₹2000 note withdrawal spurs purchase of gold and silver | Latest News India - Hindustan Times

2000 note withdrawal spurs purchase of gold and silver

May 22, 2023 10:58 AM IST

There was a 10% to 20% increase in the sale of jewellery since Saturday, people aware of the matter said.

Lucknow/Patna/Jaipur: The demand for bullion saw a sudden jump on Saturday, which dealers in various parts of the country said was expected to continue till people offloaded a bulk of their 2,000 banknotes for gold and silver, even as a rush to exchange the high-value currency notes is expected at banks from Monday.

A notice at a Hyderabad petrol pump says <span class='webrupee'>₹</span>2,000 notes will be accepted only for transactions above <span class='webrupee'>₹</span>1,000, after the RBI announced withdrawal of the high-value banknote. (PTI)
A notice at a Hyderabad petrol pump says 2,000 notes will be accepted only for transactions above 1,000, after the RBI announced withdrawal of the high-value banknote. (PTI)

The Reserve Bank of India on Friday said it was withdrawing from circulation 2,000 currency notes introduced seven years ago after demonetisation, resulting in a rush to use the banknotes. People scrambled to buy gold and silver in bulk in bullion markets, leading to increase in prices, dealers in several states said.

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Also Read: Why RBI decided to withdraw 2000 notes within 7 years

“The sale of bullion has shot up after the withdrawal of 2,000 currency notes was announced,” said Vinod Maheshwari, a bullion dealer at Lucknow’s Chowk Sarrafa market. Traders were selling gold and silver at 10% higher rates to those paying with 2,000 notes, he said, adding that there was no significant increase in the rates of jewellery.

There was a 10% to 20% increase in the sale of jewellery since Saturday, according to Siddharth Jain of Jambu Jewelers at Chowk Sarrafa. He expected the demand to remain high in the next few months because people would try to offload their 2,000 notes. “People are coming with more 2000 notes and they want to buy gold biscuits and jewellery,” Jain said.

Big jewellers in Kolkata said many people came with 2,000 notes to buy bullion and jewellery on Saturday. “The rush was expected,” said I Chowdhury, owner of a family-run jewellery business. “We have taken down the details of the buyers and, if the government wants, we have to share the information with them.” All licensed jewellery shop owners are accountable under the Prevention of Money Laundering Act, 2002, he added.

“The gold jewellery market has picked up (after the news),” said Kailash Mittal, president of Jaipur’s Sarafa Traders Committee. “The jewellery business has gone up by 20%.”

Also Read: Big deposits of 2,000 notes in Jan Dhan accounts will draw tax scrutiny

Sourabh Jain, owner of a jewellery store in Jaipur, said prices of 24 carat gold have risen from 63,000 per 10 grams to 66,000, which was not good for jewellery sales. “The fluctuating price isn’t good for sale of jewellery as people tend to wait for a stable market,” he said.

There was also an increase in cash transactions using 2,000 notes in several places on Saturday. A railway official and another at local electricity bill collection centre in Kolkata, who declined to be named, said many people had come with the high-value banknotes.

At a Kolkata petrol pump, an employee said that till Sunday afternoon he had got a huge number of 2,000 notes. “I accepted around 20 notes since morning. Petrol pumps should not face any problem immediately because the cash from sales is deposited in banks to prepare drafts for buying the next consignment from oil companies,” said Jatin Haldar, an employee of a Bharat Petroleum outlet.

In Patna, markets and banks are yet to see the rush for getting rid of the 2,000 currency notes, although shops dealing in jewellery and consumer and electronic goods saw a substantial increase in visibility of the pink notes.

Sales with 2,000 notes have increased, according to Anuj Kumar Singh, general manager at Aditya Vision, a popular retail chain of electronic goods and consumer products in Patna. “The increase could be due to the rise in temperatures also, which might have propelled the sale figure of air-conditioners, coolers and refrigerators,” said Singh, adding that sales had gone up by 10% in the past two days.

Meanwhile, banks are preparing to tackle a rush from the coming week.

“The bank will start accepting the currency notes from May 23. Customers can exchange their 2000 banknotes up to 20,000 at all branches without requisition slips or identity proof,” said S Muralidharan, chief general manager at the State Bank of India in Lucknow.

“Special counters have been set up to exchange the notes,” a bank officer at a leading bank in Lucknow said, requesting anonymity.

“Since my branch is located at the business district of Bhawanipore, our manager has asked us to be prepared for rush of customers at the teller counters from Monday onwards,” an employee of a nationalised bank in Kolkata said, declining to be named.

A Bank of Baroda official in Patna said although they do not expect a rush seen during the demonetisation in 2016, preparations have been made to deal with people coming to exchange 2,000 currency notes.

Kolkata Police has stepped up vigil at bullion markets to keep a tab on hawala traders. “We have stepped up vigil on hawala operations as well,” a police officer said on condition of anonymity.

The Tamil Nadu State Transport Corporation at Tirunelveli issued a circular that bus conductors should not accept 2,000 notes from passengers.

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