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pankajs wrote:News18 ✔ @CNNnews18
#UPDATE: Banks are refusing to exchange notes without ID Proof #IndiaFightsCorruption LIVE: http://www.news18.com/news/india/demone ... 10412.html …
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I was under the impression that for up to 2000 it wouldn't ask for ID proof.
One with big cash and influence could have simply made 00s or 000s of people run around in various banks/branches in a city to convert 2000 each multiple times for till 30th Dec for some commission and could have recovered a large chunk of his BM.
1000 persons converting 10x2000 everyday for 50days = 100,00,00,000
A big politician could easily mobilise cadre to get 1000s of Cr of cash in such manner for some commission.
So the ID.
Just saying..
I don't think they have the resources to upload IDs of everyone who comes with Rs 4000 to a central server, which in turn will munch through the data to identify same names and calculate the total they have exchanged.
The scenario you mention is plausible, but I would say at most it would be around 100-200 people, because its not just anyone but loyal cadre who won't take the money and run. After considering around 200-300 for TA and around 300-400 per day to the person, they will take around 25-30% hit but will recover around 70% of their money.
While I agree on the maths in theory but one must consider the logistics too. One or a carder of such persons will not be the only one in the bank and the bank has a limited throughput.
And it may work for some crorepati but how will it scale for all the unaccounted wealth?
Lets do the math. If the parallel economy is 50% (WSJ estimate) of the formal that amounts to roughly 1 Trillion dollars. If the cash part is 10% that means about 100 billion dollars worth of cash has to be cycled. Is that possible in a Rs 2000 bits in 50 days?
While that may be possible for some folks does such methods (Zaveri Bazar, et el) have the bandwidth to recycle 100 billion dollar worth of cash in 50 days?
Even then folks who do get such deals are already facing a 40% indirect tax. Next time they will pay the tax to GOI and live in peace.
kvraghav wrote:Will the JDY account holders loose their BPL status if they deposit 1lakh?
I think, this is exactly what will come out in few days to discourage JDY accounts from depositing black money.
They will have to evaluate one time benefit of some commission against life long pain of no BPL benefits, no subsidy of most kinds, future surprise of no reservation for creamy layer etc etc. Possibilities are endless.
Modi ji asked for people to voluntarily give-up LPG subsidy. LPG subsidy would soon be targeted. Real estate as well.
Interesting times. GOI will keep on releasing some information / intent everyday for next few weeks.
Game has just started. Underestimate Modi ji at own risk.
pankajs wrote:While that may be possible for some folks does such methods (Zaveri Bazar, et el) have the bandwidth to recycle 100 billion dollar worth of cash in 50 days?
Even then folks who do get such deals are already facing a 40% indirect tax. Next time they will pay the tax to GOI and live in peace.
Zaveri bazaar might have that capacity but if Zaveri Bazaar plays hardball there could be something in offing - like gold control act, this govt must have thought about that.
From above article:
“Nothing has changed since yesterday. The acceptance of Rs. 500/1,000 currencies continues, which we would deposit in the bank for their replacement with new ones,” said a jeweller in Zaveri Bazaar, on condition of anonymity.
This sums it all. These jewelers are taking people for a ride. They are doing it upto limit, which they can manage to show as white money. Many people are not able to understand what has hit them, and are buying in panic at premium rates.
Last edited by aakashrj on 10 Nov 2016 13:54, edited 1 time in total.
Yayavar wrote:so jet-li, the eternal brf bugbear, did something good
The fact that modi trusted jetli to do this tells us their relationship and trust.
Jetli is liaison with press. By definition, he will be friendly with press, even those hostile to NM. I don't fault him for that.
iirc jaitley was by modi's side for legal advice during 2002 and later years when the congress/isi/rajdeep+thapar were tormenting him with cooked up theories and planted stories. they are super close with 100% trust.
The Centre is likely to unveil more steps to control the black money menace , including restrictions on the use of cash for high-value transactions, a top official has said.
Taking measures to control the menace is a continuous process and the government is taking different measures at different times, Revenue Secretary Hashmukh Adhia was quoted as saying by ‘The Times of India’.
