Rs 500, Rs 1,000 ban: Do NOT do these things or else you will end up helping crooks

There will be some who will come up with creative ways to beat the system.

Bindisha Sarang November 09, 2016 10:09:39 IST
Rs 500, Rs 1,000 ban: Do NOT do these things or else you will end up helping crooks

In an unexpected move, the Modi government banned Rs 500 and Rs 1,000 notes last evening and the whole country was shocked. Many rushed to ATMs to make sure they had enough cash in hand for the next few days till the banks reopened on November 9 or 10. However, there will be some who will come up with creative ways to beat the system.

Let’s say people with black money are divided into three types. The super, super rich, where the money will probably be stuck in accounts overseas. The rich and influential who have the contacts to change their black money to white and those who have small amounts (less than Rs 10 lakhs) under the mattress as black money. The people we spoke to have creative answers to ways to get rid of the money under their mattresses. Their strategy? Divide and rule.

Rs 500 Rs 1000 ban Do NOT do these things or else you will end up helping crooks

Representational image. Reuters

First of course they will break down the lump sum into smaller amounts to dispose-off in the following ways.

First chunk, take the official route of exchanging small amounts across banks, post offices until 30 December, under your own name. If possible, keep some for later next year before 31 March at RBI by giving a declaration, aka, reason for the delay.

Second, the money will be divided and put in family member’s account across all bank accounts they hold, and since the amounts will be smaller, it should not be an issue.

Let’s not forget, you can officially get banned currency notes exchanged with the help of relatives or friends through their accounts, if someone doesn't have a bank account.

As per the RBI, “You can do that if the account holder relative/friend etc. gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.” If you have old, unsuspecting relatives, this route should work. Here's how.

But, this relative and friends clause can be exploited as well, especially if you can convince a lesser mortal to exchange your notes as their savings at the bank. Let’s just say it’s good-will money laundering. Yes, of course the maid or driver will be more than happy to take small amount like Rs 30,000 to their bank in chunks of two or three till December 30 and exchange it for Rs 4000 cash and rest as white money in their account. They could return that amount via cheques in a phased out manner. How did you get the Rs 30,000? Well, they will show that as their hard-earned savings.

Another issue is that money laundering or hawala is going to increase. There’s an entire body of strangers and fixers who will take your money, show it as their savings and return it back to you over phased-out cheques for a commission.

Another way is to move these notes in physical assets, like gold and diamond. A small time goldsmith or small local jeweler will simply take your cash and officially sell you an ornament, just that the bill will be back dated, before 9 November, for some extra money. This entirely depends on the relation you have with the jeweler. Or, if you know of jewelers ready to crack a deal with you for extra money, it would work for you. Small-sized jewellery shop owners don’t even ask for your valid IDs like PAN card copies to sell you gold of less than Rs 2 lakhs.

The truth is you really can’t do much about the goldsmiths and jewelers. And, this isn’t a story which offers tips to convert black money white. In fact, we would like to caution you to not fall for a request to become a money mule, knowingly or unknowingly.

Money mule are inadvertent victims of someone else's money laundering efforts or are willing mules.

So, if you have a friend or family or a boss asking you to exchange only a small amount in exchange of a phased-out payment later. Just say, No.

Here's how you might becomes a Money mule unknowingly.

Money laundering is going to increase which means fraudsters will use online route to make your a victim or money mule.

What might happen:

The online fraudsters could get in touch with you (money mule) via online or offline route. A typical way this works is as follows:

  1. You (potential, money mule) will get a job offer via an email or a pubic chat room. The job description would say it's financial management work and hence requires you to simply transfer funds, which the fraudster or his agent transfers to your bank account. Of course, these companies/ firm/ enterprise are fake, but they may give you official looking papers to sign or a fake contract.
  2. You receive funds in your account from the fraudster/s or their agents, and you have to transfer these funds. Your compensation is not a fixed salary, but a commission of the amount of funds you transfer to overseas accounts.

You think you are doing your job, but in reality, you are using your account for money laundering activity.

This isn’t a new thing. Such fraud job offers were around a few years ago.

What else might happen: Offline frauds will also be on the rise. In the past, instances have been known where agents have contacted people (potential money mules) and offered them a commission to use their accounts for a small commission. Of course, since the potential mule has already done their KYC norms and has a bank account, they meet the fraudster's requirement. All they say is that they would transfer funds to your account, you get to keep a commission, while you have to give them your ATM card/cheques, etc, from which they would withdraw the remaining funds. That's not all, these days fraudsters even make fake websites of genuine companies and offer such fake financial management jobs via the websites.

Be careful of emails or website job offers which ask you to be representatives of overseas companies and the job description is financial management. Any company which offers high commissions simply to transfer funds should be a red flag. If you take a look at the sample email, you will see that there are spelling mistakes and grammatical errors. This too works as a red flag.

Disclaimer: There are people out there who might use unsuspecting people to convert their black money into white. This story is to make readers aware of their ways, to take the necessary precaution. 



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