Currency Demonetisation and Future course of Indian Economy

Suraj · Post by **Suraj** » 27 Nov 2016 07:13

disha wrote:At this stage., shourya'ji - you have to point out the steps how 'current BM' is being converted into foreign exchange. Unless that point, your statement is invalid.

Practically everyone making this kind of argument does not bother to think through the basic problem of why would anyone exchange something useful they have (gold/land/dollars/whatever) for something useless (old 500/1000 notes) you have. WAY too much mental bandwidth is being wasted on describing cool new hacks, without really understanding that it cannot be scaled beyond a few thousand. There's 500/1000 notes that used to be worth about $140 billion worth until Nov 8, still out there. Let's pretend someone actually has $140 billion (about a third of our forex reserves) lying about in the safe in his office. Now we need to pretend he'll hand that over for toilet paper he now needs to take to the bank and deposit it. And then have nice believable answers when they ask 'oh where did you get the notes ? And where did you get the $140 billion then ?'

This fails on so many levels, I'm surprised people still peddle these stories. There are not even 0.5% of that many dollars in open circulation in India. Those who supposedly have it abroad cannot bring it back (hawala is dead). And no one who supposedly sits on so much actual wealth is giving it away for toilet paper *and* take on the headache of depositing it without being noticed. That's like someone handing over their wallet and account passwords to someone who has 'CBI' written on a piece of cardboard with a sketchpen claiming it's their business card, needing to 'investigate a crime'.

ShauryaT · Post by **ShauryaT** » 27 Nov 2016 07:32

disha wrote: So again., just because my friends-friends-fourth cousin-72 times removed states that the 'current BM' is being converted into foreign currency - it does not mean it is being done so. The cause of the fall in rupee value needs to be looked somewhere else. Just because we have a data point and a theory., we cannot use confirmation bias to fit that data point to the theory.

At this stage., shourya'ji - you have to point out the steps how 'current BM' is being converted into foreign exchange. Unless that point, your statement is invalid.

Disha: With due respect, was not born yesterday to believe in stories. You can believe what you want. You can also believe that this is hearsay and has no truth to it. It is being done is a fact for me and I have no reason to question and that is where the matter rests. How they are doing it and its modus operandi is also clear to me. You can ask people you trust or know. It entails all the risks that Suraj lists. I will end this part here.

ShauryaT · Post by **ShauryaT** » 27 Nov 2016 07:35

shiv wrote:
ShauryaT wrote:Your money in your bank is your property. It is with the bank for safe keeping, for which a bank may charge you a fee.
In India your money in a savings account earns a minimum of 4% per annum in interest and you don't pay the bank anything. In other words your deposit is a loan to the bank with a promise that you can take the money out at any time subject to a minimum balance. I am not sure of the legal differences between a simple deposit where the bank charges you for safekeeping (like a bank locker) versus a savings account such as the one I have described.

The highlighted part explains, why they do not charge for that type of an account. I used the operative word "may". Ex: A current account which does not meet some minimum requirements would get charged. A bank's revenue is from services offered and financing activities. The MBA types can tell you where does this balance fit in to offset one type of revenue for the other and waive some fees.

hanumadu · Post by **hanumadu** » 27 Nov 2016 07:37

There is a video of a congress leader getting thrashed by public for opposing demonetisation. Not sure if it is true.

https://twitter.com/YesIamSaffron/statu ... 9574222848

rahulm · Post by **rahulm** » 27 Nov 2016 07:39

I would be very surprised if Goa does go majorly cashless in December. What is more plausible is there will.be a new cashless way to,transact in addition to cash. I, however, don't see this succeeding in any significant measure particularly at the petty end - the veggie and fish vendors.

Like water that takes the path of least resistance when multiple,channels are available - given multiple transaction options our society goes towards cash as the first preference. While the current demonetisation should move large transactions to formal channels, I actually don't see this happening at the small end of business, particularly in villages and certainly not my foul mouthed fish lady and her entire ilk. I, do hope, I am wrong.

People are willing to provide credit than move to cashless ! It takes a lot for a trader to agree to credit terms

I don't have numbers but based on personal experience is card acceptance in shops and usage by customers is low; this, despite 3 x the local population in tourist foot traffic.

In Goan villages, and Goa is really a collection of developed villages, people's love for cash is everywhere. Cash transactions rule. In fact, in my Goan village which has a very popular beach, there is not 1, establishment of any sort and size that accepts any kind of debit or credit card. I found one beach shack which accepts NEFT.