He said that more such measures are expected to come, when asked by the paper whether the government will come out with restrictions on cash deposits of over Rs 3 lakh. The special investigation team ,which was appointed by the Supreme Court had suggested that curbs be imposed on cash deposits of over Rs 3 lakh. The main aim of the limit is to ensure that transactions are made using credit or debit cards, cheques or drafts which can be tracked.
The government decided the move at the highest level for a number of reasons, even though other options were also discussed, it was the best the prime minister felt. It was also because of the travel plan since he is travelling to Japan from Thursday, Hashmukh Adhia added.
The revenue secretary further said that the government had taken several steps including setting up an SIT, accepting some of its suggestions, Income Declaration Scheme, among others.
He also added that a number of people pay taxes is low and even those who pay, prefer to pay less than the actual.
Tax authorities will not immediately as questions on cash deposits that people make now, he said.
Hmm.. looks lime query on Co.Op banks are partially answered.. Demonetisation: RBI permits District Cooperative banks to accept old notes......
In the Malayalam edition of the same news paper, there is a report that Tax officials are at every Co.Op bank inspecting their book of accounts etc. So looks like they are taking stock "AS IS" position, and can then figure out the "TO BE" position at the end of all this. The news also says that Co.Op banks can take 500,1000 as deposit, but never do an exchange (with old notes). Deposits can only be made by people who hold accounts there.
Schmidt wrote:If there is a significant drop in property valuations ( 30-40% ) , will banks require a top up in the security amount paid to cover the gap i mortgage loans extended
Banks will only lend on the white portion of a house purchase, which is the registered value. Any drop in property prices is going to be in the black portion only and no bank has extended credit for that part. There is very little chance that property prices will fall below even the registered values (and anyway banks lend only like 80% of that).
Sachin wrote:Hmm.. looks lime query on Co.Op banks are partially answered.. Demonetisation: RBI permits District Cooperative banks to accept old notes......
In the Malayalam edition of the same news paper, there is a report that Tax officials are at every Co.Op bank inspecting their book of accounts etc. So looks like they are taking stock "AS IS" position, and can then figure out the "TO BE" position at the end of all this. The news also says that Co.Op banks can take 500,1000 as deposit, but never do an exchange (with old notes). Deposits can only be made by people who hold accounts there.
This is a trap, Co - op banks have been in the sights for a while. There is a rush to deposit money, once deposited it is in the books forever. Therefore they are in cross-hair. People I know are waiting to take their existing money out of Co-op Banks, they know what is coming in the next one year. All of them are looking for Gold and Foreign currency, some are even ready to barter land for money paid abroad.
The other point of discussion was the political fallout of the move on the BJP, which has traditionally enjoyed the support of affluent traders. The opinion, however, was divided as some traders hailed the drive as a "bold move" even if it resulted in "some losses".
...
Wow, even some traders saying its good move even if they had losses?
Why not? Everybody was playing the tax evasion game because that was the only game in town. Some people may just want to sleep well at night, and a few of them may even believe in paying their fair share to the government. But if you are the only one doing so, you will be ridiculed by the community and harassed by the taxman who instinctively assumes that everyone in so-and-so industry understates by 80%.
It's not enjoyable haggling over auto fares or tax rates. Sometimes it's better to pay by the meter or by whatever the computer totals your turnover to be, and spend your hours growing your business, tending to the garden or playing with your grandchildren...
Sridhar K wrote:One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.
Why would an aam abdul draw attention to himself to bail out his boss? Defies logic. But stranger things happen.
pankajs wrote:While that may be possible for some folks does such methods (Zaveri Bazar, et el) have the bandwidth to recycle 100 billion dollar worth of cash in 50 days?
Even then folks who do get such deals are already facing a 40% indirect tax. Next time they will pay the tax to GOI and live in peace.
All the gold consumed in India in one year is about $35 billion. Even if it is at a 100% premium it won't hit 100 billion. And Zaveri bazaar covers only one part of India.
putnanja wrote:
I don't think they have the resources to upload IDs of everyone who comes with Rs 4000 to a central server, which in turn will munch through the data to identify same names and calculate the total they have exchanged.
