NEW DELHI

‘Business has been down for the third day in a row’

Inconvenienced:Sanjiv Mehra, president of the Khan Market Traders’ Association, said business was just picking up on the brink of the wedding season when the announcement was made.Photo: Shiv Kumar Pushpakar

Inconvenienced:Sanjiv Mehra, president of the Khan Market Traders’ Association, said business was just picking up on the brink of the wedding season when the announcement was made.Photo: Shiv Kumar Pushpakar  

In the winter of 1978, a teenaged Sanjiv Mehra anxiously stood in a small queue outside the local bank. He had been entrusted with a very important task — exchanging a handful of Rs.10,000 notes, which had been denounced as legal tender by the Morarji Desai-led Janata Dal government.

Back then, currency notes of Rs.10,000, Rs.5,000 and Rs.1,000 had been demonetised.

Amounting to no less than a small fortune, so much so that the money he sought to exchange must have constituted a significant chunk of the working capital of his family business operating out of Khan Market, the high value of the currency demonetised then also meant that it was in limited flow, Mr. Mehra recalled.

“At that time, the notes that were discontinued were of such large denominations, especially the Rs.10,000 ones, that they were not much in circulation. I remember that all we had to exchange were a couple of Rs.10,000 currency notes. Those of smaller denominations were easily and conveniently available at bank branches,” said Mr. Mehra, who is 60-year-old now and the president of the Khan Market Traders’ Association.

“There were a limited number of people, mostly businessmen who were used to daily cash transactions, who had that kind of money in 1978. But now, Rs. 500 and Rs. 1,000 notes form the chunk of all cash business. This is the reason behind the long queues outside banks today, which are no place for someone who is 60 and has leg problems like me,” he added.

Lack of liquidity

Cash business, which he complained was almost non-existent at markets in the Capital since Prime Minister Narendra Modi’s announcement about the demonetisation of Rs. 500 and Rs. 1,000 notes, had gone on in 1978 despite a limited banking network and the absence of ATM machines and e-commerce.

Lack of liquidity in the market due to the non-availability of smaller denominations since the November 8 announcement, he rued, had driven business down just when it had begun to pick up on the brink of the wedding season after a two-month lull.

Added burden

While traders were confronting operational and maintenance costs with negligible business, the added burden on e-commerce, he claimed, was wearing down bank servers and adding to inconvenience on both sides of the counter.

“Business continues to be down for the third day in a row. Even debit card transactions are failing because of the huge load on bank servers. On an average, we have to swipe cards three times for one transaction,” said Mr. Mehra.

“Lack of change and liquidity either keeps shoppers away or ensures that they shop less than they what they had intended to as online transaction and electricity charges still exist. Things were certainly not this complicated after the 1978 demonetisation,” he added.

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