Taking advantage of the widespread panic triggered by the government’s decision to scrap Rs.500 and Rs.1,000 denominations, gangs of entry operators have become active, offering exchange of old to newly printed notes at rates ranging from 5 to 40 per cent.
Several operators are directly approaching people queued up at banks to help them exchange as many Rs.500 and Rs.1,000 notes as required by arranging people with valid identification cards. One person is currently allowed to get converted cash of Rs.4,000 per day.
While small-time operators are charging 5 per cent for exchanging notes, the rate goes up to 40 per cent for larger amounts, running into lakhs.
In case of huge cash, the operators have been offering exchange after a period of about three months, the time they would take to push the old notes into the banking system through a large network of entry agents working in different banks in various States. It would also require surreptitious transportation of cash by carriers.
“If our banking operations are foolproof, such modus operandi being employed to somehow convert the unaccounted cash into new currency notes will not succeed. However, if these elements manage to either hoodwink the banking system or connive with insiders, their job gets done. At the branch level, it would be important to ensure that cash handlers verify the original and valid identification documents of depositors and keep a proper record of the same,” said a PSU bank official.
The official said there was also a possibility of the same set of identification documents being used at various banks for the purpose, which should be prevented.
“The very essence of the entire exercise is to exchange only that much cash which gets back into the banking system. Therefore, proper verification of identities of depositors and follow-up action is a must. Bank account holders should deposit large sums of cash directly in their accounts instead of going for exchange of notes,” said the official.
While entry operators are busy making money out of the demonetised currency, a significant amount is also being used to purchase “black” gold and precious gems. In the black market, 10-gram gold is currently worth over Rs.50,000 as against the official value of about Rs.31,000.