At the retail,level, Goa is a cash economy like any other Indian city. The difference, is, Goa has the potential to be setup and transformed into a role model due to its size and prosperity if the government wishes to do so. Right, now, it is struggling with garbage - the government hasn't been able to find a solution to the litter that is visible everywhere including on the beaches.

I have been flashing my cards and payTM in all manner of shops - from cement dealers to fruit vendors to bemused looks and titters.

Given the starting baseline above, I find the newspaper report an admirable and worthy aspiration but am afraid the timelines mentioned are hot air.

Suraj · Post by **Suraj** » 27 Nov 2016 07:58

ShauryaT wrote:Disha: With due respect, was not born yesterday to believe in stories. You can believe what you want. You can also believe that this is hearsay and has no truth to it. It is being done is a fact for me and I have no reason to question and that is where the matter rests. How they are doing it and its modus operandi is also clear to me. You can ask people you trust or know. It entails all the risks that Suraj lists. I will end this part here.

Sorry, this is not an acceptable response at all. The one word definition of what you're doing is trolling. You're posting an incendiary statement, and then asking others to believe it when an entire chain of absurd assumptions it entails, is pointed out to you. Please desist from posting such 'I heard from chaiwalla' nonsense. At the very least you should be able to analyze the matter yourself when others make the effort to do so. Seeing that you don't do that, you shouldn't post such things.

ShauryaT · Post by **ShauryaT** » 27 Nov 2016 08:06

OK Suraj, you can believe your own self determined logic to its own analytical conclusion. Someone with a contra experience is trolling for you. Not going to detail how illegal acts take place. Hence ending it.

chandrasekaran · Post by **chandrasekaran** » 27 Nov 2016 08:13

ShauryaT wrote:ot going to detail how illegal acts take place. Hence ending it.

You may not want to detail it here, but please report the details to the authorities. You owe this country at least this much.

shiv · Post by **shiv** » 27 Nov 2016 08:20

I must repeat that the period Nov 9th to Dec 31st is the very last chance for people to legitimize black money with little penalty The govt has made it inconvenient to do that by all sorts of tricks that are so unfair to black cash hoarders.

First it was exchange only 4500 per day. then it was only 2000 per day. Then ink. But the government has left the route open for other people's accounts to be used. This is not a safe bet but it is definitely one route available if one has access to say even 10 bank accounts of relatives/female relatives or more accounts of other people who can be coerced or bribed.

So this actually offers a route for racketeers with foreign exchange in hand. If say US$ can be sold at Rs 100 per dollar in exchange for old currency, that money can theoretically be converted to white until 31st December. Ultimately the total volume of conversion cannot be very high. Like stock market day trading a man with US$ 10,000 which would probably get him 6.7 lakh normally can make 10 lakhs and place it in the accounts of 4 - 6 relatives. Not bad for 50 days work. But it is of no use for a person who has exchange hundreds of crores of Rupees in cash.

disha · Post by **disha** » 27 Nov 2016 08:22

Suraj wrote:WAY too much mental bandwidth is being wasted on describing cool new hacks, without really understanding that it cannot be scaled beyond a few thousand.

The only reason I read the "cool new hack" is to understand the hack and hack it to see the flaws it has or uncovered flaws in existing flows. Other than that mental calisthenics., any statement that sounds "I know and my friends know a cool hack but cannot reveal it to you unless I kill you" is a just a claptrap.

This fails on so many levels, I'm surprised people still peddle these stories. There are not even 0.5% of that many dollars in open circulation in India. Those who supposedly have it abroad cannot bring it back (hawala is dead). And no one who supposedly sits on so much actual wealth is giving it away for toilet paper *and* take on the headache of depositing it without being noticed.

Exactly! Why would somebody sitting pretty in developed countries want to paint a very large target on their backs? In US., any movement above $1k (one thousand dollars) is immediately watched. Try to do a wire transfer of over $1k to any account in India and see the questions. Yes there is unaccounted money within US and yes it gets laundered and yes the favorite destination is either the carribean or macau. But those dollars are too precious to NOT be transacted for DEMONETIZED currency! Nobody will want to deal in de-monetized currency. As a reverse logic., would anyone trade in Rs. 60,000 of INR in Rs. 2k currency for the demonetized $1k USD to finance a trip to US? - unless of course you want to keep a single one as piece of history. Then you can as well get it from an auction sale.

