Demonetisation: Indelible ink to prevent repeat withdrawals but how isn’t clear

However, the latest move in the government’s demonetisation drive was described by a top bank officers’ representative as equivalent to “burning the house to catch a rat”.

Written by Arun Janardhanan , Johnson T A , Sunny Verma | New Delhi/ Bengaluru/ Chennai | Published:November 16, 2016 4:19 am
demonetisation, indelible ink mark, bank ink mark, narendra modi, shaktikanta das, demonetisation policy, currency demonetised, currency notes, currency banned, rs 500 note, rs 1000 note, india news, indian express A government official in Delhi said the plan was to disburse the ink to banks from Tuesday night.

A MYSORE company, the only recognised producer of indelible ink or voter’s ink in India, is scrambling to ramp up production “on a war footing” after the Centre Tuesday asked banks to start tagging those exchanging old Rs 500 and Rs 1,000 notes to prevent “unscrupulous elements” from sending people to exchange money multiple times at different branches.

Announcing the use of indelible ink, Economic Affairs Secretary Shaktikanta Das said: “We have received reports that certain unscrupulous elements, who are trying to convert black money into white, have organised groups of innocent people and are sending them from one branch to another to exchange notes and get Rs 4,500 each. As a result, what is happening is that the benefit of withdrawal of cash is getting restricted to a smaller number of people…to prevent such kind of misuse, the branches of banks will take recourse to the use of indelible ink marks for disbursement of cash.”

WATCH VIDEO: Demonetisation: Banks Provide New Rs 500 Notes

Tuesday’s announcement was described as a “sudden development” by C Harakumar, general manager, Mysore Paints and Varnish Ltd (MPVL), which is run by the Karnataka government and has been producing the indelible ink since 1962.

“Since this afternoon, several banks have approached us with queries about the ink, and about how many people can be marked with ink from one 5-ml bottle. It is a sudden development and we will have to stretch ourselves and work on a war-footing over the next few days,’’ Harakumar said.

However, the latest move in the government’s demonetisation drive — the daily cash limit per account holder for exchanging the old notes at banks is Rs 4,500 — was described by a top bank officers’ representative as equivalent to “burning the house to catch a rat”.

“The demonetisation drive has been proved as something that violates the fundamental right to life. Poor planning in rolling out this programme has ended up preventing lakhs of people from withdrawing money from their own accounts. The decision to mark fingers of all customers with indelible ink to prevent repeated money exchange is like burning the house to catch a rat. This is going to put the public in more difficulty now,” D Thomas Franco, vice president, All India Bank Officers Confederation, told The Indian Express in Chennai.

A government official in Delhi said the plan was to disburse the ink to banks from Tuesday night. He said that it would be applied on fingers of the right hand of customers to “ensure there was no confusion during the elections coming up in many parts”, when indelible ink would be applied on the forefinger of the left hand of voters.

“It is the same ink used by the Election Commission of India,” said the official. Finance Ministry officials, however, did not provide a clear answer on specific queries regarding how a person having the ink mark would be able to exchange currency notes on other days.

The indelible ink is manufactured and supplied by MPVL in association with the Election Commission, the National Physical Laboratory, which devised the chemical formula, and the National Research Development Corporation. The ink contains silver nitrate, which stains when exposed to ultraviolet light.

“We are expecting orders for 5-ml bottles of the ink from the banks. There will be a strain on our manufacturing capacity because we were not prepared. During elections, we have a lot of time and are well-prepared. Now we have to procure the raw material and start production immediately. We have to take stock as production progresses,’’ said Harakumar.

According to the MPVL official, banks approached the company under the assumption that there would be stocks readily available. “We are looking at starting production at 6 am on Wednesday. We have sought additional manpower. We will start dispatching the ink by tomorrow evening to the banks,’’ said Harakumar.

At least 77 per cent of the production at MPVL is of indelible ink but the company also earns revenues from coatings and primers. For the general elections in 2009, MPVL produced 20 lakh 10-ml bottles of the ink. In 2014, when the last general elections were held, MPVL produced 2.3 crore kg of indelible ink and reported an annual revenue of Rs 47 crore. Last year, the company sold 1.21 crore kg of ink to post a revenue of Rs 25 crore.

The ink has also been used in pulse polio programmes in India and other countries and is sometimes used in hospitals to mark cancer-affected parts of the body.

