Traders wary of accepting Rs 2,000 notes, seek clarity

Traders are wary of accepting ₹2,000 notes, citing a lack of clarity about deposit and exchange facilities at banks as they see a rise in customers wanting to pay for goods with the highest-denomination currency, which is being withdrawn.

Gold jewellers are insisting that customers buying jewellery for more that ₹50,000 furnish know-your-customer (KYC) documentation, as they don't want to invite the kind of income tax scrutiny that happened after the 2016 demonetisation.

In Kolkata, many shopkeepers are refusing to accept ₹2,000 notes from consumers for fear that they will get stuck with the money. Many traders from Bihar and Odisha are also not keen to accept the note.


"As of now, we are a bit cautious about accepting ₹2,000 notes. We are waiting for detailed guidelines from the banks on how ₹ banknotes can be exchanged or deposited," said Vijay Kumar Bhuta, president of the Dry Fruit Traders Association, Mumbai. "We do not want to fall in any trouble."

Champalal Bothra, general secretary of the Federation of Surat Textile Traders Association, said they are encouraging online payment until there is clarity on the ₹2,000 note. "However, we are not completely ignoring the acceptance of the ₹2,000 note," he said. "We are taking cautious steps."

The different exchange or deposit policies adopted by the banks has also led to confusion. Some banks are asking for identification while others aren't insisting on this.

Gold Trade Cautious

In the 2016 demonetisation, people rushed to buy gold to make use of the withdrawn ₹500 and ₹1,000 notes. Jewellers, who had downed shutters on the evening of November 8, 2016, asked employees to come back and join work as they received frantic calls from their customers after demonetisation was announced in an 8 pm TV address. Many of them faced income tax action later.

Saiyam Mehra, chairman of the All India Gem & Jewellery Domestic Council, said that the jewellers witnessed robust footfall last Saturday and Sunday after the RBI's announcement on Friday.

"We have told our members to collect KYC from the customers. We are also expecting good sales next Saturday and Sunday as the wedding season is underway," Mehra said.

Suvankar Sen, managing director of Senco Gold & Diamonds, said, "Whoever comes to us with ₹2,000 banknote to buy jewellery, we are asking them to submit KYC if the gold jewellery purchase is ₹50,000 or above."