Reliance Jio has taken on the rival cartel of service providers almost single-handedly. However, the Mukesh Ambani Company is not exactly pleased with the government decision to extend the use of old Rs. 500 bills until December 15. It fears the move will be counterproductive and could lead to large-scale money laundering. Use of inactive Rs. 500 notes for pre-paid mobile recharges has led to fears that the move will lead to misuse at the retail level.
The move to demonetize the Rs. 500 and Rs. 1000 note was meant to be a death knell for black-marketers and black money. How successful the government is in this venture will be seen only after the dust has settled down.
On the other hand the cellular operators association (COAI), however, disagrees. The last few days has seen a steep fall in their recharges primarily due to the shortage of cash. The move to allow Rs. 500 for recharges will ease the difficulties faced by the common man to a great extent.
Many skeptics have however sided with Jio and accused the government of not having clarity in its purpose and announcements. The risk of money laundering is very high as retail outlets will start exchange services and earn handsome profits on multiple top-ups with an old note.
A retailer in a tier III town can easily dupe an ignorant customer and state that the government is offering top ups in old Rs. 500 notes. However, he can give multiple recharges and for a Commission will dispose of the defunct currency. Such fears have also been expressed by other government officials also.
The last couple of days has seen Bank Officers being booked for funneling out the defunct currency for a fat price. So Jio’s fears are not unfounded. However, there are many who blame the lack of preparation by the government before demonetization. This is causing immense hardship for the common man and also leading to an extension of the use of old currency in select outlets.