A Cash Crackdown Hits Gold Pawners
By GCRU Gold News on Thursday, December 1 2016, 23:41 - Permalink
The gold-loan business has suddenly gotten bumpy. Prime Minister Narendra Modi’s decision last month to invalidate all 500-rupee and 1,000-rupee notes has Indians scrambling to get their hands on valid currency. Because almost three-fourths of payments for gold-loan interest and principal are made in cash, as opposed to, say, bank transfers, the shortage of legal tender is hurting lenders. Modi’s move, known as demonetization, is designed to crack down on tax evasion by forcing people to tender their cash to the bank, where it can be recorded.