New Delhi: The Supreme Court-constituted Special Investigation team (SIT) on black money has recommended enacting a law in India to cap cash transactions at ₹ 3 lakh and the cash holding limit at ₹ 15 lakh.

Through this, it hopes to create paper trails for all high-value transactions and effectively curb black money in the domestic economy, especially in the real estate and the jewellery sectors.

But is this feasible?

Many countries have managed to successfully check cash transactions, according to SIT’s report. But some countries like Germany, where use of cash is widespread, are facing a backlash from the public over proposals to cap cash transactions. In India too, cash is still a preferred mode of payment and the National Democratic Alliance may find the going tough if it decides to act on the recommendations of SIT.

A look at some of the other countries that have enforced such limits per transaction to curb money laundering and to clamp down on financing for activities like terrorism.

• France: Cash transactions have been capped at €1,000. This limit was €3,000 till last year and was revised after a spate of terrorist attacks.

• Italy: Cash transactions were allowed only up to €999.99 earlier, but this was revised upwards this year to €2,999.99.

• Spain: Cash transactions are capped at €2,500 for residents and €15,000 for non-residents. Any cash transaction between consumers and traders above permissible limits can attract a fine of up to 25% of the transferred amount.

• Portugal: Cash payments towards goods and services is only allowed up to €1,000. All payments above this limit needs to be done through a bank account or electronically.

• Slovakia: Cash payments for purchases are restricted at €5,000.

• Czech Republic: This country has restricted cash payments, per day, to around €14,000.

• Bulgaria: Cash transactions are capped at around €5,100.

• Belgium: Cash payments are limited to €3,000.

• Greece: Cash payments for the purchase of products and services are allowed up to €1,500 euros.

• Switzerland: The cap on cash transactions in Switzerland is relatively much higher at around €92,000.

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