It’s time to ban the £50 note and befuddle the villains
Big notes attract big criminals. The Indian government plans to thwart villains by doing away with larger bills. Politicians are upset:
The prime minister last week outlawed 500- and 1,000-rupee notes in a drive to rein in corruption and a shadow economy that accounts for a fifth of India’s $2.1tn gross domestic product.
In southern Spain I met a woman whose estranged husband funded her and their young son’s lifestyle with wads of 500 euro notes. I know this because when the lad flushed a clutch of them down the toilet, she wailed, “Those were for my new t***. ” Could she get more cash? Not easily. The husband, an ex-pat, earned his wedge doing a bit of this and bit of that. She’d have to wait and see.
In India another sort of t** gets the big notes:
With no state election funding, illicit cash is the lifeblood for political parties that collect money from candidates and businessmen, and then spend it on staging rallies, hiring helicopters and on “gifts” to win votes.
Spending on the Uttar Pradesh election is forecast to hit a record 40bn rupees ($590m), despite the cancellation of big denominations.
“We will have to plan the entire election strategy all over again,” said Pradeep Mathur, a senior Uttar Pradesh leader of the Congress opposition party that was trounced by the BJP in national elections in 2014.
Big notes are gong out of fashiin,
In 2000, Canada got rid of its $1,000 bills and Singapore called time in its $10,000 bills.
In April 2016, the BBC reported: “The European Central Bank (ECB) says it will no longer produce the €500 (£400; $575) note because of concerns it could facilitate illegal activities.”
Why? In 2010, we read:
After eight months of rigorous analysis of currency trading in the UK, the Serious Organised Crime Agency (Soca) has established that the 500 euro note is at the heart of money laundering. The reason is simple: it’s easier to shift.
Our proposal is to eliminate high denomination, high value currency notes, such as the €500 note, the $100 bill, the CHF1,000 note and the £50 note. Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities – the “bad guys” of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their “business models”.