Currency Demonetisation and Future course of Indian Economy

Karan M · Post by **Karan M** » 27 Nov 2016 18:26

another huge issue is the lack of 100's and 10's... paying autos, xerox guys, the local bakery... wtf i can't yank out my credit card each time .. its neither safe nor do they accept it. i got a sbi debit card to be safe. those chaps had a chinese hack and now i cant generate an ATM pin. LOL. big supporter of modi here but the infra is many many moons away from picking up the slack. i can't run my daily expenses on 500, 2000 or cards or paytm alone. less said about aggravation of my folks. they need to start getting 10's, 100 back into the system.

Chandragupta · Post by **Chandragupta** » 27 Nov 2016 18:28

ShauryaT wrote:
SRoy wrote:Buddy let me call you out.
Let us see.

ShauryaT wrote:Will the consumer stop going to a cash only restaurant?

Yes. Never been to restaurant that doesn't accept debit/credit cards.
Good for you. In Mumbai, there are three classes of restaurants for the masses. Class I, II, III. How many class II and III accept cards? How many consumers who frequent these use cards? How about Tier II/III cities and its eateries for the masses accept cards? In Mumbai it is rumored that the humble wada pav arrests the hunger for the masses, let me check if my favorite stall accepts cards now? I was on the ground on Nov 8. Went to a restaurant, which has been cash only for 50+ years. It was Nov 12 afternoon, after withdrawing some cash from bank went to the place. It was packed. The place has no plans to accept cards. My point is this is not about what you are doing at a personal level, it is about a massive change in an entire eco-system. It will take time, do not have unrealistic expectations and be quick to judge.

...snip

+100

Thanks for this post. I am surprised that many of the Rakshaks here seem to live in a bubble where everything is white, no black, no bribes, everyone accepts cards & paytm, even rickshaw walas and porters. I am stunned by some of the posts and wonder if I live in an altogether different country.

Karan M · Post by **Karan M** » 27 Nov 2016 18:29

also, SBI is doing a yeoman job, despite all its GOI triplicate sign, xerox rules of getting money & handling customers. the tellers are overworked, showing huge signs of stress, but doing their bit. in contrast, almost all private bank ATMs i saw were locked up or shut down. if they are getting money, they need to be told to stop messing around & do their bit.
however, SBI infra is also failing. just got told my PIN is wrong on my debit card. and account was locked after 3 bad tries. now with same PIN i withdrew a kingly 1500 y'day, so huh?? worried, i called bank up. they said no, not locked. so SBI ATM seems to have issues.

Karan M · Post by **Karan M** » 27 Nov 2016 18:33

Chandragupta wrote:
ShauryaT wrote: Let us see.

Good for you. In Mumbai, there are three classes of restaurants for the masses. Class I, II, III. How many class II and III accept cards? How many consumers who frequent these use cards? How about Tier II/III cities and its eateries for the masses accept cards? In Mumbai it is rumored that the humble wada pav arrests the hunger for the masses, let me check if my favorite stall accepts cards now? I was on the ground on Nov 8. Went to a restaurant, which has been cash only for 50+ years. It was Nov 12 afternoon, after withdrawing some cash from bank went to the place. It was packed. The place has no plans to accept cards. My point is this is not about what you are doing at a personal level, it is about a massive change in an entire eco-system. It will take time, do not have unrealistic expectations and be quick to judge.

...snip
+100

Thanks for this post. I am surprised that many of the Rakshaks here seem to live in a bubble where everything is white, no black, no bribes, everyone accepts cards & paytm, even rickshaw walas and porters. I am stunned by some of the posts and wonder if I live in an altogether different country.

i have a few 10's but they are now maah precious.

i think moving to cheques for monthly pay is one thing but lack of change.. is a huge issue.. wtf do i do for chai/shnaaax.

only 500, 2000 wont do.

fingers crossed that the change will be bumped up.

people must be hoarding the 10's, 100's and that will be an issue.

