28 February, 2021

Demonetisation Becomes An Opportunity

Minutes after PM Narendra Modi announced demonetisation of high-value currency on November 8, an illicit business in ­converting newly junked 500 and 1000 rupee-notes into gold, ­diamonds, forex and new notes began all over the country. ­Outlook examines the many ingenuous means to launder money.

Demonetisation Becomes An Opportunity
  • Foreign exchange Black money hoarders have converted crores of demonetised notes into forex. Dollars are the most sought after currency. A dollar costs around Rs 120-140 in old demonetised notes. Even some diplomats are involved in this laundering process.
  • Hawala There are reports of people sending their black money abroad through hawala dealers, who are again charging a high premium to park it in foreign currency in Dubai, Singapore and Malaysia.
  • Bullion The easiest way to launder money. Many have heavily invested their dirty money in buying bullion, jewellery and diamonds, which wont attract tax.
  • Real Estate Though there is no investment coming into this sector, some small time developers have doubled up as launderers offering their banking networks and influence to convert black money.
  • Politicos There are many dealers—including small-time politicians —who are changing old notes by charging a huge...
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