Dealers of soiled currency notes grounded by demonetization

Dealers of soiled currency notes grounded by demonetization

SRINAGAR: After the fresh directive that collecting demonetized currency notes may attract punitive action from the authorities, the business of exchanging soiled notes is already counting its last breaths. For sustenance, the street vendors pursuing the business for decades have raised commission on the face value on the plea that their dealers have begun charging more money for the exchanges.
The vendors say that the demonetization of Rs 500 and Rs 1000 currency notes has clogged their entire business setup. Muhammad Shafi, vendor of soiled notes who has been into the business for five decades said the demonetization has directly hit his trade. Waiting for customers near famed Budshah tomb at Maharajgunj in old Srinagar, once a business hub, he said that their unregulated trade has been surviving on 10 to 20 percent cut on face value of the currency notes. He said the cut has been raised by the dealers who eventually exchange the notes with banks.
He added a lot of worn-out notes of one thousand and five hundred denomination have got stuck with vendors with no way to exchange them in a limited time.
Shafi has been lucky as he has exchanged his entire stock of soiled notes except Rs 8000 worth of demonetized notes. “Many vendors have more notes in stock. The dealers are reluctant to take these notes as they find it difficult to dispose off the banned stuff,” he said.
He informed that most of the soiled notes land in Delhi and Kolkata for exchange. “Significant number of notes is also repaired and circulated back into the markets,” he said adding the residual notes are deposited with the RBI that destroys them and reprints new notes.
Another vendor Abdul Hamid said that the financial exigency has hot their trade like never before.
“Worn out high denomination notes would add significantly to our earnings, and given that they are being replaced, we are bound to deal with exchange of lower denomination notes,” he said. “This means less business,” he said.
He said that post demonetization, some people approached them with burnt Rs 2000 notes but they declined to exchange. “
Interestingly, Hamid is receptive to old Rs 1000 currency notes that the Morarji Desai led Janta Party government demonetized in 1978. He is ready to pay Rs 1800 to Rs 2000 for these notes because he gets even a higher from the people who collect old currency notes.

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