Karan M · Post by **Karan M** » 27 Nov 2016 18:39

rahul saar but dont you think traders will have to keep customer pref in mind. @ end of days, in most places, won't customers start going to places its convenient to pay..

rahulm wrote: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.

symontk · Post by **symontk** » 27 Nov 2016 19:00

Chandragupta wrote:Thanks for this post. I am surprised that many of the Rakshaks here seem to live in a bubble where everything is white, no black, no bribes, everyone accepts cards & paytm, even rickshaw walas and porters. I am stunned by some of the posts and wonder if I live in an altogether different country.

I had a different experience. I went to Chennai by flight from BLR. I thought that paytm would work in the car, but it didn't. I didnt had any money to pay the driver. I checked the ATM's at airport and all were out of cash. Anyway my driver let me off as the flight time was nearing and I told him that i will pay him once I come back. In Chennai, luckily near my hotel where I stayed there was an SBI branch ATM and I could withdraw 4000 with my debit & credit cards. But from next day onwards the ATM doesnt have any money. It was in the same situation until I left after 3 days

Back in BLR, as per my request, the taxi driver came to my flat and I exchanged the new 2000 note for rs 100's minus the fare. All in all good as there are still some good people in the world

Bart S · Post by **Bart S** » 27 Nov 2016 19:11

symontk wrote:
Chandragupta wrote:Thanks for this post. I am surprised that many of the Rakshaks here seem to live in a bubble where everything is white, no black, no bribes, everyone accepts cards & paytm, even rickshaw walas and porters. I am stunned by some of the posts and wonder if I live in an altogether different country.
I had a different experience. I went to Chennai by flight from BLR. I thought that paytm would work in the car, but it didn't. I didnt had any money to pay the driver. I checked the ATM's at airport and all were out of cash. Anyway my driver let me off as the flight time was nearing and I told him that i will pay him once I come back. In Chennai, luckily near my hotel where I stayed there was an SBI branch ATM and I could withdraw 4000 with my debit & credit cards. But from next day onwards the ATM doesnt have any money. It was in the same situation until I left after 3 days

Back in BLR, as per my request, the taxi driver came to my flat and I exchanged the new 2000 note for rs 100's minus the fare. All in all good as there are still some good people in the world

You could have used Ola Money or Uber and taken a prepaid taxi from the Chennai airport (they accept credit cards). And if you make a conscious effort to do that and not use cash, taxis that deal only with cash will find it harder and harder to stay in business and eventually we will see cashless payment across the board. Taxis in developed nations almost universally accept cards, and it really is not hard for our taxis to adapt to it.

Bart S · Post by **Bart S** » 27 Nov 2016 19:16

Karan M wrote:also, SBI is doing a yeoman job, despite all its GOI triplicate sign, xerox rules of getting money & handling customers. the tellers are overworked, showing huge signs of stress, but doing their bit. in contrast, almost all private bank ATMs i saw were locked up or shut down. if they are getting money, they need to be told to stop messing around & do their bit.
however, SBI infra is also failing. just got told my PIN is wrong on my debit card. and account was locked after 3 bad tries. now with same PIN i withdrew a kingly 1500 y'day, so huh?? worried, i called bank up. they said no, not locked. so SBI ATM seems to have issues.

It is the opposite in Chennai, most SBI ATMs are not operational and private banks are carrying the day.

Why do you need forms (unless you are doing the OTC exchange thing)? If you have your KYC details in order you should have no special procedures to deposit (ID proof needed) or withdraw money. When I went to my bank there was nobody in line, I just used a cheque to withdraw money and the transaction was done in 2 minutes, most of which was due to my haggling for 100s

Many ATMs are still not operational but the situation seems to be improving. I could not see more than 10 people in queue at any ATM in the city, and these are ATMs where at any given time there are at least 3-4 people queued up.

Karan M wrote:another huge issue is the lack of 100's and 10's... paying autos, xerox guys, the local bakery... wtf i can't yank out my credit card each time .. its neither safe nor do they accept it. i got a sbi debit card to be safe. those chaps had a chinese hack and now i cant generate an ATM pin. LOL. big supporter of modi here but the infra is many many moons away from picking up the slack. i can't run my daily expenses on 500, 2000 or cards or paytm alone. less said about aggravation of my folks. they need to start getting 10's, 100 back into the system.

