Angadia banking system forced to halt in Mumbai as elections begin

The Election Commission of India’s model code of conduct restricts people from travelling with cash over ₹50,000 without valid papers

Mumbai: Once considered the safest and fastest way to facilitate the transfer of cash and other valuables between two parties, the age-old Angadia system has come to a complete standstill as India goes to the polls over the next six weeks. The Election Commission of India’s model code of conduct restricts people from travelling with cash over ₹50,000 without valid papers.

The age-old Angadia system has come to a complete standstill as India goes to the polls over the next six weeks. (PTI)(HT_PRINT)

The Angadia system is a parallel banking system in which a discrete network of highly efficient couriers transport cash, jewellery, diamonds, and other valuable items for a fee. The system, which is based on mutual trust as large sums of money are involved, is prevalent among traders in Mumbai and Gujarat. The service will remain suspended until June 4, when the results of the elections will be announced.

Here’s how the system works: for smaller sums of money, the Angadias hand over the cash to the receiver after getting a telephonic confirmation from the sender. For larger amounts, the sender will give a currency note (for example, ₹10) to the Angadias and provide the unique number of the note to the receiver. The Angadia will hand over the package only after the receiver confirms the note number.

A lot of diamond merchants, jewellers and other traders, especially in Surat and Mumbai, rely on the Angadia system for their dealings and transactions. Sanjay Samani, a leading decorator, said his industry involves a lot of cash transactions because clients insist on giving cash.

During election season, though, they’re forced to halt. “The police, customs officials, election commission officers are all on their toes during this period. So, to avoid hassles of documentation with them for large cash transactions, we stop cash trading in this period,” said Naresh Mehta, a diamond merchant. “Plus, 90% of the people now transact via banks.”

Samani, too, said that a lot of workers in his industry now have their own bank accounts. “So, everything is transferred directly. “The dependence on Angadias has reduced.”

That said, the Angadia system also has a cashless type of transaction, which is only kept in the books along with code names for the two parties. Because there is no physical cash involved, this type of transaction is still active during the elections.

In Mumbai, most Angadia offices were situated at Opera House earlier, but have now shifted to Bandra and Bhuleshwar. The century-old service was considered one of the biggest and most reliable mediums of trading.