Currency Demonetisation and Future course of Indian Economy

Philip · Post by **Philip** » 30 Nov 2016 12:20

http://timesofindia.indiatimes.com/indi ... 695919.cms

Pay day becomes ‘Mayday’ as banks run short of cash
TNN | Updated: Nov 30, 2016,
MUMBAI/KOLKATA/BENGALURU/NEW DELHI: The continuing shortage of cash+ forced banks to ration withdrawals and down shutters early as the supply of bank notes+ from currency chests failed to keep up with the demand.
Bank of India's iconic main branch at Fort in Mumbai was forced to shut early as angry customers waited outside. Several bank branches ran out of notes, including Rs 2,000 ones, within a few hours of opening for business on Tuesday, the first day of the pay day week+ . Most private banks in the country's financial capital received around Rs 20 crore, much below their daily cash requirement.
Bankers said although customers are entitled to withdraw up to Rs 24,000, branch managers are using their discretion and rationing payouts+ to avoid shutting down their cash counters early. Intermittent supply of cash to bank branches, the aversion to accepting Rs 2,000 notes, dry cash vending machines and shortage of new Rs 500 notes will inconvenience pensioners and employees who will visit bank branches in large numbers.
The government said there is enough cash to meet the demand but bank branches have a different narrative.
In Kolkata, the footfall in bank branches during the salary week doubles. The cash crunch continues here, like in most cities and towns across the country. An SBI branch manager in south Kolkata said, "We are already experiencing the rush as some private companies have credited salary. We're giving full cash to branch customers as per RBI guidelines but it's not possible to provide full cash to non-branch customers."
"We are asking for more cash but not getting it. In the last two weeks, we have got only 25% of what we asked. The supply of Rs 500 notes is minuscule. We are not getting Rs 500 notes and it is mostly going to ATMs," the manager said.
A leading public sector bank branch in Bengaluru's MG Road said the bank has never refused money to customers because of lack of cash. However, 99% of the customers requiring lower denomination currency are returning without cash. He attributed this to people flatly refusing the Rs 2,000 note. The bank's demand for Rs 1 lakh in Rs 100 denomination came after more than five days while the Rs 500 note never came, he said. He said a massive rush was expected from Wednesday as there was not enough cash in smaller denominations to meet even 1% of the demand.
Another public sector bank manager in the city said the bank's 46 branches in the city received Rs 20 crore this week, a tiny part of the demand. "We have cash in Rs 2,000 denomination but customers don't want it," he said.
A cash handling logistics employee said branches get preference over ATMs and the ATMs are decided according to the number of transactions in a particular machine. In New Delhi, private banks are facing the brunt. "My cash ran out by 12 noon and after that we are only accepting deposits and catering to other services such as drafts," said a private sector bank manager in Delhi.
State-run banks are pulling out all stops to ensure they are able to cope with the salary rush. "We have rolled out micro ATMs at government offices. We have put up 10 counters at New Delhi Metro station and our mobile ATMs are placed in busy areas and near government offices," a senior Punjab National Bank official said, adding that more counters were being opened at branches. He said private sector employees may face problems but government employees may fare better as some departments have already drawn advance cash.
Top Comment

You cant stop anyone using cash. Even developed countries it is a problem to stop people spend in cash to avoid credit card bills and debit card frauds. It is govt responsibility to make cash availab... Read More

PS:Modi is truly well on his way in achieving his "impossible dream" ,making India "cashless",but not in the manner he's expecting,beggaring us in the process. As one wit put it,he's taken us to the glorious heights of the Soviet Union,turned us into Commies,and making us wait in Qs like the legendary Qs in the USSR for everything.

uddu · Post by **uddu** » 30 Nov 2016 12:33

If you go through the article, it also say that 2000 is available and people are not keen to have it. So the situation is more of change or less of 500 and 100's rather than no cash.

vina · Post by **vina** » 30 Nov 2016 13:20

uddu wrote:If you go through the article, it also say that 2000 is available and people are not keen to have it. So the situation is more of change or less of 500 and 100's rather than no cash.

Am with a colleague at. a hospital canteen. He is no way connected with the hospital just a lay visitor. He gave out a 2000 note for 2 lunches of 90 each and got 1800 back. No fuss no questions.

pankajs · Post by **pankajs** » 30 Nov 2016 13:40

uddu wrote:If you go through the article, it also say that 2000 is available and people are not keen to have it. So the situation is more of change or less of 500 and 100's rather than no cash.