The 100s and 10s never went out of the system really. Some people might be hoarding 100s out of panic, but the main issue at the moment is finding change for 2000. I never had an issue with getting change for 100s (of course not doing unreasonable stuff like using 100 Rs to pay for 5 Rs bill etc) in small shops. The situation will start improving once the 500s hit the market.

I think you will find more and more of these shops accepting digital payments. Besides, the really small ones like the paan/cigarette and roadside tea stalls are not really impacted by 1000s and 500s as they don't deal with those denominations. For the rest, running a tab and paying them in bulk (or in advance with a 2000 etc) is what a lot of people are doing. But, eventually, the solution is for these folks to support cashless payment.

uddu · Post by **uddu** » 27 Nov 2016 19:31

Those who wish not to use card can try UPI based apps of banks.

Bart S · Post by **Bart S** » 27 Nov 2016 19:35

uddu wrote:Those who wish not to use card can try UPI based apps of banks.

Spot on, it is free, and it is instant. It is also secure. And you as a vendor or payee can raise a bill or payment request to someone else, making it easier. There are already useful features built into apps like scanning barcodes in order to import payee ID without errors or typos, and you can basically save the IDs of all your regular shops in your app and account so it is really easy. Also no fidgeting with change and stuff like that.

Also, there are so many useful possibilities with apps and digitization, for example the ICICI app I think has a feature to split the check while going dutch at dinner.

Karan M · Post by **Karan M** » 27 Nov 2016 20:14

bart, lol good to hear prvt banks are doing some good in this issue. in my area all of their ATMs are out of commission. about cards i agree but getting over 70 folks to deal with them on consistent basis. not hapoening here. also, still dont get why instead of 1000, modi got a higher denom note in. its just too inconvenient to use. there seems to be a shortage of tens, hundreds and in the past i would withdraw from bank. now i am dependent elsewhere and usual no change sir stuff is happening.

Karan M · Post by **Karan M** » 27 Nov 2016 20:16

now the whole bank is a fishmarket. about id i am depo'ing into ny parents account (i dont have a sbi one) and they wanted a form filled out with their signature, my waist size, this, that. we really really need a digital revolution in our banks.

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

sbi's idea of MF investments is to fill out anonline form and take a printout to their center. even though my Kyc is done. their idea of online leaves something to be desired.

Bart S · Post by **Bart S** » 27 Nov 2016 20:23

An SBI account is useful to have, but for day to day banking the private banks are much better. SBI is useful really when you want a car loan or a home loan - they are much more fair and have better rates than private banks for those.

yensoy · Post by **yensoy** » 27 Nov 2016 21:53

A couple of pages back there was some discussion about Black Money/Funding of foreign education/China. The discussion IMHO was starting to veer off-topic - not that I have problem with that, but there is a lot to discuss in that area which probably should be done elsewhere.

Only one article I wish to cite before signing off from that discussion is a post from Bloomberg https://www.bloomberg.com/news/articles ... s-fail-q-a. An interesting point is made here saying that significant population in China will be upset if the Yuan drops because it is a common Chinese aspiration to send their kids abroad to study.

Chinese economy is not much black money because a lot of incomes just aren't taxed. Their tax laws are crude and unsophisticated, and will need entire revisions to make them fair & relevant. They haven't had the need to dig deep for funding given that eminent domain is paying the bills for now. But that will have to change.

Rishi Verma · Post by **Rishi Verma** » 27 Nov 2016 22:08

I simply don't understand why in a city like Bangaluru, Kerala a Rs2000 note is that difficult to use. Here in UP I have used it for petrol, groceries, and for many other small purchases. Not a single person hesitated to accept it.

Suraj · Post by **Suraj** » 27 Nov 2016 22:59

parashara wrote: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?

No, YOU haven't understood the question here. You're talking ridiculously small sums. Who cares about small sums ? There's 14 lakh crore of cash involved in the demonetization business. You're arguing about the status of a few thousands in the hands of a guy who was in coma ? Unless half the population of India went into coma overnight, something like that is irrelevant. The question is, why are you even bothering coming up with such case examples of non-existent importance when you look at the total money involved ? It's like talking about a multi-lakh purchase and talking about how 1-2 paise could be saved through interesting tricks.

