Currency Demonetisation and Future course of Indian Economy

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Suraj » 10 Nov 2016 05:01

nachiket wrote:IMHO a lot of the black money hoarders will deposit their money with banks and take a chance with the IT department, rather than throwing it away. They are going to have a lot of work on their hands anyway and would like to go after the really big fish. But the side-effect of that might be that the cash reserves of our stressed banks might suddenly go up. Even if the IT department doesn't catch most of the tax evaders and bribe takers, this might be a shot int he arm for the economy by itself.

To me, this is the best benefit. It massively recapitalizes the banking sector, which in turn means real interest rates are driven down, while simultaneously also driving down demand driven inflation because there are fewer notes out there chasing the same goods, and your white money does not have others' black money competing against you. That applies even to things like dal and onions - the black marketers were skimming your white money away by hoarding stuff every season to profit from the price rise.
nachiket wrote:But I wonder how the people in villages are going to cope. The closest bank might be dozens of km away or more. Especially in states where many villages still do not have electricity. Will take time for this news to percolate to everyone as well.

Postal outlets are authorized to accept the now non legal tender notes. Also, the PMJDY account push needs to be seen in this context. I'm 100% certain GoI planned this much earlier than 6 months ago. They needed Adhaar/PAN and PMJDY in place. They implemented the disclosure scheme to give one last chance, then shut the door in everyone's face.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby saip » 10 Nov 2016 05:03

^^May be the Government should arrange mobile banks to go to the villages and exchange currency.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Suraj » 10 Nov 2016 05:20

khan wrote:
Suraj wrote:Anyone thinking their problems are over once the cash is out of their hands, is in for a surprise knock on the door later. No number of conduits is going to help them. In probabilistic terms, the more conduits that are created, there more points of failure will exist. Each of them individually have less to lose by ratting out the source of cash, and therefore the overall probability of conviction is always greater when you choose to use multiple conduits splitting a smaller amount amongst them, and in fact more conduits worsens your odds of detection rather than improves the chances of concealment. Your probability of safety is always greater when you keep it on hand yourself, and destroy whatever you can't deposit and eat the losses for. GoI can easily mandate a greater punishment for those caught indirectly rather than directly, i.e., incriminating yourself gets you some leniency you lose if someone else incriminates you.


It could be something as simple as one or a group of corrupt bank employees.

Look, anything can be done on a small incidental scale in a very narrow context. But that's not replicable nationwide for everyone. There's going to be a few leaks here and there. But focusing on creative ways in which such leaks may occur, is missing the wood for the trees. Many many people will 'get away' with just depositing their money and paying fines. They can't summarily round up all the people and jail them for the threatened durations. Some will be, most will not.

But the more important matter is that informal activity is being suddenly made formal in one immediate step. We're talking about potentially a few hundred billion dollars worth of cash being deposited. It fixes a lot of things GoI struggles to handle - high interest rates, inability to effectively manage liquidity and rate movement, price control and hoarding management, and more. SBI's deposit base is about $350 billion. What happens when half an SBI (or even almost a full SBI) is added to the banking credit system ?

Rather than painfully fixing every little thing, GoI simply took away the medium of exchange entirely and made everyone start anew, this time tracked by them. No one can simply walk in with old money and walk out with new money of same face value. That's only possible for very small totals. Otherwise, you're allowed to deposit any amount, but withdrawals retain low limits. GoI gets back most of the cash that had been driving a parallel economy outside of its control, just like that. Being able to do so is a far more unprecedented rise in GoI's power and capability than people are giving it credit for. More than merely catching some people or fixing some things, it effectively recalibrates the entire structure of the economy from partially (30-60% ?) black to mostly white. That's a huge deal. And yes that'll also register as a much larger official GDP.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Pathik » 10 Nov 2016 05:30

Chandragupta wrote:Im all praise for this step. Nodoubt much needed chemo for Indian economy. But I hope he is not targeting the small and medium business owners. Many people including my own family, friends and business colleagues have 20-75 lakh in form of safety net cash from sale of property, deposited in bank lockers for a rainy day or marriage or buying house for children. They are all in a panic. These are not criminals, not connected to politicians, just regular people mostly BJP supporters who go about doing their businesses. Now with 200% penalty, prosecution and what not, what will these guys do?