I think people still peddle these stories because they have a belief system and they want to fit any and all data points that fit to that belief system. If I want to believe that DeMonetization has failed and the 'current BM' holder are going to get away with their 'settings'., then of course all data points that I see will confirm to that belief system. Just like since all media wanted to hear that HRC will win., all data points indicated that HRC will win. In psychology, it is called confirmation bias.

disha · Post by **disha** » 27 Nov 2016 08:24

ShauryaT wrote:It is being done is a fact for me and I have no reason to question and that is where the matter rests. How they are doing it and its modus operandi is also clear to me.

My last point on this: if you know the modus operandi., please put it in steps here. Otherwise it is just a musharraf guarantee of 400% genuine only.

Paul · Post by **Paul** » 27 Nov 2016 08:33

When I opened my PO account in 2015 they did not ask for my PAN card but look for Adhar card. Now they are asking for PAN card for anyone who wants to open their account in the Post office. Further more last I checked interest rates for FDs opened in PO are not reported to Income tax department.

If someone has deposited old currency in the PO please do relate your experiences there. TIA!

disha · Post by **disha** » 27 Nov 2016 08:37

shiv wrote: So this actually offers a route for racketeers with foreign exchange in hand. If say US$ can be sold at Rs 100 per dollar in exchange for old currency, that money can theoretically be converted to white until 31st December. Ultimately the total volume of conversion cannot be very high. Like stock market day trading a man with US$ 10,000 which would probably get him 6.7 lakh normally can make 10 lakhs and place it in the accounts of 4 - 6 relatives. Not bad for 50 days work. But it is of no use for a person who has exchange hundreds of crores of Rupees in cash.

Gurumurthy himself has stated that there will be some 10% leak in the implementation leading to laundered money coming back in the system. Assuming that out of 14 lakh crore., 1.4 lakh crore will be laundered back. Guess what., this actually converts the Indian money in black into white, but converts the USD from white to black or retains the USD in black (depends upon the source of the USD).

habal · Post by **habal** » 27 Nov 2016 08:53

parashara wrote:
Suraj wrote: Sure liabilities can't be written off. So what liability exists on cash that was never deposited again, exactly ?
An example to illustrate this is: Assume a guy was in a coma from 1 Jan 2016 to 31 Dec 2017. He wakes up to find that his stash of old notes is no longer legal tender and not acceptable at any bank in the land. He can, however, show up at an RBI office, present his notes and ask to be compensated via deposit, exchange or in gold. The RBI cannot turn around and say that while he was in a coma, the value equivalent of his stash was transferred as dividend to the GoI and as such has evaporated.

When he submits his hospital records. RBI will change his notes.

these are exceptional cases.

Prasad · Post by **Prasad** » 27 Nov 2016 08:56

Couple of points - ink has had a non negligible effect on lines. Tons of bank employee relatives have reported drastic reduction in lines after inking started. No more using four IDs to circumvent exchange limits.
Bank apps, even that *99# mobile thingie are English based. Afaik only Paytm has introduced Indian language support so far. Any half decent ux fellow would barf all over some of the bank apps. Pockets seems to be decent. There are tons of state language medium educated people in our country with rudimentary English lavished skills if any. Pushing them towards using English based apps is downright dangerous given how much security education is required to use cashless instruments. We have to educate and push. No other go.

Suraj · Post by **Suraj** » 27 Nov 2016 09:25

parashara wrote:According to this guy - a genuine currency note with an undertaking from any current/past governors of the RBI is a liability even if it never comes back to the RBI. This, according to him, is primarily because a currency note has no expiry date and is hence legally a contract (to pay) in force forever.

Why don't you just let 'this guy' speak for himself by joining here ? What you're saying makes no sense at all. You're claiming that RBI generates unlimited liability upon itself, i.e. every last currency note ever printed remains a liability on its books. Sorry, that's not how it works. Your friend's wrong. If he can't join here, please go tell him that. No need to do this whole 'but he says'...

parashara wrote:An example to illustrate this is: Assume a guy was in a coma from 1 Jan 2016 to 31 Dec 2017. He wakes up to find that his stash of old notes is no longer legal tender and not acceptable at any bank in the land. He can, however, show up at an RBI office, present his notes and ask to be compensated via deposit, exchange or in gold. The RBI cannot turn around and say that while he was in a coma, the value equivalent of his stash was transferred as dividend to the GoI and as such has evaporated.