Once the demonetization exercise is complete, the amount of cash that did not get deposited/exchanged will be in >10k crore to lakh crores. There aren't enough people going into coma to make that little parlor trick work. You need about 1 crore people to plan on going into coma right away to make it under the 2.5lakh reporting limit per person.

disha · Post by **disha** » 27 Nov 2016 23:33

Rishi Verma wrote:I simply don't understand why in a city like Bangaluru, Kerala a Rs2000 note is that difficult to use. Here in UP I have used it for petrol, groceries, and for many other small purchases. Not a single person hesitated to accept it.

Because Bengaluru, Kerala has lot of educated people who really do not have a significant problem in life and hence they need to create a "problem" to feel alive. The word is "Ennui". Depression due to boredom. Some actually go comatose.

Gus · Post by **Gus** » 27 Nov 2016 23:57

At thanthi TV - one person said he thinks about 4 lakh Cr will not be deposited and be out of system. And DMK smartass jumped in to say that modi is giving so much harassment to people for just 4 lakh Cr.

Gus · Post by **Gus** » 28 Nov 2016 00:02

Talking to the ola cab guy - asked him how he is coping with people switching to ola money and not cash. He said he has problems lasting a day as he still needs cash for petol and food etc but no cash income. Says he borrows and gives back when ola money kicks in after 3 days to his account. Despite his cash troubles , he was highly supportive of demonetization and was aware of the opposition shenanigans

sooraj · Post by **sooraj** » 28 Nov 2016 00:06

Ministries draw plans to go cashless after PM's diktat

A senior finance ministry source said making the use of debit cards and e-wallets compulsory across the board is legally untenable, but banks have been asked to insist their account holders use these instruments.
Sanjeeb Mukherjee and Archis Mohan report.

A number of ministries and departments in the central government, especially those that have a direct interface with the public, have gotten down to chalking out their strategies to go cashless after Prime Minister Narendra Modi directed them to switch from currency-based transactions to online and cheque payments.

The cashless initiative will embrace a wide range of dealings, including those related to downstream payments such as payment to labourers.

The directives were issued by Prime Minister Modi on Friday night in a special Cabinet meeting held to review the demonetisation drive.

The steps to go cashless would be reviewed in a follow-up cabinet meeting likely to be held next week.

On its part, the labour ministry, along with the finance ministry, has decided to hold special camps in specific locations in all the over 640 districts in the country to facilitate opening of bank accounts for labourers in the organised and unorganised sectors.

Communications have been sent to all state governments for cooperation to hold such camps, while a team consisting of district magistrates, lead district manager of the bank and labour officer would decide on modalities of holding such camps .

A senior finance ministry source said making the use of debit cards and e-wallets compulsory across the board is legally untenable, but banks have been asked to insist their account holders use these instruments.

On Thursday, the finance minister held a video-conference with senior bank officials.

Officials bemoaned that politicians, the judiciary and the media were unaware of the extent to which plastic money has penetrated, and claimed that its use is growing not just in urban areas, but also in semi-urban and rural areas for ATM withdrawals.

Quoting Reserve Bank of India data, a source claimed there are nearly 720 million ATM cards in the country.

Of these, as many as 450 million debit cards, he claimed, are used routinely, or intermittently, for cash withdrawals from ATMs.

In food and agriculture ministries, meetings were held to chalk out a strategy to go cashless. Food Minister Ramvilas Paswan directed his officials to achieve 100 per cent cashless working within the next 15 days.

All payments made for purchasing foodgrains by the Food Corporation of India and others would have to be mandatorily done through Real Time Gross Settlement or cheques, while advisories have been issued to states to install card readers alongside point-of-sale devices.

At present, these devices have been installed at about a fifth of the 500,000-plus ration shops across the country.

For FCI labour payments too, the Centre has directed that all payments made henceforth should in bank accounts.

'The prime minister is very serious on the issue of going cashless. Our officials have been told to go comply as far as possible,' Paswan was quoted as saying by PTI after the meeting.

Agriculture Minister Radha Mohan Singh also held a meeting with officials from fertiliser companies to see if fertiliser sales could be done entirely on the online payment systems.

The government also constituted a high-powered committee under NITI Aayog Chief Executive Officer Amitabh Kant to look into digital payments for all government-citizen transactions.

