Planeloads of cash to turn India's black money white

Mumbai

AS Indians struggle with the chaos caused by last month's sudden banning of their 500 and 1,000 rupee notes, money-laundering networks are spreading across the country, seizing on a new market in helping people turn their cash hoards into legal tender.

While people have until year-end to deposit old notes in their bank accounts, the government has said it will scrutinise large cash deposits and money with undeclared origins - and will tax or penalise depositors. That's created a scramble for ways to turn so-called black money, the local term for cash that has evaded taxation, into white.

Agents offering to launder money are using creative means, including flying banned cash by the planeload to northeastern states exempt from restrictions as well as connecting people to high-turnover businesses that can deem old cash as revenue, keep a portion of it, and return the rest, according to people involved in the networks. Premiums range from 10 per cent to 50 per cent, depending on the difficulty, they say. At least one property brokerage is offering to arrange the sale of ap…