To curb conversion of black money into white, govt turns to indelible ink marks
The government has asked banks to apply indelible ink marks on people who queuing up to exchanging their demonetized currency notes to curb black money
New Delhi: The government has asked commercial banks to apply an indelible ink mark on the fingers of people coming to exchange their demonetized currency notes, in order to restrict the same set of people queuing up to exchange money multiple times.
Long queues at banks and automated teller machines (ATMs) continued to build up on Tuesday as people lined up to withdraw cash a week after the government announced cancellation of the existing Rs500 and Rs1000 notes as legal tender.
Economic affairs secretary Shaktikanta Das said unscrupulous elements are using some people to turn their black money into white money. “As a result, the currency exchange facility is getting restricted to a few people only while the needy are not able to use it. The indelible marks will be akin to the ink used during elections,” Das said.
They will not be applicable for cash deposits and withdrawals from bank accounts.
It is still not clear whether the indelible ink is aimed at limiting multiple currency exchanges daily or for the entire duration of the demonetization drive till 30 December.
Till the time of going to print, the department of economic affairs, along with the department of financial services, was finalizing the standard operating procedure for implementation of this recommendation. Das said it will be implemented in major cities starting Wednesday.
The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi on Monday night.
West Bengal chief minister Mamata Banerjee flayed the decision to use indelible ink, saying it showed the government “distrusts” the people.
“Desperate attempt to start a ‘black mechanism’ with indelible ink shows this government distrusts the common people,” she said in a tweet.
The Trinamool Congress supremo said that “there are bye-elections on 19 November (in Arunachal Pradesh, Assam, Madhya Pradesh, Puducherry, Tamil Nadu, Tripura and West Bengal). What will the EC (Election Commission) say about this decision to put indelible ink on prospective voters?”
To be sure, the finance ministry plans to apply the ink on the right hand, unlike in an election where the left hand is inked.
Das said it has also been noticed that Jan Dhan accounts are being used to deposit unaccounted money in some places. “We are keeping a close watch on Jan Dhan accounts. I appeal to such account holders not to allow anybody to use their accounts for such transactions,” he added.
A Jan Dhan account cannot have a balance of more than Rs50,000 at any point of time.
To increase the availability of smaller denomination notes, the government has asked religious institutions to deposit the donations received at the nearest bank branch.
To ease the pressure on bank branches and post offices, Das said a task force has been set up to shift old notes so that enough space is available to store new notes. Another task force has been set up to keep a tab on information about fake notes.
On the rumours about a shortage of salt, Das said essential commodities are available in plenty, adding that the cabinet secretary is heading a committee of secretaries to track the supply of such commodities.
Meanwhile, the Supreme Court on Tuesday sought a comprehensive response from the centre on the scrapping of Rs500 and Rs1,000 banknotes.
“We are not involving ourselves on the economic issue but we are concerned with the inconvenience caused to people,” a bench comprising chief justice T.S. Thakur and justice D.Y. Chandrachud said.
The government’s top law officer, attorney general Mukul Rohatgi, undertook to file a report on all the steps being taken to ease the situation by Wednesday.
“Collateral damage is inevitable when such measures are taken,” Rohatgi told the court.
He said the government estimates Rs500 and Rs1,000 notes to add up to around Rs16 trillion, out of which it expects around Rs11-12 trillion to enter banking channels. Until Tuesday, approximately Rs3.25 trillion has been deposited with the banks, the attorney general said.
Senior advocate and Congress leader Kapil Sibal, arguing against the demonetization move, said that the government notification is inadequate and arbitrary. “Under what provision of law can the government cap bank withdrawals?” he asked.
The case will be heard next on 25 November.