From mangoes to luxury watches, Indians seek to offload Rs 2,000 notes

From mangoes to luxury watches, Indians seek to offload Rs 2,000 notes

MUMBAI/NEW DELHI, May 23 (Reuters) – Indians are stepping up purchases of basic necessities, and even high-end branded goods, using the soon-to-be-withdrawn 2,000 rupee ($24.46) notes , as they aim to avoid the need to exchange them or deposit them in banks.

India’s central bank announced on Friday that the country’s largest denomination will be withdrawn from circulation by the end of September. Although he did not specify the reason for the decision, it comes ahead of national and general elections in the country when, according to analysts, the use of cash generally increases, often in unrecorded transactions.

The currency exchange is expected to be far less disruptive than a 2016 decision to demonetize 86% of the country’s currency in circulation overnight.

Since the weekend, people have flocked to outlets to use the 2,000 rupee note to avoid the hassle of queuing at banks to exchange them or asking the taxman to examine by depositing significant sums.

Indian stores, for their part, eagerly accepted the note, using it as an opportunity to boost sales, several of them said on Tuesday, the first day the exchange was allowed.

“A lot of people have been using 2,000 rupee notes to pay for mangoes since Saturday,” said Mohammad Azhar, 30, a mango vendor near Crawford Market in India’s financial capital Mumbai.

“Daily, I get 8-10 tickets now. I accept it. I have no choice, it’s my business. I will deposit all of a sudden before September 30. There is no fear since the ticket is valid.”

Michael Martis, manager of a Rado store in a mall in central Mumbai, said his store had seen a 60-70% increase in 2,000 rupee notes since the announcement of the withdrawal.

“It increased our watch sales to 3-4 pieces per day from 1-2 before,” Martis said.

Food delivery company Zomato (ZOMT.NS) said on its Twitter account on Monday that 72% of “cash on delivery” orders have been paid for in 2,000 rupee notes since Friday. However, the company’s spokesperson clarified in response to a query asking for details that the tweet was a joke and not factual. The company declined to provide actual numbers.

Not all traders were willing to accept the notes.

“I don’t accept, I won’t accept. I don’t want to bother depositing it with my bank,” said a restaurateur in south Mumbai.

Unlike in 2016, when customers rushed to banks to exchange discarded banknotes, bank branches in Mumbai and New Delhi were mostly quiet with a handful of people queuing.

Maximum crowds were seen at the counters of India’s largest lender, the State Bank of India (SBI.NS), as the bank opted not to ask for any documentation for the exchange up to the allowed maximum of 20,000 rupees at the time.

($1 = 81.7800 Indian rupees)

Written by Swati Bhat; Editing by Muralikumar Anantharaman

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