This is the rub.

Once he's awake from his long coma, IT man will ask him, "sir, now that you're feeling ok, tell us about this huge stash of notes you have. Please show us all your prior IT records. No rush. Please don't go into coma again from the shock of having to cough up all this information."

GoI will be happy to take its 60% tax/penalty (or whatever the new amendment to the IT Act enables them to extract) and let him keep the rest. That 60% is revenue to the government.

Your example does nothing to change the original argument. Anyone who comes forward with cash pays a penalty on unaccounted for wealth. Doesn't matter if he was in coma/kidnapped/whatever...

shiv · Post by **shiv** » 27 Nov 2016 09:28

disha wrote:Guess what., this actually converts the Indian money in black into white, but converts the USD from white to black or retains the USD in black (depends upon the source of the USD).

The fellow holding USD is getting rid of them - in fact he may have bought them in black anyway. The guy buying them is getting rid of some black Rupees and holding legitimate currency. The dollar salesman takes the risk and makes a profit. But this is all small change/chillar

Kakkaji · Post by **Kakkaji** » 27 Nov 2016 09:43

Fillip for bank cash

Mumbai, Nov. 26: The Reserve Bank has introduced an incremental cash reserve ratio (CRR) of 100 per cent for the fortnight beginning today to absorb the surge in liquidity in the banking system following demonetisation of high-value notes.

The CRR, which is now 4 per cent, is a portion of deposits that banks are required to park with the RBI.

According to the RBI guidelines, "On the increase in net demand and time liabilities between September 16 and November 11, scheduled banks shall maintain an incremental CRR of 100 per cent, effective fortnight beginning November 26, 2016."

Estimates show that this could be Rs 3.5 lakh crore.

The apex bank said it would review the decision on December 9, or earlier, as the incremental CRR was intended to be a temporary measure within its liquidity management framework to drain the excess liquidity.

The regular CRR would, however, continue to be at 4 per cent.

With the withdrawal of Rs 500 and Rs 1,000 bank notes beginning November 9, there has been a surge in deposits leading to large excess liquidity in the system.

The RBI also observed that the magnitude of surplus liquidity available with banks is expected to increase further in the fortnights ahead.

The central bank has separately revived the guarantee scheme to enable the deposit of Rs 500/1,000 balances at the RBI or at currency chests and get immediate value.

The notes will remain in the vaults of the Reserve Bank, under lock and key of the depositing banks till taken up for examination.

Can the ECON gurus explain what all this means?

Suraj · Post by **Suraj** » 27 Nov 2016 09:53

Cash reserve ratio is the minimum percentage of deposits banks must keep with the RBI, rather than lend out or use for their own business activities. Banks are flush with cash, absorbing $11-12 billion each day, which is like trying to drink water out of a fire hose. Incremental CRR of 100% means all new deposits are to be deposited with RBI, as opposed to kept on the banks' books. It's a temporary measure.

habal · Post by **habal** » 27 Nov 2016 10:00

my thinking is that this is to ensure banks do not cut interest rates further on excuse of heavy deposits. So excess liquidity is squeezed out of banks.

asgkhan · Post by **asgkhan** » 27 Nov 2016 10:09

Paul wrote:When I opened my PO account in 2015 they did not ask for my PAN card but look for Adhar card. Now they are asking for PAN card for anyone who wants to open their account in the Post office. Further more last I checked interest rates for FDs opened in PO are not reported to Income tax department.

If someone has deposited old currency in the PO please do relate your experiences there. TIA!

I deposited 1.5 lacs into my PPF a/c last week. Met the assistant over the counter and explained it was a large amount to deposit. I carried the following :

1. 1000 * 150 old denomination notes
2. My PPF passbook
3. My Pan card (xerox & original)
4. My Aadhar card (xerox & original)

The assistant counted the money, filled the details, did not bother asking me for 3 & 4.

So I got rid of all my old denominations.

naruto · Post by **naruto** » 27 Nov 2016 10:30

SHQ got the first 2000 note today. Paper quality is unlike the old ones. Did a pencil tracing using a tracing paper, it shows many features not usually visible.
Are we still procuring currency paper from foreign countries or is it made in India?

Yagnasri · Post by **Yagnasri** » 27 Nov 2016 11:09

Note paper is still being imported.