The Aayog, in a presentation made to government some time ago, had in fact pitched for promoting e-payments in a big way.

The route it suggested included direct integration of e-wallets such as Paytm with the Unified Payment Interface, increasing wallet transaction limits from Rs 10,000 on presentation of additional KYCs, encouraging digital payments for all government services and surcharge on cash handling beyond a certain limit to discourage cash.

The new committee under Kant will identify and operationalise in the earliest possible timeframe user-friendly digital payment options in all sectors of the economy, an official statement said.

shyamal · Post by **shyamal** » 28 Nov 2016 00:13

I already had Paytm. Have used it a few times. Very smooth experience.
Installed pockets today. The process was very quick as I have ICICI account.
Have loaded a token Rs100.
Where can I use Pocket?

Bart S · Post by **Bart S** » 28 Nov 2016 00:21

shyamal wrote:I already had Paytm. Have used it a few times. Very smooth experience.
Installed pockets today. The process was very quick as I have ICICI account.
Have loaded a token Rs100.
Where can I use Pocket?

You can use it as a UPI app, also to make utility payments, phone recharges etc. And of course, you can instantly transfer money to other Pockets users. And the best thing is, that by linking it to your ICICI account like you have done, you don't even need to load money in the wallet, like other mobile wallets, you can just use it as an interface to your ICICI account. Of course it does nag you to load money in the wallet for some reason, and the regular ICICI app has many of the features of the pockets app as well. Paytm does not support UPI. Paytm unfortunately has a wider footprint due to first mover advantage, but longer term UPI is the way to go. Also, with Pockets, you can get a physical visa card (or a virtual one) and use it like a regular bank account (though this might not be worth the effort if you already have other cards). Quite a nice and handy feature for those who want extra security measures and don't want to use their account linked cards for transactions.

Bart S · Post by **Bart S** » 28 Nov 2016 00:31

The new committee under Kant will identify and operationalise in the earliest possible timeframe user-friendly digital payment options in all sectors of the economy, an official statement said.

The old adage that a camel is a horse designed by committee comes to mind. By the time these fuddy duddies come up with a plan the world would have moved on and we would have lost what is a very real first mover advantage and opportunity.

They should just assemble the fintech brains from the industry, including representation from all the major banks, tell them what the requirements are and let them build and implement it.

darshan · Post by **darshan** » 28 Nov 2016 00:44

Some days back many debit card accounts were compromised and cards were reissued. It would be informative if anyone over here who may have been affected by fraud through that and can describe how the whole incident was handled by bank authorities. For example, let us say one ended up seeing few thousands in fraudulent charges due to this, did this person get the money back immediately? was there any run around or hold up of money for awhile?

SRoy · Post by **SRoy** » 28 Nov 2016 00:52

Chandragupta wrote:
ShauryaT wrote: Let us see.

Good for you. In Mumbai, there are three classes of restaurants for the masses. Class I, II, III. How many class II and III accept cards? How many consumers who frequent these use cards? How about Tier II/III cities and its eateries for the masses accept cards? In Mumbai it is rumored that the humble wada pav arrests the hunger for the masses, let me check if my favorite stall accepts cards now? I was on the ground on Nov 8. Went to a restaurant, which has been cash only for 50+ years. It was Nov 12 afternoon, after withdrawing some cash from bank went to the place. It was packed. The place has no plans to accept cards. My point is this is not about what you are doing at a personal level, it is about a massive change in an entire eco-system. It will take time, do not have unrealistic expectations and be quick to judge.

...snip
+100

Thanks for this post. I am surprised that many of the Rakshaks here seem to live in a bubble where everything is white, no black, no bribes, everyone accepts cards & paytm, even rickshaw walas and porters. I am stunned by some of the posts and wonder if I live in an altogether different country.

Restaurants are a luxury. You won't die of hunger if restaurants disappear. Same for street food.

Bhai mat jaa restaurant agar card accept nahi kartey hai. Aur baat kar raha hai riskshaw ki? Dhabe ko kuon chhod diya? Yeah, saab 100 se kum mein kaam chalatey hai.

The person you have quoted has run out of arguments. All commodities and services that are possible with sub-100 are not center of my argument.