But how do you spin it as *blow2modi* is you are not allowed to ignore/fudge facts. We must make allowances wonlee.

pankajs · Post by **pankajs** » 30 Nov 2016 14:19

Cigarette smokers some times point to a 80+ year smoker, who has been at it from age 20, to make the argument that smoking is not dangerous. There is a name for this tactics just that it escapes me at the moment.

Similarly, we will hear from time to time about someone who has converted all his black cash to white as having outsmarted GOI and as proof that this latest action is not working. What we have to realize that no system is foolproof and it is a given that some will escape the *initial* sweep.

This is just the first of many steps but an important one to squeeze/control the *pipeline* that is used to transfer black money between assets so that when the next strike comes leeway afforded the black money hoarders is very little. I am thinking of this as a preparatory step for the next strike.

Sachin · Post by **Sachin** » 30 Nov 2016 14:35

The cooperative bank business seems to be too confusing at times.

R_Kumar wrote:I red on news paper that sp leaders in UP have converted around 2000 cr using coprative bank.

Gus wrote:Co-op banks are not allowed to submit old money unless they have clearance - which is given only for some specific coops that follow kyc etc.

Mathrubhumi daily (in Malayalam), in its printed edition had a report that the Registrar of Co.Op society at Kerala have given an informal/verbal order asking Primary Co.Op banks to open (or reuse) their accounts at District Co.Op & State Co.Op banks and transfer all their Rs.500 & Rs.1000 cash funds to these accounts. It seems some new generation banks had offered account opening facilities to Primary Co.Op banks, but they could not accept that offer. They approached the registrar to see if PSU/nationlised bank can be asked to help them.

Suraj wrote:RBI hasn't provided any bank the authority to convert the older currency into newer ones without proper KYC/Aadhaar paperwork. The money can sit in the bank, but it's not going to get converted without the RBI's say so, and that's not going ot happen. So, all that's happened is that they've handed over the old notes and now have a target painted on their backs. That is, unless the co-op bank itself is willing to go under to avoid disclosing the depositors' names.

But I am getting an uneasy feeling of these primary co.op banks just depositing a huge trash of Rs.500 & Rs.1000 notes, and saying that they really don't know from which of their customers the money came in. The primarty co.op banks (full of politicians in its management) can also play like martyrs and say that evil Modi & Co, asked them to deposit all money. But they like true patriots did not share the account details, and "protected the poor"

.

tandav wrote:Can People deposit unaccounted cash without KYC in Cooperative banks and transfer funds in their account via NEFT/RTGS/IMPS/Cheque to a Scheduled bank and use the money. Or can they pay other people with Cheques and DD from Co-op banks and move that liability to other people.

What the Tamil Nadu govt. has done, is asking every Primary Cooperative "Bank" account holders to open an account with KYC in district cooperative bank. Then they can raise a request to transfer their primary co.op bank account holdings to the district co.op bank account. But please note; KYC is required, and this is an account to account transfer. And then the money can be with drawn, but again questions have to be answered if the money moved liked this was really huge.

Cheques and DDs from Co.Op banks can be given out to people. The liability does not get transferred. As the person who encashed the DD can say that he got the DD from the account holder. The route of the DD can be traced, and the account holder can be asked on how he gave the DD for the amount? When he was not officially supposed to have so much money. And now since the whole world knows that co.op banks are kind of locked out, no person may accept such cheques and DDs.

Sicanta · Post by **Sicanta** » 30 Nov 2016 14:49

HDFC chief Aditya Puri hints ex PM Manmohan Singh wrong? Dubs economists’ 2%’ fall in GDP comment as ‘nonsense’

http://www.financialexpress.com/economy ... se/460129/

Akshay Kapoor · Post by **Akshay Kapoor** » 30 Nov 2016 15:14

pankajs wrote:Cigarette smokers some times point to a 80+ year smoker, who has been at it from age 20, to make the argument that smoking is not dangerous. There is a name for this tactics just that it escapes me at the moment.
.

Could the name be Bullshit ? Lot of it these days on BR due to the kindness and very very long rope given by mods. In the name of freedom of speech absolute lies and crap is allowed to be peddled and the debate and learning gets hijacked.

pankajs · Post by **pankajs** » 30 Nov 2016 15:19

^
Of course it is bullshit in common speak

but I was thinking of the scientific name ... one that is used in geek speak.

