Traders, money lenders laundered crores of rupees post-demonetisation
While the common people continue to return morose from ATMs, those associated with Adilabad’s huge cotton trade are laughing all the way to the banks, having ‘successfully’ laundered hundreds of crores of rupees in black money due to demonetisation.
The timing of the ban on ₹ 500 and ₹ 1,000 currency notes turned out to be conducive for the latter which is becoming evident now when the government is busy collecting taxes on suspect transactions which took place during the period of demonetisation.
It is a well-known fact that money lenders, usually cotton commission agents, disburse large sums of money to cotton farmers during kharif season charging an interest rate of as high as 25 per cent for a six to seven-month period.
This ‘advance’ payment is recovered when the farmers sell their produce to traders with the commission agents acting as middlemen.
There are about 200 licensed and unlicensed cotton commission agents and cotton purchasers operating in Adilabad market alone. Cumulatively, they disburse an estimated ₹ 200 crore by way of advance payment to the farmers to purchase seed, chemicals and make payments to labourers, all until September.
“By the time demonetisation was announced on November 8 last year, the disbursal of money had been complete and it was only recovery time. An estimated ₹ 100 crore by way of the remaining black money with the money lenders was laundered through benami as well as valid bank accounts of farmers by way of payments made to them,” revealed a source in the marketing department.
In addition to the existing bank accounts of farmers, over 3,000 more zero-balance accounts were opened during the period in the names of labourers working with individual traders. One trader opened as many as 300 bank such accounts in a single bank on a single day, all in the name of labourers employed by him.
As the government decided to overlook all banned currency bank deposits under ₹ 2.5 lakh, it helped the hoarders to convert at least ₹₹ 60 crore of the leftover black money into white through newly opened accounts. More black money was laundered by way of actual payments made to farmers in banned currency notes.
“All that the government needs to do is to investigate the accounts opened during the demonetisation period and the deposits made into them,” suggested the source in marketing department. “It is actually in the interest of farmers as the government can streamline cotton trade if it controls the illegal activities,” he added.