Illegal forex flourishes in city post demonetisation

HYDERABAD: The crisis created due to demonetisation of the higher denomination currency notes has increased the demand for foreign currency in Hyderabad’s markets. The current illegal exchange rate of one US Dollar is now Rs. 88 and one Kuwait Dinar is around Rs. 250 in the city.

Taking advantage of the crisis faced by the people in exchange of demonetised currency, several foreign currency exchange dealers and some private persons are taking huge commissions to issue foreign currency.  

The decision of the Union Government to demonetise Rs 500 and Rs 1,000 notes from November 9, has bewildered the people, as most of them had their savings and in many cases, unaccounted money, in the form of higher denomination currency notes.

Since then, the demand for foreign currencies has gotten a boost and businessmen are ready to pay high commissions to get their money exchanged.

Foreign currencies with higher demand are the US Dollar, the UAE Riyal and the Kuwaiti Dinars, sources said.

Several private parties and illegal traders, who have the foreign currency which was sent to them by either their relatives or that was exchanged from the legal dealers, were taking commission between 20 per cent to 30 per cent of the amount being exchanged.

It is also learnt that the non-resident-Indians and travelers from western countries were the key targets in these transactions.

As the banks have a limit of Rs 4,000 exchange per day and Rs 20,000 withdrawal limit per week, people in desperate need of money are approaching the dealers, who operate mostly from the old city.  

A source said: “For exchange of Rs 1 crore of demonetised currency, Rs 1.3 crore has to be paid. The entire money will be given in the form of foreign currency. Currently, $1 is now Rs 88, one Dinar is around Rs 250. Several people are exchanging the currency in desperation.”

Modus operandi  

When asked about how the dealers manage to get the demonetised notes exchanged, the source said that the government has given deadline till December 30, to deposit it in the banks, and they get it done everyday in smaller amounts.

“Each current account can have a balance up to Rs 2 crore. So, they either collude with businessmen to deposit the money, or deposit the money in their sub-dealers or workers accounts in smaller amounts. They have their own plans,” said the source.

However, the city police are clueless about this process. The police are also wondering how would such huge amounts get exchanged without coming under the Income Tax (IT) department and Directorate of Revenue Intelligence (DRI) scanner.

Meanwhile, police are keeping track of the foreign currency coming into the city, through visitors and foreign returnees.