Rishi Verma · Post by **Rishi Verma** » 30 Nov 2016 15:20

Akshay Kapoor wrote:
pankajs wrote:Cigarette smokers some times point to a 80+ year smoker, who has been at it from age 20, to make the argument that smoking is not dangerous. There is a name for this tactics just that it escapes me at the moment.
.
Could the name be Bullshit ? Lot of it these days on BR due to the kindness and very very long rope given by mods. In the name of freedom of speech absolute lies and crap is slowed to be peddled. Fascinating.

It's allowed in this case due to the untimely death of Fidel Castro -some grief stricken member will utter incomprehensibles.

Akshay Kapoor · Post by **Akshay Kapoor** » 30 Nov 2016 15:21

I know I know Pankaj. Just couldn't resist it !

pankajs · Post by **pankajs** » 30 Nov 2016 15:31

I have a sneaking suspicion that GOI will not lift the Cash withdrawal limit even after Dec'16. At most they will bump it up a little.

Not many mango Indians spend in excess of 25K in cash per month. This is to impose an indirect cost on Cash withdrawals and force folks to go digital for high valued transactions.

Gus · Post by **Gus** » 30 Nov 2016 16:03

Corruption will become legal at the top in the form of charity orgs etc - like massa.

Rishi Verma · Post by **Rishi Verma** » 30 Nov 2016 16:09

pankajs wrote:I have a sneaking suspicion that GOI will not lift the Cash withdrawal limit even after Dec'16. At most they will bump it up a little.

Not many mango Indians spend in excess of 25K in cash per month. This is to impose an indirect cost on Cash withdrawals and force folks to go digital for high valued transactions.

Cash withdrawals limit applies only to those zero balance PMJDY accounts who deposited money starting Nov 9, 2016. Not all PMJDY accounts and to none of other types of accounts.

Picklu · Post by **Picklu** » 30 Nov 2016 16:44

Bart S wrote:
vina wrote:
UPI has a bill pay part as well. No need for any paper at all! The doctor can raise a bill for the VPA , or simply even request for payment from you, with the "Ask Money" feature and it will keep following up until closed !
Yep, integrate this with a basic patient records system or any basic CRM or billing system and the whole process is totally seamless.

And pretty please make them available on iOS and Windoze

Bart S · Post by **Bart S** » 30 Nov 2016 17:23

shiv wrote:
jamwal wrote:Vina unkil is right. Can't do an online transfer to a wrong account number or in a wrong branch. Only offline deposits have this risk.

Shiv saab, when did you enquire about card machines ? You don't need 2 lpm turnover. Even 3rd party companies like PmoneyPay and 1 2 Others are offering this service at good prices.
It used to be 2l
Maybe changed now. But the way to go is not POS but PayTM or UPI

Personally I have no need because my work is at a place which takes cards anyway.

I am sure this is going to come down, if not already. I see really small shops having them these days, the kind of places that wouldn't have more than 1lakh turnover in the best of months.

Also, the entry cost for the card swiping things has come down to the point where it does not matter. There is something available as a phone accessory that lets you swipe cards. Once the contactless RFID cards become vogue even that will not be required.

Yagnasri · Post by **Yagnasri** » 30 Nov 2016 17:58

SB account rules permit only four withdrawals in a month. But no one takes this rules seriously. That can be enforced. Further restrictions on ATM needed to be continued. No excused. Why people need huge cash withdrawals and for what purpose? Yes, there will be problems in rural areas but like anything we can look into solutions for this. Look at SBI Pay if you have that account. Great facility of UPI. I am told same is available with almost all the banks. I am going to use it now.

In respect of the cash, spoken with top people in money distribution entity at money bag capital today. Cash is coming, but logistics is the problem. It is taking almost 10 days from press to distribution of notes. New ways are needed to be explored without compromising security etc.

Manish_Sharma · Post by **Manish_Sharma** » 30 Nov 2016 18:31

Rishi Verma wrote: Burka keeps picking gems to pooh-pooh the scheme from her chair. She isn't stupid like Rajdeep to go out and "survey" how real people feel. I guess congress can't pay her in new notes.

I think these two and there ilk are now just dutifully registering their protests and opposition to NaMo. These corrupt crusaders are beyond caring what citizens think about them.

They are showing to their foreign masters the evangelist crusaders, the ford foundation and others that how deperately tooth and nail they are fight against NaMo.