There are plenty of big fish to be cought but dragging in sme owners will just kill off small scale industry. Bring them inside the tax net but why treat them like criminals?


They shouldn't have voted for Modi :D

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Pathik » 10 Nov 2016 05:34

shravanp wrote:A friend of mine has measly Rs 20 Lakhs and is contemplating whether to deposit and incur 200% penalty or simply burn it.


Why cant he just donate it to ten organisations or 10 poor people. At least he will get blessings.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Primus » 10 Nov 2016 05:48

bhavani wrote:. I am actually jumping up and down in cash thinking about all these jackasses who have stocked cash in Boxes, beds, Below the ground, Suitcases. we write Java code and work 24/7 and still cant afford what these guys could afford all these days...............


Baas, now you are simply being jealous, it is after all, only bijness :mrgreen:

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Re: Currency Demonitisation and Future course of Indian Economy

Postby nachiket » 10 Nov 2016 05:50

Primus wrote:
bhavani wrote:. I am actually jumping up and down in cash thinking about all these jackasses who have stocked cash in Boxes, beds, Below the ground, Suitcases. we write Java code and work 24/7 and still cant afford what these guys could afford all these days...............


Baas, now you are simply being jealous, it is after all, only bijness :mrgreen:

I'm guessing he wouldn't be jealous if these worthies hadn't been enjoying all this on the back of collecting bribes and evading taxes.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby bhavani » 10 Nov 2016 06:04

Primus wrote:
bhavani wrote:. I am actually jumping up and down in cash thinking about all these jackasses who have stocked cash in Boxes, beds, Below the ground, Suitcases. we write Java code and work 24/7 and still cant afford what these guys could afford all these days...............


Baas, now you are simply being jealous, it is after all, only bijness :mrgreen:


It is not business boss, most of it is corruption. No body pays the IT guy bribe for writing code faster.

Most of these guy get bribes for looking the other side as building contractors violate rules and some times for simply doing their work. Most of the middle class people and people whole buy real estate have to pay bribes just to get their property registered.

A lot of Gov Babu's get bribes for just doing their work, not for doing anything illegal or approving bad work. For approving violations, bribe percentages are higher.

The Private engineering colleges like GITAM, Gayatri, CBIT, collect any where between 10 to 30 lakh per student in donation, so per year they collect 10-20 crores easily in cash and all this is mostly kept unaccounted.

Andhra, Telangana areas have more black money than any state. even in the recent scheme where people deposited their black money, out of 65000 cores around 20000 came from AP and TS. Just one guy declared 10000 crores.

People like Chiranjeevi, Nagarjuna, konejeti Rosaiah, YS Jagan, Allu Arvind, Daggubati family, Murali mohan hold thousands of crores of illicit cash and properties.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Primus » 10 Nov 2016 06:35

bhavani wrote:
Primus wrote:
Baas, now you are simply being jealous, it is after all, only bijness :mrgreen:


It is not business boss, most of it is corruption. No body pays the IT guy bribe for writing code faster.

Most of these guy get bribes for looking the other side as building contractors violate rules and some times for simply doing their work. Most of the middle class people and people whole buy real estate have to pay bribes just to get their property registered.

A lot of Gov Babu's get bribes for just doing their work, not for doing anything illegal or approving bad work. For approving violations, bribe percentages are higher.

The Private engineering colleges like GITAM, Gayatri, CBIT, collect any where between 10 to 30 lakh per student in donation, so per year they collect 10-20 crores easily in cash and all this is mostly kept unaccounted.