It will happen, but it will be done offline. 1.2 billion records or even 10 billion records can sit in a database on a laptop, no big deal.
But for good reasons folks won't be targeted unless they are in the top few percent. Aggregate deposits of a couple of lakhs or below will not be investigated. For one, there just isn't enough manpower in the IT department to go after say 10% of the population, and for two, this is a democracy after all and pissing a lot of people off isn't a good idea. As someone has said, if say 10% of the population is actually able to profit from this exercise by being benami channels they might end up supporting Modi (even if they hadn't in the past).
NM is not "close" to anyone including with Jetlee.
Even here in Mumbai, people are offering 400 for 500 note. But no takers. I also have 5k notes and waiting for the time to visit the bank. Rush in the banks will be over this weekend and once ATMs start working for mango people there will be little problem. I think both Mamata and Behanji will be hard hit. JJ can not deal with this problem from the hospital bed so that she will lose big time. TDP gangs and Jagan will suffer but may find ways to beat the system to some extent.
I think some 25% to 35% loss to the looters of medium size like business men who deal with cash to evade income tax. But it is the Large looters like politicos, builders, Eng college etc. mafia type fellows in AP who will be a big problem. Now one Tula gold in 50k in Mumbai if the people are paying in 500 and 1000. 20% is the commission otherwise.
I am expecting significant level IT raids in the next week or so with big publicity all around. That will severely dampen the private exchange activity.
Personally, since I am a servant of big money bags I was asked to come to the bank at a specific time designated for staff to exchange by 5k worth notes. I have only that much.
By now everyone I know who had sub crore stack have already "managed" their money. Anyone more than 2-3 cr are paying upto 50% to get it managed. Terms of which is that the money is lent in 'good faith' in full and the borrower will return 50% of it anytime after two months. Apparently very iffy.
Everyone more than 5-8 cr I know are simply taking a chill pill and left it onto bhagvan
And everyone with less than 10K are sweating in a queue outside the bank anxiously to get his "black money" legalized
Yours truly has received 5 calls from SHQ to get our huge stash of 6000 rupees to be deposited
Last edited by kapilrdave on 10 Nov 2016 15:10, edited 1 time in total.
JayS wrote:
One with big cash and influence could have simply made 00s or 000s of people run around in various banks/branches in a city to convert 2000 each multiple times for till 30th Dec for some commission and could have recovered a large chunk of his BM.
1000 persons converting 10x2000 everyday for 50days = 100,00,00,000
A big politician could easily mobilise cadre to get 1000s of Cr of cash in such manner for some commission.
So the ID.
Just saying..
I don't think they have the resources to upload IDs of everyone who comes with Rs 4000 to a central server, which in turn will munch through the data to identify same names and calculate the total they have exchanged.
The scenario you mention is plausible, but I would say at most it would be around 100-200 people, because its not just anyone but loyal cadre who won't take the money and run. After considering around 200-300 for TA and around 300-400 per day to the person, they will take around 25-30% hit but will recover around 70% of their money.
Are we sure GOI does not have the infra developed meanwhile to crunch the info?? And they can do it later next taking their own sweet time. Modi has had 2yrs to prepare for this moment. Some of his other steps are in the same direction - developing digital economy. Highly likely that the infra is being set-up do handle it. Plus for many even the fear of this possibility is enough deterrence.
Rishi Verma wrote: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)
Its not a rumour, its true. Just take the note, soak it in a mixture of flour, coke and vinegar, leave overnight and you will see that the camera stops working. Haven't checked out the GPS thing yet.
If big number of poor people started depositing Rs. 2 lakhs in same branch or same village, it will raises red flags. When dust settles (IT dept has 7 years to prosecute) they can hold a few poor and get statements from them who laundered the money. Then it will be double or triple whammy for big sharks. Then, not only IT, but they have to face ED wrath (unbailable cases in some extents). I think big brains have factored these probabilities, and have rewritten code to raise red flags for such scenarios.