Sachin · Post by **Sachin** » 30 Nov 2016 19:09

Just to show how quickly business adapts. I was planning to through out my Airtel 4G connection as the rates were becoming higher and higher. Hathway was setting shop in our area, and had started putting up notices. So called one of their boys who landed up at home this evening. I said, it will take some time for me to arrange the payment (SHQ has to come from bank). He said "not to worry sir, I have got a small card swiping machine with me"

. This was the device which could be connected via blue tooth with a cell phone. He said he was issued with this one this afternoon.
Aside: The swiping machine did not have any power, so I paid by cheque. May be his future customers would have it more easy.

Rishi Verma · Post by **Rishi Verma** » 30 Nov 2016 19:10

mamta vs modi

The video is pre-DeMo but comments are post-DeMo. Shows why Didi is no match for NaMo and whats the general populace thinks.

in other news Kejri twisted government numbers (again) to spread lies but was taken to task by jaitley

ShauryaT · Post by **ShauryaT** » 30 Nov 2016 19:20

Looks like we do expect no limits on withdrawals on the new notes as they reach wider and wider circulation. Good, just what i expected.

Manish_Sharma · Post by **Manish_Sharma** » 30 Nov 2016 19:24

Philip wrote: PS:Modi is truly well on his way in achieving his "impossible dream" ,making India "cashless",but not in the manner he's expecting,beggaring us in the process. As one wit put it,he's taken us to the glorious heights of the Soviet Union,turned us into Commies,and making us wait in Qs like the legendary Qs in the USSR for everything.

Hai O Rabba !!!

Its very comfortable to be safely away from rulers like soviets and castro while letting their citizenry be crushed thoroughly and clapping these dictators doing eyeball contest with usa, but I should have total comfort my self.

Let me repeat :
"Haq Achha, uskey liye koi aur marey aur achha"

manjgu · Post by **manjgu** » 30 Nov 2016 19:26

bangali finance minister threatening delay on GST rollout...real vermins. says double whammy on account of demoni... and GST.

shiv · Post by **shiv** » 30 Nov 2016 19:27

Weather yesterday: Hot clear, Canara bank allows Rs 2000 withdrawal
Weather today: Cloudy, mild, Canara bank allows Rs 6000 withdrawal
Weather tomorrow - Watch this space

Manish_Sharma · Post by **Manish_Sharma** » 30 Nov 2016 19:32

Quite a few people have remarked they are liking Arun Jaitely more these days.

It seems he was the Senapati who was countering attacks from media, even rajat sharma types and then parliament also. The way he has handled and articulated govt. views has won him quite a few admirers.

manjgu · Post by **manjgu** » 30 Nov 2016 19:39

Jaitely is a hardboiled vakil ... no one can better of him except maybe Subramaniam Swamy !! hahahahaha

rahulm · Post by **rahulm** » 30 Nov 2016 19:42

Today I went to a large hardware supplies shop in north Goa because they have a POS machine.

Chap wanted t charge me 2% to use my debit card. When I politely pointed out that banks have waived transaction charges until December he launched into a speech about the monthly rental he has to pay for the POS machine and therefore, he does not care about the bank waiving transaction charges.

He also said, its better for me if I paid cash. To which, I replied, that I have money but not *that* kind of cash money. That seemed to rile him up. He gave me a (free) speech about anyone who works hard from morning to evening and earns cash is not generating black money.

His wife chipped in and said using this logic a hard working thief may claim all his earnings as honest. In the uncomfortable domestic silence that followed, I finished my purchase and as I was walking away said that only the tax office gets to decide the definition of white money.

As I walked away in the deafning silence, I think I may have started a nice domestic dispute.tonight, He might be sleeping in the verandah, with the mosquitoes, lonely and forlorn with a a feni bottle for company.

Episode aside, the shop owner was echoing the sentiments voiced by some on th forum using their own convenient definitions for BM Such rationalising may actually not be uncommon.

What should one call an entire class of people, who waccumulate wealth on the back of government sanctioned money, a nation state that offers security, protection and an identify but subvert and undermine wholesale for personal pecuniary gain.

shiv · Post by **shiv** » 30 Nov 2016 20:33

rahulm wrote:Today I went to a large hardware supplies shop in north Goa because they have a POS machine.

Chap wanted t charge me 2% to use my debit card. When I politely pointed out that banks have waived transaction charges until December he launched into a speech about the monthly rental he has to pay for the POS machine and therefore, he does not care about the bank waiving transaction charges.