We need to start plastic, online mobile banking UPI type efforts shall be started asap and on war footing implemented. This shall be plan B. We are not sure how the deep state will mess up things as they have lot of time till December 39th.

kvraghav · Post by **kvraghav** » 27 Nov 2016 11:49

I think we should introduce cash transaction charges on bills greater than 20000 and that amount should go to RBI and also re introduce ATM charges. If merchant charges are for the banks work, RBI should also charge for printing notes.

Prasad · Post by **Prasad** » 27 Nov 2016 11:55

As we move towards more and more non cash means of transacting, we can afford plastic notes given lower number of total notes to be made. I'd love to see rupee notes that are as good some of the foreign currencies.

RajeshG · Post by **RajeshG** » 27 Nov 2016 12:04

Shaurya couple of good posts.

I think people are making wrong assumption that dollars in circulation will remain constant. I am sure people like dawood can pump in as many dollars as there is demand

Sachin · Post by **Sachin** » 27 Nov 2016 12:06

Was just reading through both vernacular and English news paper. At least in Karnataka every politician seems to be in full support of the demonetisation. And that includes Siddaramiah and even humble farmer

. It is when folks like these people support any move, that I get suspicious whether it would yield good results

.

RajeshG · Post by **RajeshG** » 27 Nov 2016 12:08

Disha

14 lac cr is total currency demonetised. Out of that about 9-10 is supposed to be legit

About 4-5 is black

Out of which 2-3 is supposed to be single black

And 1-2 is double black

RajeshG · Post by **RajeshG** » 27 Nov 2016 12:12

Regarding how undeposited money will show up in balance sheets i think the econ times article has the best imfo i have found so far. I think it had quotes fron rbi auditor as well. Suffice to say there still some legal issues that goi needs to addtrss.

Suraj · Post by **Suraj** » 27 Nov 2016 12:42

RajeshG wrote:Shaurya couple of good posts.

I think people are making wrong assumption that dollars in circulation will remain constant. I am sure people like dawood can pump in as many dollars as there is demand

Yes, Dawood will surely bring in $100 billion in dollars, so you can do business in dollars instead of untrustworthy Rupees. That'll fix all problems. Perhaps Dawood and Pablo Escobar will compete for the opportunity.

pankajs · Post by **pankajs** » 27 Nov 2016 12:44

RajeshG wrote:Shaurya couple of good posts.

I think people are making wrong assumption that dollars in circulation will remain constant. I am sure people like dawood can pump in as many dollars as there is demand

When RBI issues rupee it exchanges it for bond (Buys) and when GOI borrows rupee it issues bonds (Sells) in exchange. Issuing or borrowing rupee too is an barter/exchange and has to have two side. There is the basic rule of barter/exchange that has to be fulfilled. Even when fake currency is introduced it is in exchange of goods/service or real rupee.

1. For Dawood or anyone to pump dollars it has to exchange/barter it for something same as RBI or GOI or you or me. What will Dawood take in exchange? Old rupee? And how will Dawood get the old notes converted to white money? It is of no use inside or outside India and will be worthless after March 2017.
2. And when the dollar comes from outside something in exchange has to flow out. Will old notes/Gold/RE (is that even possible) start a reverse flow? Will a RE property suddenly relocate from Mumbai to Karachi? Assumption is that the dollar is coming from outside the country so something has to flow out in exchange.
3. With Hawala hit hard how much dollar can be pumped in.

Even assuming *sufficient* dollar flowing into India does not solve the problem for black money hoarders. Their black money is in old notes that is no more valid unless exchanged for new rupee. Person A exchange his BM hoard in old notes for dollar with Person B still does not make the BM white. ALL that has happened is that BM hoard in old notes has moved from Person A to Person B. It still has to pass through the banking system to become white. If Person B fails to get it recycled via a Bank it is still WORTHLESS. From the GOI pov NOTHING has changed after all this WORKAROUND.

This is not to say that some old note/dollar exchange is not possible on the margins. As an example, I have some dollars lying at home and have NO old notes to deposit so perhaps I can take old notes up to 2.5 Lakhs in exchange for dollars. How many folks in India can render that same service. Some companies/exporters may have a little dollar lying about but will be very careful to keep from inviting GOI scrutiny. Some Foreigners will do some exchange to get some extra buck in India. May be a corrupt Thomas Cook employee will cut a few side deals. But in total such exchange should be minuscule.

Just because something is possible in theory does not mean that it is probable or that is can be executed at any scale. Just because some old note to dollar exchange has occurred does not mean ALL black money is old notes can be exchanged like that.

