Luxury retailers have seen a sudden uptick in business after the Reserve Bank of India’s recent mandate to withdraw Rs 2,000 currency notes from circulation.
Although they remain legal tender, a reluctance to endure lengthy queues at banks and the potential association of high-value notes with unaccounted funds have driven the affluent to spend money on luxury items rather than deposit it in banks.
According to a report in the Mint, the past weekend also saw a notable shift away from credit card transactions to cash, mostly in Rs 2,000 notes, according to Vishal Anand, the CEO of Moonshine Food Ventures, which operates fine-dining restaurants such as Saga in Gurugram and Farzi Cafe in Aerocity, among others.
“The usage shot up a little bit, but people did not spend more just to get rid of the cash,” he said. Anand said that the denomination had been out of circulation for a while now, “so most people knew this was coming”. “We are accepting it and depositing in the banks,” he said.
Other retailers also said they are open to accepting the Rs 2,000 notes as the RBI has clarified that the bills remain legal tender. To be sure, the sales surge isn’t as significant as expected, said a retail executive requesting anonymity.
Others said it is “too early” to gauge the consequence of the announcement, said Kumar Rajagopalan, chief executive of the Retailers Association of India.
Titan Co.-owned jewellery store chain Tanishq said it continues to accept the denomination in cash in full compliance with regulations both in letter and spirit. “In any case, in Tanishq, we don’t get folks seeking to convert their unaccounted money due to our strict norms on PAN cards, etc., as per PMLA (Prevention of Money Laundering Act) norms. At present, I do not have any data or understanding of any significant jump in cash business in the last three days,” said Ajoy Chawla, CEO of the jewellery division at Titan Co.