Cash crunch? Rs 242 crore in new currency seized after demonetisation | Latest News India - Hindustan Times
close_game
close_game

Cash crunch? Rs 242 crore in new currency seized after demonetisation

Hindustan Times | By, New Delhi
Dec 10, 2016 01:14 AM IST

More than 85,000 new Rs 2,000 notes — enough to fill 141 ATMs — have been confiscated over suspicion that they were acquired illegally in connivance with bank officials.

Out of cash. A month after demonetisation this sign continues to greet people across the country at banks as well as ATM kiosks.

A man displays new currency notes in Ahmadabad/(AP File Photo)
A man displays new currency notes in Ahmadabad/(AP File Photo)

Cash is hard to come by. Or is it?

Hindustan Times - your fastest source for breaking news! Read now.

More than 85,000 new Rs 2,000 notes — enough to fill 141 ATMs — have been confiscated over suspicion that they were acquired illegally in connivance with bank officials.

The government’s November 8 decision to scrap Rs 500 and Rs 1,000 banknotes, which accounted for 86% of the currency in circulation, and restrictions on cash withdrawals has led to a cash crunch, forcing people to stand in lines for hours, sometimes even overnight.

But not everyone is struggling.

Facts

Income tax data reveals that nearly Rs 17. 2 crore have been seized in 2000-rupee bills.

Intelligence Bureau alerted home ministry and revenue department that bank officials were colluding with hawala operators to convert old currencies for a commission ranging from 15 % to 30 %.

Countrywide Rs 242 crore in new currency and jewellery worth Rs 15 crore has been seized.

Income tax data reveals that nearly Rs 17. 2 crore have been seized in 2000-rupee bills. The 2000-rupee note was the first to be introduced after the currency cull, followed by a new Rs 500 bill.

Announcing the currency recall, the government allowed a one-time exchange of Rs 4,000 but the swap was discontinued as reports of bank officials colluding with customers to change big amounts trickled in.

Read | Rs 100 crore deposited in 44 ‘fake accounts’ in Axis Bank branch: I-T dept

The first such instance was in Delhi when two people were arrested with Rs 3.5 crore a few days after demonetisation. A probe found out that two Axis Bank officials helped convert Rs 30 crore in new currency.

The Intelligence Bureau alerted home ministry and revenue department that bank officials were colluding with hawala operators to convert old currencies for a commission ranging from 15 % to 30 %.

As many as 138,626 bank branches -- private and public – were and some post offices carried out the exchange. The worry is the rot could be widespread.

People wait for a bank to open to withdraw and deposit their money, after the scrapping of high denomination 500 and 1,000 Indian rupees currency notes, in Ahmedabad. (Reuters Photo)
People wait for a bank to open to withdraw and deposit their money, after the scrapping of high denomination 500 and 1,000 Indian rupees currency notes, in Ahmedabad. (Reuters Photo)

The government has been saying the short-term pain will bring long-term gains by stamping out black money and corruption. But the seizures have raised concerns if the banking system has compromised the effort.

A raid on an Axis Bank branch in Delhi’s Chandni Chowk unearthed 44 fake accounts. Around Rs 100 crore were deposited in these accounts in old notes, officials said on Friday.

In Chennai, Rs 10 crore in 2,000-rupee notes were seized from a businessman. He had 50,000 bills of Rs 2,000 on him against the withdrawal limit of Rs 24,000, or 12 notes of 2,000, per account per week.

Countrywide Rs 242 crore in new currency and jewellery worth Rs 15 crore has been seized. The amount is not abnormally high, as I-T sleuths annually unearth Rs 10,500 crore to Rs 11,000 crore in undisclosed income. But, what it is baffling is the seizure of new notes.

On Friday alone, bundles of Rs 2000 were seized from across the country. Five men were arrested in Mumbai for carrying Rs 72 lakhs in 2,000-rupee notes. In Gujarat’s Surat, Rs 76 lakhs were found in a car.

Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Arvind Kejriwal Arrest Live Updates, Bihar Board 12th Result Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Appu Esthose Suresh was part of Hindustan Times’ nationwide network of correspondents that brings news, analysis and information to its readers. He no longer works with the Hindustan Times.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Wednesday, March 27, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On