Karan M · Post by **Karan M** » 27 Nov 2016 14:26

Suraj wrote:
ShauryaT wrote:A wrong assessment IMO. First, on the ground the BM conversion to foreign currency has increased since Nov 8.
Tell us, after Nov. 8, what is 'black money' ? After that you can explain how it gets converted to foreign currency.

forex dude who gets everyone their stuff noted cash crunch in forex market local because all our fatcats went and snapped up cash and even tc's. after that Goi stepped in and asked for proper receiptd and trails so hopefully things are better. this right after announcement. indians will game the system anywhichway..

JohnTitor · Post by **JohnTitor** » 27 Nov 2016 14:48

hanumadu wrote:There is a video of a congress leader getting thrashed by public for opposing demonetisation. Not sure if it is true.

https://twitter.com/YesIamSaffron/statu ... 9574222848

4h
Ashutosh Tryambak‏ @ashu_tryambak
@thakuradarsh11 Yes. It's from Bengal. TMC workers beating BJP leader. @YesIamSaffron

jamwal · Post by **jamwal** » 27 Nov 2016 14:56

In order to buy or sell foreign currency from currency exchange outlets (at least in big cities), you have to provide an identity proof, just like banks are doing. I don't know what kind of genius came up with the idea of converting black in to white this way. You can exchange a few lakhs, maybe 20-25 lakh at best if you are very very clever this way. Even then, dollars can't be spent inside India. They have to exchanged again for valid Indian currency or deposited to be of any use here. Hawala transfer is a different matter though.

There is hardly any foreign or local currency in this market and most such places are not doing any business for days now. Even I am stuck with a small amount of foreign currency. Can't find enough time to visit a bank or exchanger to deposit or exchange it.

Most of the foreigners are paying by cards and that's what they prefer anyway for majority of their spending in hotels, restaurants and bulk of shopping. It's the low level independent tour guides, touts, and small trinket sellers who are taking a hit.

Deans · Post by **Deans** » 27 Nov 2016 15:15

Yagnasri wrote:Normally in passport verification, they will not take any money even in Bangalore also. I have not given a single paise to the police, and they have not asked. I guess they also know whom to ask and whom not to ask.

We are on right track. All the international MSM saying that it is bad.

True. I got my police verification (Passport) done in Bangalore, as my previous passport was issued abroad. The cop visited within 3 days. He was polite and professional. Refused to take anything and even called a day later to say it was done.

parashara · Post by **parashara** » 27 Nov 2016 17:33

Suraj wrote: Why don't you just let 'this guy' speak for himself by joining here ? What you're saying makes no sense at all. You're claiming that RBI generates unlimited liability upon itself, i.e. every last currency note ever printed remains a liability on its books. Sorry, that's not how it works. Your friend's wrong. If he can't join here, please go tell him that. No need to do this whole 'but he says'...

I'll just ignore the innuendo above.

Suraj wrote: Once he's awake from his long coma, IT man will ask him, "sir, now that you're feeling ok, tell us about this huge stash of notes you have. Please show us all your prior IT records. No rush. Please don't go into coma again from the shock of having to cough up all this information."

GoI will be happy to take its 60% tax/penalty (or whatever the new amendment to the IT Act enables them to extract) and let him keep the rest. That 60% is revenue to the government.

Your example does nothing to change the original argument. Anyone who comes forward with cash pays a penalty on unaccounted for wealth. Doesn't matter if he was in coma/kidnapped/whatever...

Dude - you haven't even understood the question here. The issue has nothing to do with the tax man. The guy who wakes up from a coma may have a tiny stash of a hundred 1000 rupee notes. No tax deduction required. But the burning question is if the RBI will give him fifty of the new 2000 rupee notes in exchange for his pile or not. If the RBI has already xfer'red that 1L to the govt, they can't, correct?

Here is an article which implies that D Subbarao, the ex-governor of the RBI has the same uncertainty bugging him.
http://www.firstpost.com/india/demoneti ... 12516.html

You can offer an opinion without getting all aggravated.

Actually since you are forum moderator - you should be setting an example in this regard, no?

chetak · Post by **chetak** » 27 Nov 2016 17:51

Two-time PM, FM, RBI Governor, Economics from Cambridge - Manmohan Singh's legacy.

