Hoarders ‘cash’ in on demonetisation

Older scrapped currency being surreptitiously pumped into the mainstream in Adilabad

Black money hoarders in Adilabad seem to be posing an additional problem for bankers, that of weeding out the pre-2005 currency notes from the demonetised Rs. 500 and Rs. 1,000. They are trying to take advantage of the current system and slipping the pre-2005 notes, which were banned by the Reserve Bank of India in 2014, aiming to exchange them for legal tender.

The issue has been noticed by bankers here, but nothing much is being done about it as they are under tremendous pressure owing to demonetisation. They are, however, able to weed out such currency thanks to the note counting machines which are programmed to detect the silver thread pieces printed before 2005.

The chief cashier at State Bank of Hyderabad, Adilabad main branch, K. Dharmender, singled out one note when an individual came to him to exchange demonetised notes. “This has ceased to be legal tender since long,” he admonished the person on Saturday.

A few days earlier, the staff at Andhra Bank in the town found an individual trying to deposit a few Rs. 500 notes which were banned by the Reserve Bank of India in 2014. Some of the staff members took strong objection to it .

In another instance which took place four days back, the note counting machine at Indian Bank beeped furiously as it detected pieces of lapsed currency notes in a bundle which was submitted by a seed dealer to be deposited in his account.

The dealer, who swore the money was given to him by farmers, ended up poorer by Rs. 4,500 as the machine refused to accept 7 of the Rs. 500 notes and one of the Rs. 1,000 bill as they belonged to the series which were banned two years back and can now be exchanged only at the RBI.

According to bankers, the number of older banned notes is much smaller where an individual is concerned, but considerably higher when big business houses or industrialists come into play. Though the old money left with hoarders cannot be quantified at this stage, it is being assumed that they were left with huge stockpiles of the silver thread currency having failed to exchange in the earlier instance, they point out.

The cotton market in Adilabad is an ideal place to launder even the older scrapped currency notes as farmers are being paid in Rs. 500 and Rs. 1,000 notes.