Money & Banking

The sweet smell of money, and a booming business around it

LN Revathy NS Vageesh Coimbatore/Mumbai | Updated on January 16, 2018

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With Diwali around the corner, demand for fresh currency notes shoots up

New currency notes are always sought after. After all, who doesn’t like to hold crisp and neat notes? Adding to the joy is the smell of freshly printed notes.

But, in the run-up to Diwali celebrations, there is an added dimension to the already high demand.

The day after Diwali (Lakshmi Puja) is believed by North Indians — particularly Gujarati and Marwari businessmen — as ‘luck money’ day, as it marks the beginning of the New Year. It is a tradition in the community to hand over new currency notes to near and dear ones.

Harish Shah, President of Coimbatore Gujarati Samaj, said: “Symbolically, people tend to welcome the New Year by wearing new clothes, greeting friends and relatives and, of course, performing Lakshmi Puja, to pay respects to the goddess of wealth for the money showered in the just-concluded year while praying for a prosperous year ahead.

“And, as part of this ritual, we also dole out currency notes — even this has to be new — to our children, servants, cooks, drivers and every other person who is closely associated with the family. We believe that this new currency, when kept in the locker, will multiply and make one more prosperous.”

Incidentally, this tradition is not very popular among South Indian businessmen. With them, there is a sentiment against doling out money on a festival day — perhaps seen as turning the goddess of wealth away.

But, as with many other cultural practices, migration and new societal norms have ensured that some practices expand beyond their traditional geographies.

Hence, the practice of seeking fresh notes from banks in now widely prevalent across the country. Bankers, however, observe that the demand is much higher in Gujarat, Maharashtra and other States in the North compared to the South.

Popular denominations

The popular denominations are ₹10, ₹20 and ₹50, and to some extent ₹100. Bundles of such notes attract good premium during these weeks since all businessmen are willing to pay a little extra to get their hands on them.

Note bundles are cornered by brokers and there is often trading in these currency bundles — well outside the banking system — to cater to the high demand for smaller denominations. Bankers admit that they cannot satisfy every customer’s requirement, as supply is constrained, and more so this year. Some bank branches located in Tamil Nadu are facing a hurdle in procuring currency bundles.

A senior officer in Bank of India confirmed that there was some difficulty in the backdrop of a recent train heist near Salem, which has raised concerns on the risk and cost of transporting currency notes. While there is huge demand, the volumes that have been transported so far could not be assessed.

“No chest will have any new note after Diwali. But, at present, all chests are facing a problem getting new notes,” he said.

Published on October 27, 2016

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