Andhra, Telangana areas have more black money than any state. even in the recent scheme where people deposited their black money, out of 65000 cores around 20000 came from AP and TS. Just one guy declared 10000 crores.

People like Chiranjeevi, Nagarjuna, konejeti Rosaiah, YS Jagan, Allu Arvind, Daggubati family, Murali mohan hold thousands of crores of illicit cash and properties.


Bhavani Ji, I was being facetious, there is no icon for sarcasm here.

Whenever a hard working salaried person complains about the unfairness of a system that enables small-time business owners with little or no education to get away with ten times his income simply because of corruption and tax-evasion, he is accused of being jealous. This has been the state of affairs in India since Independence. Prior to that 'business-men' were mere mortals like anyone else unless they happened to have really big outfits. We have all seen the lavish and expensive weddings in business families as opposed to the salaried class, where the daughter often had trouble getting married since there was no money for dowry.

I agree with you completely, it is time for a change. Corruption, one of the greatest evils facing India needs to be weeded out.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Rishi Verma » 10 Nov 2016 06:57

bhavani wrote:I am from Vizag and a number of my relatives are in Liquor and Real estate business. Now there is absolute panic in those circles. Many of them hold anywhere between 50 Lakhs -Hundreds of Crores in Cash. Some are offering salaries to their staff for the next few months in cash, One prominent relative of mine who owns an engineering college, is now paying workers who work for him salaries for the next few weeks at a construction site. He has enrolled around 400 folks from the immediate families to work for him. He is paying really hefty amounts to these folks ( around 30 percent) for converting his cash. he is actual paying a lot of folks money for the next few months.

This guy lost in 2009 MLA elections as TDP candidate, then he spent around 50 crores in cash. I myself saw suitcases of Cash being Transported. Most of the cash that comes as donations from the engineering college is stored as cash.


Why don't you report him?
A single tweet to PMO will suffice.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby yensoy » 10 Nov 2016 07:03

A couple of points:

1. Small traders do a lot of cash transactions not only to evade IT but more importantly to evade local taxes which take a larger chunk out of their revenue. GST should fix a lot of this. But these folks are already in a lot of pain with warehouse chains, online stores taking an ever increasing market shar. Their days are numbered and it's no longer business as usual. This bunch of people have been strong BJP support base, so we have to see where this leads. They may in fact be happy to pay their fair share in exchange for avoiding harassment by authorities.

2. One benefit, as pointed out, is bringing a big portion of the cash liquidity (legit or otherwise) into the banking system. This is absolutely important because bank liquidity can be deployed, whereas cash is merely a medium of exchange and is not designed to be a store of value. Cash is the grease that lubricates the engine; unfortunately we have started to think of cash as the engine itself.

3. But the biggest effect this will have is widening of the tax base. Today people are willing to forego 100% of their ill-gotten cash so that they stay out of the IT radar, but for any who declare some or all of their cash they are marked for ever. The ball is in their court to decide - should I burn 10Cr, or should I declare it and end up paying taxes for the rest of my life (and retrospective taxes & penalties for the past)?

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Re: Currency Demonitisation and Future course of Indian Economy

