Kozhikode

Demonetisation causes cash famine in Malabar

The Head post office in Kozhikode city put up a notice at the main entrance of the office that says ‘no business’ on Wednesday. Photo: S. Ramesh Kurup

The Head post office in Kozhikode city put up a notice at the main entrance of the office that says ‘no business’ on Wednesday. Photo: S. Ramesh Kurup

Business was in low gear across the north Kerala region on Wednesday as merchants and traders tried to make sense of the demonetisation and shoppers and customers struggled hard to cope with the shortage of legal-tender money with them.

People woke up to the reality that most of the cash they had with them were of no use immediately. Towns and cities in the region soon realised that they were in the grip of a financial famine.

‘Marriage shopping’ hit

Kozhikode, the hub of Malabar’s trade, was under a partial commercial paralysis as the banks were shuttered, ATMs were closed and people had no money to pay for their transactions. S.M. Street in Kozhikode, the largest retail shopping centre in the entire Malabar, reflected the gloom. The area, usually bursting at the seams with shoppers, was not crowded on Wednesday. Businesses reported that sales were down to less than a half as they could not accept Rs.500 and Rs.1,000 notes. There was a heavy decline in the wedding-related purchases which are referred to as ‘marriage shopping.’ As the banks and ATMs were closed, the customers were not able to take out cash to pay for high-volume purchases.

However, larger shops in S.M. Street and the upmarket ones across the city that accept credit and debit cards said there was an increase in business using the cards.

Reports from Kannur, Kasaragod, Vadakara, Kanjangad, Kalpetta and many other towns indicated a marked decline in business. In the eastern upland areas, sale and purchase of agricultural products were heavily hit.

A natural-rubber trader at Thiruvambadi in Kozhikode district said that he had withdrawn Rs.2 lakh, all in 500s, from his bank last evening. But, since the cash was of no use on Wednesday morning, he opted not to open his shop.

Land deals

Land-deal registrations across the region was crippled as the parties could not pay the registration fee and related expenses to the government in cash. For instance, at a sub-registrar office (SRO) in Kozhikode city, none of the nine registrations scheduled did not take place. A document writer told The Hindu that his client had got around Rs.5 lakh ready in 500s and 1,000s on Tuesday itself to be paid as stamp duty and registration fee. However, registration of wills and partition deeds were done as the expenses were small.

Some restaurants in the city had to close in the afternoon as their customers could not pay up in small-denomination notes.

Petrol pumps, which were allowed to accept the demonetised notes, however, supplied fuel for Rs.500 or its multiples.


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Printable version | Aug 20, 2022 8:21:45 am | https://www.thehindu.com/news/cities/kozhikode/Demonetisation-causes-cash-famine-in-Malabar/article16441703.ece