I was luckier. I had a car repair bill of Rs 700. I took a 2000 note and a credit card intending to tell the guy to waive the 1.5% extra for cards if he pleaded and said he does not have change for 2000. Turns out he had change and gave me 1300 in 100. I am having reasonable success in getting change for 2000s

Subdas · Post by **Subdas** » 30 Nov 2016 20:41

2 examples of how business is adopting to LESS CASH ( not CASH LESS ) situation:

- ordered biryani for my sons birthday and paid by POS at door
- corner sweet shop now has a POS and I am now happily buying sweets CASH LESS
- corner med shop now has a POS and I am buying medicine CASH LESS
- corner grocery always had a POS so it was CASH LESS already
- carpenter did a 2k job and gave his bank details for me to do a NEFT
- have asked for bank details of all domestic helps so that can do NEFT from coming month

Subdas · Post by **Subdas** » 30 Nov 2016 20:59

BM is un taxed money. If it is earned illegally then BM becomes DM or dirty money. Modiji's first game plan is to tax all BM and use it to blank role social and physical infra of the country. All this talk of LESS CASH economy is secondary at this time. He is also not interested in going after DM at this time and that is why he is offering avenues for BM to be brought to him for tax

Vikas · Post by **Vikas** » 30 Nov 2016 21:07

Problem is after all this nice preaching about effort towards Cashless society blah blah, People have started getting bothered about lack of low denomination notes, long Queues and ATM's running dry.
You should see teh disappointment when ATM as well the bank thtows out the 2000 rupee note.
The initial claim of Govt was that poor hardly use or handle 1000 rupee note then How on earth they will use Rupee 2000 note.

This whole goodwill about BM drive will vanish pretty fast if Govt starts converting this excercise into something else which is forcing people to go cashless. Cheering crowds don't take much of time to turn into slogan shouting opponents atleast in India.
JMT

Sachin · Post by **Sachin** » 30 Nov 2016 21:13

ShauryaT wrote:Looks like we do expect no limits on withdrawals on the new notes as they reach wider and wider circulation. Good, just what i expected.

RBI to provide Rs 1000 cr tomorrow for distribution of salary: Isaac......
The Fin.Min of Kerala has been whining about this currency demonitisation right from Nov 8th. He also seems to have a tendency to do rumour mongering or create a panic situation. Luckily his antics so far has been only of limited success, even in Kerala. He painted a picture that KL state is broke so bad that even the Govt. servants would not get their salaries paid on time as there is a cash crunch

. And now he tries to spin a story that thanks to his intervention, RBI has promised the required amount of cash. FYI, it has never said no in the first place. But the salient points are:-

The with drawal limit of Rs.24,000 every week still holds good. Fin.Min wanted entire money to be with drawn at one shot, RBI said no way.
The salary pay out would be primarily in Rs.2000 & then Rs.500 notes. Which means that people who want more money, will have to opt for Rs.2000 notes. Which also means that the local shop keepers, milk men, and any body who have loaned money to these govt. officials will have to accept the Rs.2000 note (or else, they can wait for one more month). This would be kind of forced circulation of Rs.2000.

prahaar · Post by **prahaar** » 30 Nov 2016 21:20

Vikasji, going less cash is a method to reduce avenues for future BM and demonetization is to existing haul BM. These two steps are needed in conjunction to avoid rapid BM creation. Demonetization without going less cash would be akin to performing liposuction and starting with hamburger, fries and coke in the recover stage.

NRao · Post by **NRao** » 30 Nov 2016 21:24

sdas1645 wrote:2 examples of how business is adopting to LESS CASH ( not CASH LESS ) situation:

- ordered biryani for my sons birthday and paid by POS at door
- corner sweet shop now has a POS and I am now happily buying sweets CASH LESS
- corner med shop now has a POS and I am buying medicine CASH LESS
- corner grocery always had a POS so it was CASH LESS already
- carpenter did a 2k job and gave his bank details for me to do a NEFT
- have asked for bank details of all domestic helps so that can do NEFT from coming month

Not sure how prevalent this is, but it is really great.

What is the situation in transportation, cabs, buses, trains, etc? Have they (outside latest metro trains) started moving to cashless?

This demonetization needs to be seen along with the restructuring of the sales tax too (GST?).

Not sure, but, if Modi can now simplify paying taxes (if it is not already), then tackle black money in real estate and foreign accounts, that should get India moving faster in the right direction.

Bart S · Post by **Bart S** » 30 Nov 2016 21:46

NRao wrote:
sdas1645 wrote:2 examples of how business is adopting to LESS CASH ( not CASH LESS ) situation:

- ordered biryani for my sons birthday and paid by POS at door
- corner sweet shop now has a POS and I am now happily buying sweets CASH LESS
- corner med shop now has a POS and I am buying medicine CASH LESS
- corner grocery always had a POS so it was CASH LESS already
- carpenter did a 2k job and gave his bank details for me to do a NEFT
- have asked for bank details of all domestic helps so that can do NEFT from coming month
Not sure how prevalent this is, but it is really great.