Postby g.sarkar » 10 Nov 2016 08:13

http://economictimes.indiatimes.com/new ... 336526.cms
Nepal also hit as India bans its Rs 500, Rs 1,000 notes
KATHMANDU: India's decision to demonetise Rs 500 and Rs 1,000 currency notes had its ripple effect in Nepal -- affecting transactions, depressing the share market, creating difficulties for border residents and raising concerns among citizens working in India.
Nepal's central bank, Nepal Rastra Bank (NRB), issued a directive to all banks, financial institutions and money transfer companies to immediately halt the transactions of Indian currency of these denominations with effect from Wednesday.
The bank, which said it is in touch with its counterpart, the Reserve Bank of India, to resolve the problem, also discussed the issue with government officials. Reports in Nepali media suggested that people living in bordering areas are facing difficulties following the ban.
Indian currency covers 20 percent of total monetary transactions in Nepal. With the Indian decision, the local share market in Nepal decreased by 27 points. The bank, which said it is in touch with its counterpart, the Reserve Bank of India, to resolve the problem, also discussed the issue with government officials. Reports in Nepali media suggested that people living in bordering areas are facing difficulties following the ban.
Indian currency covers 20 percent of total monetary transactions in Nepal.
......
Nepal had banned use of Indian Rs 500 and Rs 1000 notes due to a number of counterfeit cases, and according to an Indian request. The Indian ban on use of its Rs 500 and Rs 1000 was removed in August last year, with Indian citizens allowed to carry such notes up to Rs 25,000 worth.
......

Nepal hosts a lot of smugglers, they are in trouble till a way is found to solve this glitch.
Gautam

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Re: Currency Demonitisation and Future course of Indian Economy

Postby putnanja » 10 Nov 2016 08:30

shravanp wrote:A friend of mine has measly Rs 20 Lakhs and is contemplating whether to deposit and incur 200% penalty or simply burn it.


Some things he can do:

1. Have each person in his household deposit Rs 2 lakhs into their account. Also ask for some relatives to do it if possible.
2. Hook up with some different jewellers and get some gold in different people's names
3. Donate to maximum of section 80G to NGOs to get tax benefit

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Suraj » 10 Nov 2016 08:51

putnanja wrote:
shravanp wrote:A friend of mine has measly Rs 20 Lakhs and is contemplating whether to deposit and incur 200% penalty or simply burn it.


Some things he can do:

1. Have each person in his household deposit Rs 2 lakhs into their account. Also ask for some relatives to do it if possible.
2. Hook up with some different jewellers and get some gold in different people's names
3. Donate to maximum of section 80G to NGOs to get tax benefit

All of these can and will be traced back to him. Further, please don't use this forum to discuss ways to conceal wealth.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby rahulm » 10 Nov 2016 09:04

Using 'my sweet lovely world' aka sons education, daughters marriage, maha yagna, everybody else does it, I work too hard etc to rationalise an illegal activity is dis ingenious.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby JayS » 10 Nov 2016 09:37

Rishi Verma wrote:
JayS wrote:Got from watsapp.

A news published in Gujju paper on 1st April this yr..

Interesting...

https://drive.google.com/file/d/0B9ijXlsoNPWzb3JiVFZhZGhhcGM/view?usp=drivesdk

Someone can translate in english??


Can't read it but it's photoshopped


How do you knw?? Is it the inconsistent pixels???

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Re: Currency Demonitisation and Future course of Indian Economy

Postby shiv » 10 Nov 2016 09:50

bhavani wrote:I am from Vizag and a number of my relatives are in Liquor and Real estate business. Now there is absolute panic in those circles. Many of them hold anywhere between 50 Lakhs -Hundreds of Crores in Cash. Some are offering salaries to their staff for the next few months in cash, One prominent relative of mine who owns an engineering college, is now paying workers who work for him salaries for the next few weeks at a construction site. He has enrolled around 400 folks from the immediate families to work for him. He is paying really hefty amounts to these folks ( around 30 percent) for converting his cash. he is actual paying a lot of folks money for the next few months.

How can he pay with demonetized notes?

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Bart S » 10 Nov 2016 09:57

shiv wrote:
bhavani wrote:I am from Vizag and a number of my relatives are in Liquor and Real estate business. Now there is absolute panic in those circles. Many of them hold anywhere between 50 Lakhs -Hundreds of Crores in Cash. Some are offering salaries to their staff for the next few months in cash, One prominent relative of mine who owns an engineering college, is now paying workers who work for him salaries for the next few weeks at a construction site. He has enrolled around 400 folks from the immediate families to work for him. He is paying really hefty amounts to these folks ( around 30 percent) for converting his cash. he is actual paying a lot of folks money for the next few months.

