Banks recirculate soiled banknotes by spraying perfumes, insecticide
Fuelled by an unprecedented cash crunch after the government spiked high-value currency notes, some banks are receiving soiled, smelly Rs 100 notes for recirculation.black money crackdown Updated: Nov 19, 2016 17:37 IST
Fuelled by an unprecedented cash crunch after the government spiked high-value currency notes, some banks are receiving soiled, smelly Rs 100 notes for recirculation.
Many customers in Delhi complained to IANS that they received mouldy notes, some of which smelt ‘very bad’.
A bank manager, who asked not to be named, told IANS, “The RBI is sending old 100 rupee notes stored for years but not destroyed, These notes smell. We are spraying them with perfumes and insecticides before disbursing them.”
The manager said Rs 100 notes worth millions of rupees have been recirculated to narrow down the huge demand-supply gap in cash after the November 8 demonetisation of 500 and 1,000 rupee notes -- which accounted for 86% of the currency in circulation by value.
Usually, such soiled notes are returned to banks by the customers and they finally end up in RBI offices where they are shredded and ferried to dumping sites.
The finance ministry and the RBI have repeatedly insisted after demonetisation that there is sufficient number of new Rs 2,000 and Rs 500 notes to replace the old notes.
But long queues outside banks and ATMs continued on the 11th day since the government declared that two high-value banknotes would no longer be legal tender.
Some attribute this crunch to logistics - it will take time to get the new notes to bank branches across the country.
Others say it is related to printing capacity - based on capacity of four currency presses in the country the demand-supply mismatch will take anywhere between six and nine months to bridge.