Currency

Touts make a fast buck off citizens out to deposit ₹2K currency notes at RBI | Mumbai news


MUMBAI Serpentine queues, separate for men and women, outside the Reserve Bank of India (RBI), in Fort, have been a common sight from the time the regulatory body announced the withdrawal of 2000 notes in May 2023. Citizens spend long hours waiting their turn to deposit the defunct currency. Not surprisingly, a desperation for speedy deposits has birthed an opportunity for middlemen to embark on a lucrative business.

People queue up at the RBI offices to swap 2,000 notes on Tuesday. (Bhushan Koyande/HT Photo)

They discreetly scan for opportunities amidst the chaos of the exchanges to spot those unwilling to endure the long queues. One such middleman approached this reporter, offering to expedite the exchange process for a commission, promising instant cash sans any identification. “Ma’am it will take at least three hours for you to exchange the bills if you choose to stand in the line. I can get that done for you in a jiffy for a 10% cut. You will have the cash instantly,” he said.

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And he had competition. A second one emerged to propose a combo-deal if one could amass more customers. Regardless of the special offer, the 10% cut of the amount exchanged is the established rate.

On May 19, 2023, RBI announced the withdrawal of 2,000 notes from circulation, with a deadline of September 30. It was subsequently extended by a week to October 7. Those who failed to meet the final deadline could thereafter exchange the banknotes – within a limit of 20,000 at a time — at RBI’s 19 issue offices (where currencies are exchanged) located across the country.

There has been a rush at the offices across the country that persists even six months after the last deadline. People come to exchange the notes that they had salted away in emergency purses.

Fortunately, the waiting area outside RBI’s Mumbai office is lush and canopied, where authorities have created seating arrangements for visitors. However, this has not encouraged Mumbaikars to wait their turn patiently (it takes an average of two hours to make an exchange on working days) thereby offering a lucrative opportunity to middlemen ever ready for a hustle.

Modus operandi

Only a handful in the crowd outside RBI are citizens seeking genuine exchanges. A majority of them are proxies enlisted by middlemen.

The exchange officially commences at 10:30am and concludes at 3:30pm, but people start queueing up as early as 7am – most early spots taken up by the middlemen or their proxies.

This is how they operate – they recruit low-income individuals with valid IDs and PAN cards to stand in the queues. Their picks are mostly daily wage earners, homemakers and students seeking extra income. Each is given up to five notes for exchange, in keeping with the 20,000 limit per person. Once exchanged for valid currency, the money flows back to the middlemen, who then distribute a share to their proxies. The prospective customer remains unruffled – a 10% loss is made worthwhile with instant cash exchange. The cycle repeats throughout the day and ends until RBI shuts down collection for the day.

This dubious system however affects those who choose to walk the straight and narrow. This reporter witnessed one such individual in a heated confrontation with a middleman who was attempting to persuade her to opt for the easy route. “Stop bothering me. I have taken a day off just for this,” she told an eager agent. The woman had recently found a stash of notes in her dead husband’s locker which she wished to deposit in her daughter’s bank account.

Another person was taken aback by the thick queue, so long after the deadline was past, outside RBI. He thought he would get done in an hour. “RBI should reconsider restarting the facility at all commercial banks,” he suggested.

RBI makes an effort to weed out miscreants by allowing only those with valid 2000 notes to queue up. They cannot debar those with valid IDs. Hence their efforts are insufficient; and with no final deadline to make the exchanges, middlemen continue their exploitative ventures for easy profits.

HT attempted to elicit a response from the RBI on the prevailing issue through an email sent on March 5, but no response was received from the central body till the time of going to press.

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