What is the situation in transportation, cabs, buses, trains, etc? Have they (outside latest metro trains) started moving to cashless?

This demonetization needs to be seen along with the restructuring of the sales tax too (GST?).

Not sure, but, if Modi can now simplify paying taxes (if it is not already), then tackle black money in real estate and foreign accounts, that should get India moving faster in the right direction.

The stupid thing is that plenty of government services are still not cashless. Like NHAI (most toll booths), public transportation, many post offices, many utility payment counters (not talking about online but physical payment counters) etc.

This is low hanging fruit for the Modi govt that they should tackle ASAP. Otherwise vested interests will complain that Modiji talks about cashless but see what his government organizations are doing. But this is a real problem and an inconvenience as well. All it needs is an executive decree from the govt.

shiv · Post by **shiv** » 30 Nov 2016 21:50

I spoke to several auto drivers today. More than 50% own ordinary phones - not smartphones. they don't know that dialling *99# will get them a menu that enables bank transactions via SMS. Try it

Bart S · Post by **Bart S** » 30 Nov 2016 21:50

rahulm wrote:Today I went to a large hardware supplies shop in north Goa because they have a POS machine.

Chap wanted t charge me 2% to use my debit card. When I politely pointed out that banks have waived transaction charges until December he launched into a speech about the monthly rental he has to pay for the POS machine and therefore, he does not care about the bank waiving transaction charges.

I would have given him a piece of my mind and walked away leaving him in no doubt about the reasons why he didn't get my business. There are lots of people with genuine problems due to demonetization that I sympathize with and am willing to go an extra mile for but not for this lot.

NRao · Post by **NRao** » 30 Nov 2016 22:03

The stupid thing is that plenty of government services are still not cashless. Like NHAI (most toll booths), public transportation, many post offices, many utility payment counters (not talking about online but physical payment counters) etc.

GoI needs to have backend systems ready to move to that. Do they?

Who provides the PoS gizmos? A bank or the transacting middle-man (so to speak) typically issues them.

Connectivity is an issue.

Bart S · Post by **Bart S** » 30 Nov 2016 22:06

NRao wrote: GoI needs to have backend systems ready to move to that. Do they?

Who provides the PoS gizmos? A bank or the transacting middle-man (so to speak) typically issues them.

Connectivity is an issue.

I don't think so. Every govt organization has a bank account, and with very rare exceptions access to telephone lines and cellular signal. That is all they need. And most of them already have some kind of computerized system running their finance and operations, though strictly even that is not required for accepting cashless payments.

When small kirana stores can get POS terminals, there is no reason why big government institutions cannot, except for organizational inertia (and maybe corruption).

Suraj · Post by **Suraj** » 30 Nov 2016 22:09

VikasRaina wrote:Problem is after all this nice preaching about effort towards Cashless society blah blah, People have started getting bothered about lack of low denomination notes, long Queues and ATM's running dry.
You should see teh disappointment when ATM as well the bank thtows out the 2000 rupee note.
The initial claim of Govt was that poor hardly use or handle 1000 rupee note then How on earth they will use Rupee 2000 note.

This whole goodwill about BM drive will vanish pretty fast if Govt starts converting this excercise into something else which is forcing people to go cashless. Cheering crowds don't take much of time to turn into slogan shouting opponents atleast in India.
JMT

How does GoI fix people like habal hoarding a 100 x Rs500 notes rather than spend it so others have access to it ? While simultaneously moaning about liquidity ?

No, the answer is not 'print more cash' . Doosra_habal will just hoard another 100 notes .

No this is economic piskology for shiv to expand on : the most useful behavior in the short term is the one least personally intuitive . This is a quirk of popular behavior. People think in a cash liquidity crunch they should save up cash . No, it's the opposite that helps .

Guess what happens to cash liquidity when everyone tries to go cashless and hoard cash ? It worsens . Spending cash quickly does not deny you cash. Everyone doing so ensures liquidity that makes it easier for you to get your hands on cash too . After all every cash transaction has a counterparty and one of those is you ...

When everybody transacts in cash in the short term when there is cash liquidity issues, it means everyone has access to many people whose cash flows to them . When everyone goes cashless and hoards cash the only major outlet is government, and it is not a solution because the psychology of hoarding is not changed.