NEWS

Why The Scrapped ₹500 And ₹1,000 Notes Are Selling For ₹550 And ₹1,100 In Kolkata

Reversal of fortune.

27/12/2016 10:13 AM IST | Updated 27/12/2016 12:08 PM IST
Amit Dave / Reuters

In the aftermath of demonetisation, there were vendors who were willing to accept the scrapped ₹500 And ₹1,000 notes from their customers, but they would take a cut of ₹100 or ₹200. Old notes could also be sold at a loss of couple of hundred rupees.

In Kolkata, however, old notes are now selling at a premium, The Times of India reported today. Six weeks after the Modi government announced demonetisation, the scrapped ₹500 and ₹1000 notes are selling for ₹550 and ₹1,100 in the bylanes of Burrabazar trading hub.

So what explains the demand for scrapped notes.

The reason, according to the TOI report, is that shell companies need to augment the "cash in hand" on their balance sheets for large paper transactions before the third quarter ends on 31 December.

The scramble to get rid of scrapped notes after Prime Minister Narendra Modi announced demonetisation on 8 November has left the business community with very little "cash in hand" to show. But firms which have projected "cash in hand" for a long period of time will have to show a substantial amount in the old notes to the authorities.

Income tax officials are also finding less "cash in hand" than what is shown in the balance sheets, TOI reported.

The deadline to submit the scrapped ₹500 and ₹1000 notes in banks is 30 December. The Centre is mulling over whether to impose a ₹50,000 fine for possessing the scrapped notes beyond that time.

Also on HuffPost India:

Rare Photos Of Jayalalithaa You May Have Never Seen Before

MORE:News

More On This Topic