In Delhi, Economic Affairs Secretary Das also said that the government was keeping a “close watch” on deposits in Jan Dhan accounts as, in many cases, such accounts are being misused for deposit of black money. Many Jan Dhan accounts are reportedly getting deposits of Rs 49,000, against the limit of Rs 50,000.

In Chennai, bank officers’ representative Franco said that the Economic Affairs Secretary had no authority to take the decision on using indelible ink. “Such decisions should come either from the Reserve Bank of India or the finance secretary… How many marks would bank staff put on customers who exchange the limited amount in two or three stages?” said Franco.

A government official said that the department of financial services and a team of experts were preparing a draft standard operating procedure on usage of the ink. “This will be circulated hopefully by tonight. This should clarify how a person can exchange old currency multiple times,” he said.

According to the finance ministry, the government has also set up a high-powered group under the Cabinet Secretary to monitor the supply of essential goods on the lines of the task force to monitor circulation of fake currency notes in vulnerable areas.

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  1. O
    Onkar Singh
    Nov 16, 2016 at 7:56 am
    Does it mean that govt by opening the Jan Dhan Gonna a/ C's didn't get any deposits? And now when those a/C's are receiving deposits,the Govt's Secretary is getting suious.This is true of such govt officials who don't think but take steps without planning just to please their political bosses( Modi in this case).
    Reply
    1. F
      Fake development
      Nov 16, 2016 at 7:32 am
      People should also be allowed to vote about this unilateral bias decision, if finger is to be marked with undeniable ink.
      Reply
      1. J
        Jayo khan
        Nov 15, 2016 at 11:47 pm
        But the move violates electoral procedure.
        Reply
        1. S
          sunny
          Nov 16, 2016 at 12:55 am
          what ever may be the reason but poor and middle cl families are suffering a lot w day standing in the queue leaving jobs and business bank is giving 2000 notes when going to buy something they dont have change to give.
          Reply
          1. K
            Kaliyan Pillai
            Nov 16, 2016 at 5:26 am
            Why they think foolish I don't know. They can insist the withdrawer to keep their linked mobile or p book with them. So they can easily pull out those agents and make the transaction smooth going.
            Reply
            1. B
              bharat
              Nov 16, 2016 at 5:38 am
              log itne lambi line mai khade hone k baad number aata hai lt;br/gt;dusre bank mai aadmi kaha jaake change kar paayega notes
              Reply
              1. B
                Bhaskar Hegde
                Nov 16, 2016 at 1:56 am
                Do not mislead people. It is to prevent repeated exchanges. Not withdrawals.lt;br/gt;lt;br/gt;Did not expect such poor reporting by Indian Express. Hope it is not deliberate attempt to stop this great initiative to eradicate corruption.lt;br/gt;lt;br/gt;I can understand political parties being upset for losing money, but why Indian Express is stooping this low? You were known for fighting corruption.
                Reply
                1. B
                  Bhaskar Hegde
                  Nov 16, 2016 at 1:48 am
                  When the house is about collapse due to rat infestation, it is better to burn it rather than allowing plague to spread further.
                  Reply
                  1. S
                    Save Humanity
                    Nov 15, 2016 at 11:48 pm
                    The government have long lists of individuals and Insutes thriving on Black Money. Government never acted, instead gave them time to make Black Money into White. The so called “Surgical Strike” on Corruption is nothing to do with Black Money. Question arise, why this strike? Actually governments throughout the world now wanted to control “Individual Hard Earned Money” How they can do? This can be achieved by compelling each and every individual to put their money in Banks control by government. Once they got money in Banks, now it is very easy to implement hundreds of Rules and Regulations, when and how much we can withdraw our own hard earned money etc. If you don’t agree with their rules and ideologies or step little out of line, your account can be blocked or freezed.lt;br/gt;This strike also serves the purpose to aid and promote agencies dealing with electronic money such as Online Wallets and online shopping czars. The ultimate goal is to make our society CASHLESS, where we can’t see, touch or feel money. Money generated out of ‘THIN AIR’ is called CASHLESS MONEY. It will be controlled by heartless electronic impulses operating in the machine. Expert says cashless money will be controlled by one server throughout the world (Control Center), so that few ruling elites can control the world potion “M control Mechanism”. Since we will not be having physical reach to the Cash, mes can be easily manited. They can easily on, off or slow the server, they can easily block or freeze people accounts if they go out of line or don’t support the ruling elite ideology. People will be just like Cattle or Herd. CASHLESS ECONOMY WILL BE ULTIMATE FORM OF SLAVERY: “Financial Guantanamo”. Sadly we are moving in that direction…
                    Reply
                    1. V
                      Vikky Baba
                      Nov 16, 2016 at 1:30 am
                      Don't mislead people, use of indelible ink only to stop exchanging old currency by same person.lt;br/gt;There is difference b/w "withdrawal" , "deposit" and "exchange".
