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India demonetisation hits trade thru’ Benapole Land Port

India’s sudden move to replace 500 and 1,000 rupee notes has halved the trade with Bangladesh through the Benapole land port in Jessore, reports bdnews24.comBenapole
 Opening of trade instruments like LCs and TTs have drastically dropped at banks in Benapole as Indian traders have asked their Bangladeshi counterparts to not do so now anticipating losses.
In a televised address on Nov 8, Indian Prime Minister Narendra Modi said the old notes have been cancelled and replaced by new ones. He said the move aimed to curb black money, counterfeit notes and corruption.

“Exporters in India have told us to wait until the situation gets normal,” said Rabindranath Robin, an importer based at Dhaka’s Hazaribagh.

He says any trade will now lead to loss of the capital invested, let alone any profit.

Indian traders say the banks are short on supply of new currency notes.

“Current account holders are being allowed to withdraw up to 50,000 rupees a day and those with saving accounts 24,000,” said Pradip Kumar Roy, an exporter based in Petrapole Land Port, across the border to Benapole.

He said he has stopped trading like many others.

Banks at Benapole said businesses are not opening LCs now as they believe the demonetisation has caused the Rupee to drop against the Taka.

“Between Nov 1 and 6, we have processed LCs of 13 importers, but only 10 LCs between Nov 7 and 19 after the move,” said Arafat Hossain, who heads the LC wing at the Islami Bank’s local branch.

The Clearing and Forwarding Agents Association of Benapole says the lack of cash at Indian banks has heavily disrupted trade.

“Indian exporters are not being able to cash the LCs for the goods they had sent due to the cash crunch in banks,” said the body’s Joint Secretary Jamal Hossain.
The Clearing and Forwarding Agents Association at India’s Petrapole said the amount of daily trade has dropped by 50 percent.

“Before the demonetisation, every day on an average, 400 trucks would enter Benapole, but the number has halved,” said General Secretary Kartik Chakrabarty.

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