Meet Mumbai’s ‘kadak’ gang

With crisp notes in high demand owing to their auspicious significance, mid-day digs out the details on how this business—where legal Indian currency is sold at high commissions—operates right outside the RBI office in SoBo

The recent ‘new currency note’ scams reported in Navi Mumbai spurred mid-day into launching an investigation into the old currency notes exchange racket near RBI at Fort. The agents, six-seven women, loiter in the area, waiting for customers. This correspondent approached some of them and found that they exchange old notes for a commission ranging from Rs 100 to Rs 350 per bundle of 100 notes. The highest commission was on Rs 10 notes, which the agents claimed were in high demand. While these agents have been working in the area for years, no action has been taken against them.

The mid-day team found that the agents carry small amounts of new notes in their handbag, without any fear. During conversation with the correspondent, they revealed that their work booms during Diwali and the wedding season from November to March. This is because new notes are considered auspicious. Many businessmen prefer distributing new notes as a Diwali bonus to their employees as well.

Also read: Mumbai Crime: Note scam gang struck again, but failed

An agent takes the reporter to a paan shop

The exchange of old notes with new notes for a commission is illegal as Section 26 (1) of The Reserve Bank of India Act, 1934 states every bank note shall be legal tender at any place in payment, or on account for the amount expressed therein, and shall be guaranteed by the Central government.

Panwala stands surety

mid-day first visited the area behind the RBI office at Fort on Friday and met with an agent named Hemlata Chaurasiya. The correspondent posed as a customer looking to exchange Rs 1 lakh into new notes. 

To win confidence, Chaurasiya first said, “We can convert crores of rupees at a time. Your amount is too low. There is no risk. We have been doing this since the past 18 years at this very spot. We take the new notes from our sources and exchange them for old notes for a commission. That is all. Don’t worry.”

Speaking on the commission rate, she said, “We take Rs 350 per bundle for Rs 10 notes, Rs 120 for Rs 20 notes, Rs 110 for Rs 50 notes and Rs 100 for Rs 100, Rs 200 and Rs 500 notes.” Chaurasiya then showed bundles of new notes in her bag.

The mid-day correspondent in conversation with one of the agents at Fort on Friday

The investigation further revealed that the agents have roped in a panwala, whose shop is located near Verma Chambers at Fort, in the racket, for big transactions. As the agents need time to exchange large amounts of old notes, they take the customers to this panwala and make him stand surety till they return with new notes. 

The panwala said, “Customers give the notes to me. They can trust me because I run this shop and will be here while the women go to change the notes. These agents have never cheated any customer.”

“They have been working here for more than 15 years. I am not a part of this and I am not getting any commission. I just help these women who are earning some money by selling these notes,” he added.

Rs 10 notes in high demand

The mid-day team visited the spot again on Monday to interact with others. The correspondent approached three agents who were sitting together, seeking to exchange Rs 1 lakh in Rs 10 notes.

One of the agents said, “I have it in my bag only. The commission is Rs 300 per bundle. You are lucky as the rate has just gone down after Diwali. The rates will go up again soon once the wedding season starts.”

Three agents sit behind the RBI office in Fort

When the reporter refused to pay the commission saying he would go to a bank instead, the agent said, “Bank jaake koi faida nahi (there’s no point in going to the bank). RBI does not print many Rs 10 notes but the demand for the same is really high. We charge only Rs 300 but we are the only ones who can give you new Rs 10 notes in the city.”

‘Can’t reveal source’

The correspondent then enquired with the other agents if they would give a discount, to which one of them said, “This is our daily business and our rates are fixed. We also have to give a cut to our sources. Our business depends on luck. We get good income sometimes, especially during Diwali, but sometimes we go without any earnings.” When asked about where they get the new notes from, the women remained tight-lipped. One agent even said that they would not reveal the names of their sources even if offered money.  

‘No IPC section to act’ 

Retired ACP Sunil Deshmukh told mid-day, “There is no such Section in the IPC to take action against the people who are selling currency notes on the road. But as per the rules, it is illegal to carry out cash transactions above Rs 10,000. This is a punishable act, but it falls under the money laundering department, and income tax department. They can take action against such individuals.” 

Senior Inspector Rajesh Pawar of MRA Marg police station, which covers the area where the RBI office is located, said, “We never received any such complaints of people selling notes behind the RBI office. We have not registered any cases yet.” A bank expert, on the condition of anonymity, said that the bank can take action only if the act is taking place on its premises or any of its staff is directly involved. 

Rs 300
Commission for exchanging a bundle of 100 Rs 10 notes

Rs 100
Commission for each bundle of Rs 100, Rs 200, Rs 500 notes

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