cancelled them,” said a senior BTC member. Most of the transactions at BTC are done in cash only.


Card clubs shift to keeping accounts

Clubs hosting card games such as rummy had to adapt to demonetisation of high-value currency notes that usually made most of the cash on the table. Clubs resorted to keeping accounts of the dues by members buying the chips for the game, abjuring all cash transactions.


Chaos at tourism destinations

Ticket counters at tourism spots in the city such as Lalbagh, Tipu Sultan Palace and Bannerghatta National Park, were also affected as authorities could not provide change to many tourists tendering Rs. 500 and Rs. 1,000 notes.


Bus conductors accept notes, run out of change

On a day when most government offices were not accepting Rs. 500 and Rs. 1,000 notes, conductors of BMTC and KSRTC buses accepted the notes and issued tickets. However, with several passengers opting to buy daily pass and paying with Rs. 500 notes, conductors ran out of change and had to start refusing tickets in several routes.

Namma Metro users who tendered Rs. 500 and Rs. 1,000 notes to recharge their smart cards for higher amounts were turned away.

Cab aggregators such as Uber and Ola sent out alerts to users that they would not be accepting Rs. 500 and Rs 1,000 notes. Online payments were encouraged. For autorickshaw users, it was a tough day as drivers, tired of handing out change, took to asking customers to board only if they could pay exact change.


Hawala operators were in high demand

Hawala operators, many of whom operate from the congested pete areas of the city, have allegedly collected large sums of money since Tuesday night from those hoarding black money.

They were in high demand on Tuesday night after the Prime Minister’s announcement on demonetising Rs. 500 and Rs. 1,000 notes, and operated till past midnight, sources in the police said, and added that such people shut their operations by Wednesday morning after panicking. Most of those who went to these operators were traders with unaccounted for cash, sources said.

The going rate was a commission of 30 per cent for conversion — that is, the seller got Rs. 350 for every Rs. 500 note and Rs. 700 for every Rs. 1,000 note. In some cases, hawala operators started charging even 40 per cent cuts and promised to pay in new currency only after two months. However, sources said the operators decided that it was too risky and decided to wait and watch.

A senior official in the Economic Offences Wing of the State police said they were closely watching all transactions for any criminal offences during this period. Bengaluru city police and tax agencies are working in tandem to track down on high-value currency transportation across the State too.

Police officials said the move to demonetise high-value currency had hit hard those indulging in gambling, and many operators had closed shop for now. “All gambling is in black money and they need time to build up black cash reserves in new currency to float again. These operators are likely to be down for at least three months,” an official said.

Overnight, currency exchange turns into booming business

By Wednesday morning, the currency exchange bazaar had turned unorganised, and even street vendors had turned into currency exchange dealers across the city. Several such “agents” were trading in Rs. 500 and Rs. 1,000 notes by roadsides and shops. For instance, a tender coconut vendor offered to accept a Rs. 500 note for a cut of Rs. 200 in east Bengaluru. However, he refused to say where he would exchange the demonetised notes later. In Chickpet, one of the oldest markets of the city, shopkeepers were seen openly trading in currency notes, with even competitive cuts. However, these were restricted to small sums of money and they made spot payments, unlike hawala operators.


Generous’ gifts at weddings

Guests at weddings in Hassan in Karnataka saw it as an opportunity to clear the Rs. 500 and Rs. 1,000 notes. They “generously” gave away these notes as gifts! This was what The Hindu saw on visiting a couple of marriage halls in Hassan on Wednesday. “Whatever I have collected so far are only Rs. 500 and Rs. 1,000 notes. Most people do not want to part with the few Rs. 100 notes they have,” said a woman who was collecting gifts on behalf of the bride at Seetha Ramanjaneya Choultry in the town. Anushree and Raghavendra, from villages near Dudda, got married here. Similar scenes were witnessed at other halls too.

Meanwhile, the parents of the bride and the groom were a harried lot. They had taken out cash to handle the last-minute expenses on the wedding day and were left with only Rs. 500 and Rs. 1,000 notes. “I have to postpone all payments for the day,” said Manjunath, whose sister got married in Sakleshpur on Wednesday.


Drop in transactions at govt. offices

Many residents of Bengaluru had a tough time on Wednesday with several government offices stopping accepting Rs. 500 and Rs. 1,000 notes, leading to a drastic drop in transactions, and hassles for all.

BangaloreOne centres across the city were accepting payments only by card, cheque or demand drafts. Cash payments by notes of any denomination were stopped. At offices of Bangalore Water Supply and Sewerage Board, all transactions were halted for Wednesday.

Electricity bill payments were also being accepted in Rs. 100 notes or other instruments only. Property transactions dropped to less than one thirds across the State on Wednesday, with over half the sub-registrar’s offices registering no property transaction at all. RTO offices also registered a drop in transactions because they were not accepting the Rs. 500 and Rs. 1,000 notes.


Arguments at toll booths

Toll roads across the city witnessed heavy rush as travellers tried to use their Rs. 500 notes at the booths, leading to arguments with the staff manning the booths. While these notes were not accepted earlier, a statement from the National Highways Authority of India (NHAI) eventually led to toll booth operators accepting the demonetised currency.

However, a lack of enough smaller denomination notes led to toll booth officials refusing larger denomination notes as they could not return exact change. The issue was mitigated only after an announcement by Union Transport Minister Nitin Gadkari that toll collection had been waived at NHAI toll booths across the country till midnight of November 11.

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