How can he pay with demonetized notes?


It's basically a laundering scheme whereby multiple people go in and demonetized currency (provided by him under a loan or advance wages deal) against their name and hence some of the black money becomes white while staying under the radar. However as mentioned earlier in the thread, this is actually risky since all it takes is one person to get caught, and the amount of money that can be laundered that way is fairly small anyway. It also works if he uses people who are not in the same boat themselves and have no real cash reserves in hand, and the challenge is to find enough of them who are willing to do that and are loyal enough.
Last edited by Bart S on 10 Nov 2016 09:59, edited 1 time in total.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby JayS » 10 Nov 2016 09:59

shiv wrote:
bhavani wrote:I am from Vizag and a number of my relatives are in Liquor and Real estate business. Now there is absolute panic in those circles. Many of them hold anywhere between 50 Lakhs -Hundreds of Crores in Cash. Some are offering salaries to their staff for the next few months in cash, One prominent relative of mine who owns an engineering college, is now paying workers who work for him salaries for the next few weeks at a construction site. He has enrolled around 400 folks from the immediate families to work for him. He is paying really hefty amounts to these folks ( around 30 percent) for converting his cash. he is actual paying a lot of folks money for the next few months.

How can he pay with demonetized notes?


Those who accept can put it in bank n make it white, given they can convince GOI its their own n within their income limit that they hv been declaring.

I hope people do not help these ******** for whatever reason. This is like defeating the whole purpose.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Yagnasri » 10 Nov 2016 10:06

The notes are still in circulation because people can deposit them in the Bank. So if anyone gets the cash then they can deposit in the bank and it is all right later. But the problem comes with large amounts like the case in Vizag mentioned above, it is very difficult to take all the money and put it into bank even in the name of many people. That will be a problem for real looters who has hundreds of crores. Further, now almost no one is going to keep such large cash with them in near future out of fear. So they have to keep the money in the banks.

Just yesterday, someone came and dumped two big bags of cash in a garbage dump in Mumbai and ran away. That is the best thing for many to do.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby JohnTitor » 10 Nov 2016 10:12

From WhatsApp. Not sure if it is as easy as this suggests

------

Oh my god... Indians are Always Indians for their Brilliancy..

This is insane.... look at jugadu indian dimag..

People are booking first AC and Second AC in railway with old currency... one person did booking of 72000 Rs.

They will cancel these tickets later and will get new currency.....

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Re: Currency Demonitisation and Future course of Indian Economy

Postby alexis » 10 Nov 2016 10:13

People depositing money in banks will not "recapitalize" banks! Please understand that.

Your deposits are a liability to the bank. This will force the banks to deploy this additional funds but looking at the state of the economy, it will be difficult. So interest rates will drop - good for a lot of people.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby alexis » 10 Nov 2016 10:14

John,
This will not change black money to white.. How is it different from depositing into a bank?

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Re: Currency Demonitisation and Future course of Indian Economy

Postby JohnTitor » 10 Nov 2016 10:16

I'm not sure but I believe that the railways are allowed to book tickets with the old notes for a few days/weeks

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Re: Currency Demonitisation and Future course of Indian Economy

Postby kmkraoind » 10 Nov 2016 10:18

కునుకులేని కట్టల పాములు! - స్థిరాస్తి.. బంగారం వ్యాపారుల్లో అలజడి - కృష్ణా- గుంటూరులో రూ.వేల కోట్ల కరెన్సీ

Its an Eenadu - Telugu article. The gist is: Real estate people from Guntur-Krishna Dists (AP capital Amaravathi area) who has stashed 1000s crores are in panic mode.

Even corrupt babus who has 50+ crores are in panic mode. For fear of ACB, they did not buy any fixed assets and they have all of it in currency. Even liquor barons who sell more than MRP have huge black money, and all of them are in panic mode.