Do you want me to post a pic of street food seller touting PayTM? That's from backward Kolkata.

If your "humble" wada pav wala cannot upgrade .... let him remain humble. Better still leave Mumbai, if your (or the gent you quoted) crux of the argument rests upon illegal vendors crowding our tax paid pavements. If they are forced out by markets, good riddance.

If your sympathy is for the illiterate dude that cannot be bothered to operate his bank account and same time littering and crowding our public places maintained out of our tax monies, keep that up to you. Rest will move one.

Bart S · Post by **Bart S** » 28 Nov 2016 00:52

darshan wrote:Some days back many debit card accounts were compromised and cards were reissued. It would be informative if anyone over here who may have been affected by fraud through that and can describe how the whole incident was handled by bank authorities. For example, let us say one ended up seeing few thousands in fraudulent charges due to this, did this person get the money back immediately? was there any run around or hold up of money for awhile?

As far as I know there were no widespread incidents of any such fraudulent charges. The cards were replaced as a preventive measure, in the spirit of abundant caution. The compromise happened through one ATM service provider (Hitachi) and was limited to one small bank. The other banks like SBI just replaced the cards of customers who happened to use the ATMs of that small bank during the period involved.

And yes, most bank terms and conditions (and also those of Visa/Mastercard) have protection against misuse. They do take the normal time taken of a few weeks for investigating and closing disputed charges.

What we don't have in India is the American system of disputing a charge based on bad service or other stuff. For example if you felt that a merchant didn't give you good enough service or what you paid for and complain to the bank they will tell you that it isn't their problem and ask you to sort it out directly with the merchant. If the merchant did a mistake (double transaction etc) or fraud on the financial side however, they will help.

sudeepj · Post by **sudeepj** » 28 Nov 2016 00:59

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

Actually, this figure shows that the amount of currency in circulation has grown in a more or less a constant proportion to the nominal Rupee GDP figure since 2000s. This is unlike the growth in currency of large $ or Euro denomination, which has grown out of all proportion to their nominal GDPs. This indicates that black money has been more or less in a constant ratio to the GDP since the 2000s.

Nominal Rs. GDP here. http://statisticstimes.com/economy/gdp-of-india.php

An example calculation: Currency in circulation in 04, (eyeball estimate) 300,000 crores, GDP in 04 was 2,625,819 crores. Ratio of GDP / Currency = ~8.7

Currency in circulation in 14, (eyeball estimate) 1,300,000 crores, GDP in 14 was 10,472,807
crores. Ratio of GDP / Currency = ~8.0.

ManuJ · Post by **ManuJ** » 28 Nov 2016 01:19

rahulm, Goa govt. move is commendable because they're trying out a model which is not only cashless, it is also cardless and smartphone-less.
Since it doesn't require any additional investment nor does it require mastering new technology, and works with existing basic phones, it has a much better chance of succeeding.

Neshant · Post by **Neshant** » 28 Nov 2016 01:33

What you people don't seem to understand is once banksters gain control of people's earnings & savings by forcing people to hold digital currencies which they alone control, you become a serf unto them.

Right now this realisation cannot sink in because Indians have little to no understanding of how the fiat monetary system is used by banksters to steal vast amounts of wealth from the people. Most thus think moving to a govt-bankster controlled digital currency means weeding out of corruption when in fact it is the start of corruption on a massive scale.

The whole premise of freedom is based on the concept that people own the fruits of their labor without someone who has done nothing to earn that wealth being able to take it away. Unless digital currencies are adopted voluntarily rather than being forced upon the people, it is the road to serfdom. It is an invitation to bankster and other thieves to pilfer the nation through control over the digital currency system.

The free market is what protects the consumer and the nation. Any attempt to install a system where a supposedly all knowing oracle sits in an ivory tower deciding when and how much should be stolen from the earnings of people via removal of digital rupees from peoples account is merely a cover for theft & corruption. Banksters profit lightly by this churn while those who earn the wealth pay for it.

This is a realization that will come too late since most here and in India do not understand the above.

They do not understand how the US Federal Reserve came into existence, who's interests it represents nor any the Income Tax became mandatory the same year the Federal Reserve came into existence, for instance.

