Currency Exchange: From Mangoes To Luxury Watches, People Look To Offload Rs 2,000 BankNotes
People have thronged outlets to spend using the 2000-rupee note to avoid the hassle of queuing up at banks to exchange them or invite scrutiny from the tax department by depositing large sums
After the withdrawal of Rs 2,000 currency notes by the Reserve Bank of India (RBI), many Indians are stepping up purchases of daily essentials, and even premium branded goods, using the Rs 2,000 notes as they aim to sidestep the need to exchange or deposit them at banks, reported by Bloomberg.
According to the report, while it did not specify the reason for the move, it comes ahead of state and general elections in the country when, analysts said, cash usage typically spikes, often in unaccounted deals.
The RBI on Friday announced the country's largest denomination note will be withdrawn from circulation by the end of September. The currency exchange is expected to be far less disruptive than a 2016 move to demonetise 86 per cent of the country's currency in circulation overnight.
Since the weekend, people have thronged outlets to spend using the 2000-rupee note to avoid the hassle of queuing up at banks to exchange them or invite scrutiny from the tax department by depositing large sums.
Indian shops, for their part, eagerly accepted the note, using it as an opportunity to increase sales, several of them said on Tuesday, the first day the exchange was allowed.
"A lot of people are using 2,000-rupee notes to pay for mangoes since Saturday," said Mohammad Azhar, 30, a mango seller near the Crawford Market area in India's financial capital of Mumbai. "On a daily basis, I get 8-10 notes now. I accept it. I have no option, it's my business. I will deposit everything at once before Sept. 30. There is no fear since the note is valid."
As reported by Bloomberg, Michael Martis, store manager at a Rado store in a mall in central Mumbai, said his store had seen a 60-70 per cent increase in 2000-rupee notes since the withdrawal was announced. "That has increased our watch sales to 3-4 pieces per day from 1-2 previously," said Martis.
Food delivery firm Zomato said on its Twitter account on Monday that 72 per cent of the "cash on delivery" orders were paid in 2,000-rupee notes since Friday. However, the company spokesperson clarified in response to a query seeking details that the tweet was in made jest and was not factual. The company refused to provide actual numbers.
Not all shop-owners were keen to accept the notes. "I don't accept; I won't accept. I don't want to get into the trouble of depositing it with my bank," said a restaurant owner in South Mumbai. Unlike in 2016, when customers rushed to banks to exchange the scrapped currency notes, bank branches in Mumbai and New Delhi were mostly quiet with a handful of people standing in queues.
On Friday, the RBI announced the withdrawal of Rs 2,000 currency notes from circulation and said existing notes in circulation can either be deposited in bank accounts or exchanged by September 30. However, the banknotes will continue to be legal tender.
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