Illegal money changers sprang up offering to convert old 500, 1000 rupee notes for smaller denominations
On a day banks reopened and long lines could be seen at all branches across the country, illegal money changers sprang up offering to convert old 500 and 1000 rupee notes for smaller denominations. NDTV spoke to one such operator on condition of anonymity, in Sadar Bazar - Delhi's wholesale market where traditionally high volume trade is done in cash.
"For every 1000 or 500 rupees we charge anything between 25-30 per cent," the operator told NDTV. That means that for each 1000 rupee note given in swap, the operator would keep 300 rupees and give back 700 in smaller denominations.
The rates however fluctuate and we are told that some operators are even charging 35 per cent. However, with higher amounts, the rate is lower.
"For transactions above 1 crore we charge 25 per cent as conversion fees." The logic for this according to the operator is that a bigger transaction is preferable as it reduces their risk since they are dealing with one person instead of many smaller customers. And risk is something the operators should be worried about. This is essentially money laundering as the old currency notes have to be deposited or exchanged at banks.
The operator, while refusing to tell us how much money he had transacted so far, said that both small traders and big ones were approaching him.
On Friday evening, the police and Income Tax authorities launched several raids in Chandni Chowk area in old Delhi targeting money launderers, hawala operators and jewellery shops believed to be converting old currency notes for either smaller denominations or gold.
The Rs 500 and 1000 currency notes were demonitised by Prime Minister Narendra Modi in a surprise announcement on Tuesday as part of the government's efforts to curb black or illegal money.