Bart S · Post by **Bart S** » 28 Nov 2016 01:41

Neshant wrote:What you people don't seem to understand is once banksters gain control of people's earnings & savings by forcing people to hold digital currencies which they alone control, you become a serf unto them. They can steal it at anytime. The whole premise of freedom is based on the concept that people own the fruits of their labor without someone who has done nothing to earn that wealth being able to take it away. Unless digital currencies are adopted voluntarily rather than being forced down upon the people, it is the road to serfdom and an invitation to bankster and other thieves to pilfer the nation through peddling of influence in govt.

This is a realization that will come too late since most here and in India do not understand the above.

They do not understand how the USbFederal Reserve came into existence, who's interests it represents nor any the Income Tax became mandatory the same year the Federal Reserve came into existence, for instance.

Not sure what your point is. The central banks control currency today, whether printed or digital. It's all fiat money anyway. You can debate the role of banks, and the pros and cons etc and what the founding fathers of the US thought about banks etc, but none of it has any relevance to demonetization. What people are advocating here is for the payment mechanism to be cashless and digital and for transactions and earnings to be within the tax net, not changing the fundamentals of the monetary system.

Do you seriously believe that a wad of cash is something that the banks or government cannot take away today? What just happened to the 500 and 1000 Rs notes?

Neshant · Post by **Neshant** » 28 Nov 2016 01:55

I don't think you understand the issue.

The purpose of forcing people into digital currencies has huge implications.

It's aim is to enforce negative interest rates as decided by a small group of so called wise men drawn from the banking "industry" (which is a fraud not an industry producing anything of value). Negative interest rates mean theft from savers to profit a select few - as decided upon by the select few. At the present, negative interest rates with cash is not possible as people would withdraw that cash.

It's aim is to track the earnings and savings of people to prevent their exit from this bankster controlled system of thieving wealth from the people.

It's ultimate aim is to force people under the control of private banks and remove the freedoms of people through control over their earnings & savings.

It's objective is to privatize profits banks make through market gambling and socialize losses when those bets go bad - all under the guise of promoting growth or stimulating the economy or preventing a recession or too big to fail/jail.

Again it is nothing you will understand because it is nothing India has ever had experience with.
This is however something the Founding there of the United States understood quite well. I.e the freedom of the people rests upon the issue of who defines & controls the monetary system.

Consolidating the wealth of the people under a centralized system and handing over the keys to the safe to banksters is the stupidest thing India can do. It's the road back to colonialism.

ShauryaT · Post by **ShauryaT** » 28 Nov 2016 02:05

Neshant: You bring in a very good point and you are right many may not appreciate the issues you bring in. When you take what you say and see it within the frame of a corrupt system in India, where bank loans are a matter of corruption as a matter of rule resulting in NPA's. Govt controlled banks that refuse to reform, this absolute control of banks over wealth of people becomes double dangerous. A key test of reform for me has always been the disinvestment of banks and release from govt control. But, on your main point. One of the things that was attractive about the bitcoin system was exactly this element - not controlled by the banking system. The central banks moved quickly to shut them down in most markets. We have become a very controlled society and the free Indian in me essentially revolts to some of these ideas.

ShauryaT · Post by **ShauryaT** » 28 Nov 2016 02:07

As expected, just like many people who have money figure, how NOT to pay taxes as demanded by the Government, similarly there are bureaucrats who spend their time thinking how to get people to comply and bring them into the tax net.

Rs 500/1000 scrapped on recommendations of RBI: Ravi Shankar Prasad

In this game of cat and mouse, the cat has wielded a big weapon this time. I hope this weapon is only a one time phenomena to be followed by some aggressive steps to shore up the INR, provide tax reform, tax administration reform, disinvestment, banking reform and most important devolution of power. What I hear mostly is change of the economy through behavior and not fundamental reform.

At root there has to be an attempt made towards building trust between the citizen and the government at all levels. Wielding a stick is natural and easy for a government, building trust is the hard part. Every rupee of tax generated by arresting BM will be 10 times rewarded if the same is channelled to productive uses in private hands and figuring a way to raise compliance through non-coercive means, maybe a program to at least get central govt level corruption down to ZERO!! Another one is a sustained program to reduce the indirect tax regime dependence by central government.