Even Amaravathi area farmers who sold their lands from 70 lakhs to 1.2 crore all stashed their money in lockers, now they too are in fix.

All other bullet points are specific (vaguely described) cases of 100s of crores black money cases.
-----------
For me, instead of hunting individual wild animals, Modi has set whole corrupt forest to fire. From small snakes to big phythons, every predator is suffering now.
Last edited by kmkraoind on 10 Nov 2016 10:25, edited 1 time in total.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Pathik » 10 Nov 2016 10:24

kmkraoind wrote:[url=http://www.eenadu.net/homeinner.aspx?category=home&item=break45]
-----------
For me, instead of hunting individual wild animals, Modi has set whole corrupt forest to fire. From small snakes to big phythons, every predator is suffering now.


8) Mogambo
.
.
. Khush Hua

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Pathik » 10 Nov 2016 10:26

While its useful to have a dedicated thread for achievement tracking of Modi government. Most of his actions turn out into such humongous achievements that each deserves a thread of its own, all 56 of them

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Re: Currency Demonitisation and Future course of Indian Economy

Postby sum » 10 Nov 2016 10:30

For me, instead of hunting individual wild animals, Modi has set whole corrupt forest to fire. From small snakes to big phythons, every predator is suffering now.

If this doesnt accurately describe the term "balls of steel", i dont know what does.

Truely a great blessing to be 1st hand witness to such a period in India's timescale

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Re: Currency Demonitisation and Future course of Indian Economy

Postby alexis » 10 Nov 2016 10:32

JohnTitor wrote:I'm not sure but I believe that the railways are allowed to book tickets with the old notes for a few days/weeks


There is no restriction on depositing old notes into bank.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby morem » 10 Nov 2016 10:33

sum wrote:
For me, instead of hunting individual wild animals, Modi has set whole corrupt forest to fire. From small snakes to big phythons, every predator is suffering now.

If this doesnt accurately describe the term "balls of steel", i dont know what does.

Truely a great blessing to be 1st hand witness to such a period in India's timescale


Need a like button :) :) :)

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Re: Currency Demonitisation and Future course of Indian Economy

Postby sudarshan » 10 Nov 2016 10:35

JohnTitor wrote:I'm not sure but I believe that the railways are allowed to book tickets with the old notes for a few days/weeks


Yup, and people will book anonymously, I'm sure :P. You still need to give your name, address, etc. right? You give a false name and address, how do you cancel and get your money back?

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Yagnasri » 10 Nov 2016 10:43

If Reservation canceling is made then, you lose money and Indian railways gain it. We are ok with it. Most of the steps to hide the cash are not going to be easy as the time passes. Gold shops in Mumbai are open yesterday night up to 2 AM. People were running to bye gold. But what will people do this kind of drama for long?

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Re: Currency Demonitisation and Future course of Indian Economy

Postby JohnTitor » 10 Nov 2016 10:46

sudarshan wrote:
JohnTitor wrote:I'm not sure but I believe that the railways are allowed to book tickets with the old notes for a few days/weeks


Yup, and people will book anonymously, I'm sure :P. You still need to give your name, address, etc. right? You give a false name and address, how do you cancel and get your money back?

ah I see - I am unaware of how the system works. In the country I'm in, you can buy anonymously.. thought it was the same there. But do you need ID/address proof? Or can I book in someone elses name?

Yagnasri wrote:If Reservation canceling is made then, you lose money and Indian railways gain it. We are ok with it. Most of the steps to hide the cash are not going to be easy as the time passes. Gold shops in Mumbai are open yesterday night up to 2 AM. People were running to bye gold. But what will people do this kind of drama for long?