As rahulm already said, the leakages will be very very minuscule. At best Rs. 10-50 lakhs can laundered with good friends/employees/acquaintance network, above that very risky proposition as Suraj saar said above using cheese analogy. Even for that paltry amounts, they subjects themselves to future ridicules, snide comments, and loss of respect, and they too know and many will dare not foot into the mud, unless they are brazen type.
rahulm: Using cute jugaadu schemes like rail tickets, bonuses, pay hikes etc can only save rats and mice. Probably, not even a rounding error in the scheme of things where the total size of the parallel economy is estimated to be upto half of th formal economy.
kapilrdave wrote:By now everyone I know who had sub crore stack have already "managed" their money. Anyone more than 2-3 cr are paying upto 50% to get it managed. Terms of which is that the money is lent in 'good faith' in full and the borrower will return 50% of it anytime after two months. Apparently very iffy.
Everyone more than 5-8 cr I know are simply taking a chill pill and left it onto bhagvan
Same question to you that I had asked another poster. If you know such people why you don't report it? A simple twit to PMO will allow you to serve the country.
kapilrdave wrote:By now everyone I know who had sub crore stack have already "managed" their money. Anyone more than 2-3 cr are paying upto 50% to get it managed. Terms of which is that the money is lent in 'good faith' in full and the borrower will return 50% of it anytime after two months. Apparently very iffy.
Everyone more than 5-8 cr I know are simply taking a chill pill and left it onto bhagvan
Same question to you that I had asked another poster. If you know such people why you don't report it? A simple twit to PMO will allow you to serve the country.
Fair question. But thing is that you always have some rough idea about these people but you don't know the exact things. It's just now that they are coming out naked.
yensoy wrote:
Banks will only lend on the white portion of a house purchase, which is the registered value. Any drop in property prices is going to be in the black portion only and no bank has extended credit for that part. There is very little chance that property prices will fall below even the registered values (and anyway banks lend only like 80% of that).
You have to give our banks more credit than that
I don't think this is true. I know of big banks that lend on both portions. They issue two cheques when the property is to be registered. One is the white portion, the other black
Last edited by JohnTitor on 10 Nov 2016 15:31, edited 1 time in total.
there is some news about VAT being used to siphon 500 and 1000.... how does it happen? i dont buy this 2 to 2.5 L being treated as normal for cash deposit. if a person earns say 10L per years can he rightfully have 2.5L as cash at home?? this is a red herring.. IMHO. People will be caught.. what does it take to issue a notice.. based on a simple calculation ...if income X and cash deposited 0.2X then issue notice..simple logic i think.
The credibility of this paper is below underground so normally no-one would take them seriously. Rumormongering is their trademark. But this report is something special in this context...
The interesting part is that this paper had reported the demonetization of the big notes far earlier this year. Guess which was the date? 1st April!
The credibility of this paper is below underground so normally no-one would take them seriously. Rumormongering is their trademark. But this report is something special in this context...
The interesting part is that this paper had reported the demonetization of the big notes far earlier this year. Guess which was the date? 1st April!
Prime Minister Narendra Modi’s biggest move to fight tax evasion and graft can add $45 billion to India’s budget, or about three times the size of Iceland’s economy. Mumbai-based brokerage Edelweiss Securities Ltd. predicts the government’s surprise crack down on high-value currency notes will uncover 3 trillion rupees ($45 billion) in black money, which is cash that’s stashed away to avoid tax. ICICI Securities Primary Dealership Ltd. is even more optimistic, pegging the figure at as much as 4.6 trillion rupees.
Economists are scrambling to calculate potential gains from Modi’s late Tuesday decision to ban 500 and 1,000 rupee ($15) notes as legal tender. The move will suck out about 86 percent of the 17.8 trillion rupees of currency in circulation. The analysts say as much as a third of this will prove to be illegal and be unclaimed. Those funds can then be used by the government to narrow Asia’s widest fiscal deficit.
“This money can now get utilized for various economic reforms’ funding,” said Edelweiss analyst Manoj Bahety. The central bank can reduce its liabilities by an equivalent amount or share the cash with the government, he said.
