Chennai: Gold sold like hot cakes, literally. As the news of demonetisation of Rs 500 and Rs1,000 broke late on Tuesday evening, people in hordes thronged jewellery shops across Chennai scrambling to convert money into gold, considered a safe investment.
The jewellery shops obliged them by keeping their shutters up through the night thus raking in crores of rupees. Along with jewellery majors, small shops in Tamil Nadu welcomed customers till Tuesday midnight, thus making money out of customers’ panic.
According to president of Madras Jewellers and Diamond Merchants Association, Jayanthilal Challani, late evening of Tuesday resembled an Akshaya Tritiya day, with customers thronging the shops of all sorts. Echoing the same, a small merchant at Theni district said that he has seen four times more sales on Tuesday evening, than on an average day.
“We cannot ask the customers to go back. Popular jewellery brands were all filled up, prompting people to come to smaller shops,” the merchant added.
With wedding season around the corner, panicked parents rushed to jewellery shops to convert their savings to gold. “I saved a lot of money for my daughter’s wedding, which is scheduled next month. After the announcement, I hurried to the nearby shop and purchased gold at 11pm Tuesday,” said a real estate agent.
On Cathedral Road and at Purusawalkam –localities that haven well-known jewelers – were abuzz with customers. Customers, in an unusual way, were not bothered about the designs and the waste percentage in the jewellery, as their prime aim was to buy it before the deadline of 12 on Wednesday.
Black money pushed to banks via borrowers
If a person has pledged property documents or gold and struggling to redeem it, it is possible that persons with huge amounts of black money could be looking for him. In Chennai, people with black money are offering cash to such people who have borrowed from banks to redeem the pledged documents and gold without interest.
“The banks will have to accept the money, even if it is old notes, from the borrower without asking questions and close the loan. The borrower will be allowed to settle the money by the financier at a later date. This will allow the financier to get rid of his old notes and collect the money back from the borrowers after three or six months. Borrowers will be more than happy to do it because he will be getting it free of interest. Of course, the financier will do this only with people he trusts,” noted an insider in the loan sector.
Those who stash black money in huge quantity had been queuing up at gold jewellery shops since Tuesday night to convert the money into gold.
“They were ready to buy finished gold even at a 30 per cent wastage rate while in other regular days the wastage will not go beyond 10 per cent. Buying gold continued on Wednesday also. But the shopkeepers found that they can’t match the demand due to lack of stock. Some others had turned into new area—helping borrowers to close their debt in banks with old notes,” sources added.