Ah right. So cancellation doesn't entitle you to a refund? Assumed it would, perhaps with a cancellation fee.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Rishi Verma » 10 Nov 2016 10:54

Currency notes of Rs2000 denomination shall have a GPS chip, a battery cell for power, a raspberry pie, a camera, a transmitter, a finger print scanner, and everytime it's used the finger prints, GPS location, and the image of the user will be sent to RBI.

(that's the rumour worth spreading)

Rishi Verma
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Re: Currency Demonitisation and Future course of Indian Economy

Postby Rishi Verma » 10 Nov 2016 10:58

SP, BSP, Congress, TMC, Shiv Sena, TDP, AIDMK. My friends disagree on who may be the biggest loser but in my small sampling BSP comes out winner... Loser.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Yagnasri » 10 Nov 2016 11:07

There are charges for cancelling railway reservations.

Do not underestimate TDP or AIDMK. Even DMK had large money. There are godowns full of cash for all these parties and they all will be looking for ways to save it.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Rammpal » 10 Nov 2016 11:16

Yagnasri wrote:There are charges for cancelling railway reservations.

Do not underestimate TDP or AIDMK. Even DMK had large money. There are godowns full of cash for all these parties and they all will be looking for ways to save it.


Declare fat bonuses to entire armies of cadres.
Sent them out to buy, gold, silver, for e.g.
And then.... "hey, folks, shouldn't you guys be 'donating' 90% of that gold to party ?!! :D "
Done deal.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby MohdKav » 10 Nov 2016 11:21

Marten wrote:
MohdKav wrote:
Your sources are wrong. 5% is the usual rate asked by conduits for changing black into white. Here this is an extraordinary situation, the legal tender to be changed doesnt have any value. If at all they have found any novel way, which I am sure they have, the commission wont be 5% for sure.

I'd like to meet the folks who will charge only 5% for B2W (what is called making an entry). It is simply impossible - from whatever I've seen, the rate goes from 8% for regular large scale customers to 12/15% for normal folks. Do not ask me how I know - I do not have any black money or illegal sources of income. However, we were stuck with a bunch of money for our land and the buyer ended up giving 10% extra for the black portion due to the conversion rates we had agreed upon. I'd insisted on all while while family members didn't care because they could manage. One of my neighbours is a well known Dr in our locality and has been ranting incessantly on the whatsapp group! It is indeed inconvenient for him since almost all of his business is cash only. And God knows how much of that is really reported and accounted for.


There are known people who do it for 5%, but 10% is the usual rate, I havent heard 15%, atleast here in Gods own country.

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Re: Currency Demonitisation and Future course of Indian Economy

Postby Suraj » 10 Nov 2016 11:21

alexis wrote:People depositing money in banks will not "recapitalize" banks! Please understand that.

Your deposits are a liability to the bank. This will force the banks to deploy this additional funds but looking at the state of the economy, it will be difficult. So interest rates will drop - good for a lot of people.

Not all of it . There's a substantial built in amount GoI is going to skin off as the penalty, and a large number of high value depositors are going to get hit with 100s or 1000s of crores penalty if the quoted claims of volume of BM cash are any indicator . That's not a deposit with a corresponding withdrawal liability and just additional capital base GoI deposits back in the banking system .

The rest while technically a liability on their books, are such large sums that they're not feasible to withdraw, and will remain as generally sticky deposits accruing interest and being deployed as loans .

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Re: Currency Demonitisation and Future course of Indian Economy

Postby putnanja » 10 Nov 2016 11:29

sudarshan wrote:
JohnTitor wrote:I'm not sure but I believe that the railways are allowed to book tickets with the old notes for a few days/weeks


Yup, and people will book anonymously, I'm sure :P. You still need to give your name, address, etc. right? You give a false name and address, how do you cancel and get your money back?


You book with your actual name/family/relatives, and when you cancel it, you get back money in new currency that you can still keep at home. Railways doesnt take PAN number when you book tickets.

This move will make people scared to stash cash at home going forward,! Hopefully it will scare them into keeping it white after paying taxes


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