Here’s what the funds could offer Modi:
The chance to slash by more than half his projected 5.3 trillion rupee budget deficit for the year through March 2017 The opportunity to double expenditure on defense and energy Or increase three-fold federal spending on social services such as education, health and housing
“As investments drive up the supply capacity of the economy, overall gross domestic product growth is expected to benefit in the long term,” economists including Dharmakirti Joshi at Crisil Ltd., the Indian unit of S&P Global Inc., wrote in a report on Wednesday. “In the short-term, GDP growth may get impacted negatively as the cash based economy feels a crunch and consumption and investment moderates.”
Among sectors that will be squeezed are real estate, jewelry and cement, they predict. Shares of DLF Ltd., India’s biggest listed developer, plunged the most in two years on Wednesday; jeweler Tribhovandas Bhimji Zaveri Ltd. tumbled the most on record; and Ambuja Cements Ltd. fell the most in a year.
However, less cash in the hands of consumers could also drive down prices of key goods, helping control one of Asia’s fastest inflation rates. Citizens will have until the end of 2016 to exchange their now useless currency for newly printed 500 and 2,000 rupee notes. Each person can exchange as much as 4,000 rupees for cash while higher amounts will have to be deposited in their bank accounts.
All deposits of more than 250,000 made between Nov. 10 and Dec. 30 would be flagged to India’s income tax office, which will match details with declared income. Any discrepancies would be treated as tax evasion and the tax amount plus a penalty of 200 percent of tax payable would be levied, Revenue Secretary Hasmukh Adhia told reporters on Wednesday.
Lower Borrowing Costs
“The good news here is that there could be a considerable drop in interest rates over the course of the next three to six months,” S. Naren, executive director and chief investment officer at ICICI Prudential Asset Management Co., India’s biggest money manager with $29 billion in assets, said in an e-mail response. “This would mean that many of the projects which were unviable could become viable as the interest rate subsides. Therefore, over the next three years, we expect a boom in the Indian economy backed by capital expenditure cycle, starting 2018.”
The risk is that this “war on cash” may make households and businesses averse to spending, rendering lower interest rates ineffective, said Prasanna A. and Abhishek Upadhyay, economists at ICICI Securities.
“The move will be seen as a war on the parallel economy, corruption and money laundering,” they wrote in a report on Wednesday. “Along with the introduction of the goods and services tax, this constitutes a far reaching reset of the Indian
JohnTitor wrote:I still don't understand why the 2k note.
Increasing denominations are a problem, not today but a year or two from more.
I wish we could have 100 as the highest denomination and everything that needs more be done digitally.
Jab 2000 ki note milegi tab stock karoge na?
Govt will print it in very less numbers. For example, no bank is giving 2K notes as exchange today.
I think the 2K note is to manage the first few weeks of currency demand. Here in Coimbatore, I went to one private bank early in the morning and deposited my old notes and requested withdrawal of 10K from my existing balance. They literally pleaded with me to come back tomorrow as they did not get enough currency to support demand. I told them I was in the same situ and was down to my last 100rupees. They then gave me 5x 2K notes and said that this is the only currency they have. I then went to a PSU bank and they were better off but they still had issues filling the demand for 100notes. So they gave me 100x 50, 2x 2K and 10x 100.
The 2K note is easier to handle the initial surge as panicked public tries to exchange old notes. I think it will be slowly withdrawn through regular mechanisms.
On another note....public were very civil at all banks here and were even willing to accommodate old/disabled people jumping into lines even though the crowd was good. They all wanted a glimpse of the new 2K note and one guy even took a video of moi holding my note. They were very cheerful and the excitement at something good happening was quite palpable. The bank staff were also very courteous even with the huge strain on their resources. I think even the cats on the wall have started slowly understanding what NaMo is all about.
And they can do it later next taking their own sweet time. Modi has had 2yrs to prepare for this moment. Some of his other steps are in the same direction - developing digital economy. Highly likely that the infra is being set-up do handle it. Plus for many even the fear of this possibility is enough deterrence. 
.