Most who have BM would rather loose 50% of the value rather than comply with the tax net. Every past coercive means to raise this compliance has essentially failed. This is the result of our systemic mis-governance and not due to a faulty character or any notion of a dishonest nature of the Indian people. I summarily reject such ideas. The government is best advised to tap into some non-governmental sources for such out of the box thinking. They do have some folks, who can advise on the matter but looks like they have been sidelined. There will be a short term negative impact, no one is hiding from that reality. The next step is to ensure to do no further harm. The attempt to exert control through coercive means will be met with a counter. The worst will be to do what Burma did to its own currency - slaughtered it. Caveat.

Why India’s Move Toward a Cashless Economy Will Backfire

SRoy: We will move on.

darshan · Post by **darshan** » 28 Nov 2016 02:30

BM and NPAs are interesting concepts. We just recently started surveying local properties to start looking for bargains. One thing that caught our attention was many big properties have essentially been mortgaged out to banks which did not used to be. And most of this properties can be traced to local politicians and businessmen that should be at the top of the list of IT folks. Each and every one of this property has been suddenly mortgaged to banks at a valuation that no one would have paid before Nov 8th and certainly will not pay for many years to come.

morem · Post by **morem** » 28 Nov 2016 04:14

http://economictimes.indiatimes.com/new ... 655791.cms

Blanket reprieve for 2.5 lakhs unlikely

This gets better and better.

For all those who thought they could use this loophole , time to pay up.

Rishirishi · Post by **Rishirishi** » 28 Nov 2016 04:18

For those who say cashless is not possible in India.

What will happen if india did decide to go near cashless? Cut out the RS 500 and RS 000 notes. Made it mandatory to use bank transfers for all purchases over Rs 500. Made it mandatory for employers to pay wages in cash only.

Do you think business would stop ?? No it will never stop, becase people want to trade. People will learn and start adapting.

As of now there are many vendors who accept cash only. It is mainly bacause they think it will all get back to "normal". If it is established that you can only do cashless transactions, well, then they will jump up and adapt.

Yayavar · Post by **Yayavar** » 28 Nov 2016 05:12

completely cashless is scary. All your transactions and money is then held by the banks, paytm like intermediaries or govt. Any one of them can put a limit, hold or even like various 'gift' cards cause the money to expire if not used in time. Large cash may allow for hawala and hidden transactions but purely cashless takes away all control from the individual.

Rishirishi · Post by **Rishirishi** » 28 Nov 2016 05:21

Yayavar wrote:completely cashless is scary. All your transactions and money is then held by the banks, paytm like intermediaries or govt. Any one of them can put a limit, hold or even like various 'gift' cards cause the money to expire if not used in time. Large cash may allow for hawala and hidden transactions but purely cashless takes away all control from the individual.

Most countries in the west is already 90% cashless. People hardly carry cash. It is not a problem at all. If you are running a payment service, you cant expire them like you do with a phone subscription. In most cases the money go directly between accounts. Think of it.

You can pay all your capital goods (cars, tv, refrigirator,) property, utilities, holidays, clothes, fuel etc by card/bank transfer. No problem at all.You need some cash for vegitables and smaller purchases of very small sums. I say, keep the RS 100 rupee note only.

Also, cashless will not remove all BM by itself. There are many ways to bribe people. But you cant maintain the "bribing value chain" that runs from the peon to the CM/DM/CJ etc etc.

ShauryaT · Post by **ShauryaT** » 28 Nov 2016 05:24

darshan wrote:Some days back many debit card accounts were compromised and cards were reissued. It would be informative if anyone over here who may have been affected by fraud through that and can describe how the whole incident was handled by bank authorities. For example, let us say one ended up seeing few thousands in fraudulent charges due to this, did this person get the money back immediately? was there any run around or hold up of money for awhile?

Anything that touches your bank account electronically in real time has a perceived level of high risk. In the place we live in, although debit cards are widely accepted, most consumers prefer the user of credit cards. It is my understanding that Debit card fraud is not as protected as credit card. Almost everyone I know of has faced some type of credit/debit card fraud. So, yes a serious issue and having a buffer like a credit card between your bank and the retail PoS is a good conventional idea. Maybe the younger generation feels otherwise.