Manish_Sharma · Post by **Manish_Sharma** » 27 Nov 2016 18:08

ShauryaT wrote: It is being done is a fact for me and I have no reason to question and that is where the matter rests. How they are doing it and its modus operandi is also clear to me. You can ask people you trust or know. It entails all the risks that Suraj lists. I will end this part here.

Why don't you expose this "modus operandi" here on forum, and the culprits too? After all don't you think this "act" done by party known to you is very anti-Bharat?

Please expose them and their strategy here in interest of Bharatvarsh.

Karan M · Post by **Karan M** » 27 Nov 2016 18:12

jamwal wrote:In order to buy or sell foreign currency from currency exchange outlets (at least in big cities), you have to provide an identity proof, just like banks are doing. I don't know what kind of genius came up with the idea of converting black in to white this way. You can exchange a few lakhs, maybe 20-25 lakh at best if you are very very clever this way. Even then, dollars can't be spent inside India. They have to exchanged again for valid Indian currency or deposited to be of any use here. Hawala transfer is a different matter though.

There is hardly any foreign or local currency in this market and most such places are not doing any business for days now. Even I am stuck with a small amount of foreign currency. Can't find enough time to visit a bank or exchanger to deposit or exchange it.

Most of the foreigners are paying by cards and that's what they prefer anyway for majority of their spending in hotels, restaurants and bulk of shopping. It's the low level independent tour guides, touts, and small trinket sellers who are taking a hit.

I think it will be the usual catch anyone willing to show the "exchange" with a few fake copies of prebooked tickets (which can be cancelled) and give them a cut in return..the advantage i can see is the lopsided exchange rate @ 70-60 rupees, relatively large quantities can be laundered if you follow the painstaking procedure above ... or i wonder if they show foreign setup expenses and do something in mass quantities then... fairly certain some stuff like this happened.. but GOI cracked down asap. i heard this tale directly from a major indian bank's local rep.. so by next day morning PMO was aware.. after the night mann ki baat address happened ..

Karan M · Post by **Karan M** » 27 Nov 2016 18:20

parashara wrote:
Suraj wrote: Why don't you just let 'this guy' speak for himself by joining here ? What you're saying makes no sense at all. You're claiming that RBI generates unlimited liability upon itself, i.e. every last currency note ever printed remains a liability on its books. Sorry, that's not how it works. Your friend's wrong. If he can't join here, please go tell him that. No need to do this whole 'but he says'...
I'll just ignore the innuendo above.

Suraj wrote: Once he's awake from his long coma, IT man will ask him, "sir, now that you're feeling ok, tell us about this huge stash of notes you have. Please show us all your prior IT records. No rush. Please don't go into coma again from the shock of having to cough up all this information."

GoI will be happy to take its 60% tax/penalty (or whatever the new amendment to the IT Act enables them to extract) and let him keep the rest. That 60% is revenue to the government.

Your example does nothing to change the original argument. Anyone who comes forward with cash pays a penalty on unaccounted for wealth. Doesn't matter if he was in coma/kidnapped/whatever...
Dude - you haven't even understood the question here. The issue has nothing to do with the tax man. The guy who wakes up from a coma may have a tiny stash of a hundred 1000 rupee notes. No tax deduction required. But the burning question is if the RBI will give him fifty of the new 2000 rupee notes in exchange for his pile or not. If the RBI has already xfer'red that 1L to the govt, they can't, correct?

Here is an article which implies that D Subbarao, the ex-governor of the RBI has the same uncertainty bugging him.
http://www.firstpost.com/india/demoneti ... 12516.html

You can offer an opinion without getting all aggravated.

Actually since you are forum moderator - you should be setting an example in this regard, no?

he's lost his money is what would be my guess OR RBI might have some exceptional process for late walk-ins*.. true for all of us who keep rainy day money around the house..

today my folks yanked out another 11k for the tv guy, milk guy expenses LOL.. this after i spent an aggravating 45 min depositing the earlier money in their account.. the most idiotic thing is they hand out forms like as if its rationed.. so you can't take an extra one or two home.. xerox of everything.. now for folks like us its OK, but people from afar..

there is a productivity loss for sure.. so i am now wondering whether to spend a hr in the morning or again wait for a weekend..

now i only hope more rainy day 500 rupees and 1000's dont appear.. i will be the one who gets blamed fr not ferreting it all out and getting it converted. such is life.

*modi is all about rule enforcement. this will not be preannounced so people take dec 30 as the final date.