                      Reply
                      1. I
                        Indian
                        Nov 16, 2016 at 6:00 am
                        P THIS ON URGENT : Those who exchange notes should give id proof in xerox and write down how many notes they have IN TOTAL they want in future to exchanged. If amount is big take small amount exchanged and deposit rest in the account
                        Reply
                        1. I
                          Indianajones
                          Nov 16, 2016 at 7:14 am
                          Beauraucracy which should have done the micro level planning to ensure smooth implementation of the government's plan, has failed it and discredited its efforts. It's time these privileged lot are sent home.
                          Reply
                          1. S
                            sunny
                            Nov 16, 2016 at 12:20 am
                            If I want to withdraw my money my finger have to be inked, what type of democracy we practicing . Let first Govt give bath with ink to our corrupt politician/businessman and then ink the hand of poor people
                            Reply
                            1. J
                              Joseph R Stephen
                              Nov 16, 2016 at 9:06 am
                              Soon BJP and MODI will be served with Kadak Chai and indelible ink from winning any elections.lt;br/gt;lt;br/gt;RIP
                              Reply
                              1. A
                                aftab
                                Nov 21, 2016 at 5:15 am
                                and you also burn within it..
                                Reply
                                1. M
                                  mackie noohuthambi
                                  Nov 16, 2016 at 8:56 am
                                  is there any advocates to sue the government against ordering indelible ink to be put on the fingers of those who are encashing just 4500 rupees. where our democracy is going. a hitler type of reign is now on and if it is not checked at the proper time, no doubt we may have to face another emergency period.mr modi is thinking himself too clever, and he should be warned that every man has to meet his Waterloo. this will be th first and last tenure for him.
                                  Reply
                                  1. M
                                    maha
                                    Nov 16, 2016 at 9:09 am
                                    Can't bhakts please stop telling us that we have "black money" and are therefore losing sleep and not liking demonetisation? This is getting extremely ridiculous. And extremely annoying when you have spent 5 hrs to get a small amount of money and are now running around for change. Talk about adding salt to wounds. Just accept that this is very badly planned - if they even had a plan in the first place. lt;br/gt;lt;br/gt;How about we say it is BJP's paid social media brigade that has had no problem exchanging their notes. Must be some secret membership card you lot have that gets you cash from the local office and therefore you have NO idea of what we face.
                                    Reply
                                    1. R
                                      roby mani
                                      Nov 16, 2016 at 3:42 pm
                                      Is there a restriction on the number of times a person can exchange notes from a bank?lt;br/gt;In case i have Rs 20,000, I will require more than one time to get the amount exchanged.lt;br/gt;lt;br/gt;The main objective of this scheme was not to flush out black money, but was mainly to corner the opposition parties in Uttar pradesh. BJP are the most corrupt men in the country today, but they claim to be the most honest persons in the land.
                                      Reply
                                      1. M
                                        Mayur Panghaal
                                        Nov 16, 2016 at 8:07 am
                                        So now Feku has decided to Ink the right hand for all those who exchange old currency for new.lt;br/gt;But since the daily limit is 4500 now,what stops someone from queuing up tomorrow ? lt;br/gt;And how will the bank be able to tell whether the ink is from today or yesterday ? lt;br/gt;--------------------------------lt;br/gt;Jai Feku raaj !! These are the people running India today !! lt;br/gt;God help us all !!
                                        Reply
                                        1. M
                                          Mayur Panghaal
                                          Nov 16, 2016 at 5:05 am
                                          Feku proving that he is real chaiwala.lt;br/gt;Now i fully believe he is chaiwala.lt;br/gt;Chai le lo....chai chai.....lt;br/gt;What a day !! What a country !!lt;br/gt;Any doubt now that farzixal strikes were a farce ?
                                          Reply
                                          1. M
                                            Mohan
                                            Nov 16, 2016 at 3:34 am
                                            Modi will do anything and everything to prevent people from withdrawing their own money but People will prevail in the end over corrupt Modi who is protecting Adani, Ambani, Birla, Mallay, Pawar, Lalit Modi while Modi's friend Reddy is spending 500 crore Black Money on her daughters marriage and Income Tax department can dare to catch him while they are Black mailing small shop keepers.
                                            Reply
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