MUMBAI: The premium for illegal exchange of old currency notes has collapsed and money changers are proposing to pay interest on old notes provided the owner agrees to lock in the money for a year or more.The dramatic turnaround within a few weeks after the currency swap could mean that people with illgotten wealth have either found other ingenious ways of converting their money or have decided to make use of the government’s second amnesty scheme. ET spoke to businessmen, builders and politicians to understand the issue and discovered that the sky high premiums that existed immediately after Prime Minister Narendra Modi’s currency swap move have evaporated.Sample this: A day after November 8, people tried various ways to convert their black money into white. A premium of as much as 40% was being charged by those involved in this trade.This dropped to 20-30% in the following weeks and settled at 10% a week back. Interestingly, in the last few days the situation has reversed. Now if you have Rs 1crore in cash, there are people willing to take the money off your hands and give you an interest of 6-8% after a year.“The only hitch is that you have to lock in your money for a year or so; a few days back an interest of 6% was being offered, it has gone up to 8%,” said one of the individuals involved in such a trade.“The decrease in the payment of premium for exchange of black money and interest being offered to get people to invest their black money is probably a reflection that the black money has easily entered the system,” said an economic analyst on condition of anonymity.He added that it was probably a mistake to think that black money was static. “Black money gets converted into white and then into black several times a day. For instance, suppose you are a salaried individual with no black money; when you pay a bribe to a cop, it becomes black money. However, if he eats in a restaurant and the money paid becomes white again. This money has been intermingling all the time, which is where the problem has arisen,” said the analyst.How have huge sums of money been converted into white? Those involved said there are different ways. “Many builders had huge debt; they have used black money to pay off their debts, labour contractors, cement and steel companies; they also paid them in advance for the next six months. This is just one example of how the cash has come back into the system,” said a businessman. Others said they are using black money to show cash in hand.Anecdotal evidence suggests such incidents have happened but those looking to convert their black money in this manner may also face hurdles. For instance, the labour contractor or the supplier who gets his money in old notes will have to exchange those. If he deposits it in his bank account, he would have to show the paper trail, failing which the bank may not accept the money.Dr Saumya Kanti Ghosh, chief economic adviser (economic research department) at SBI , disagreed that the entire black money has entered the system. “People are always finding out ingenious ways to launder black money, innovative ways are being tried out. There are always people trying to take advantage, even in the financial crisis of 2008. We can expect the government would come up with ways to tackle it,” said Ghosh.