Currency Demonetisation and Future course of Indian Economy

[Chandragupta]

I really feel that they could have assembled a team of 20 well read CAs and they could have compiled a list of 100 best ways to launder BM and the government could have shut at least 50% of them. It is the CAs who deal with sort of thing daily and know every loop that exists in the system.

Saar, do you really believe any half compotent govt(leave alone the NaMo led one) would not have thought of this and done this when a ordinary mango-man like me is able to make this out?

The guys sitting at the top of RBI and in the NITI-Aayog/"Thinktanks" which organised this move are "baap" of the CAs and know inside-out of all these tactics.

Its just that "All best laid plans only survive until the first contact with enemy". Am sure many many stories about the unique and strange circumstances and challenges faced will come out in the days to come once dust settles.

Saar I genuinely think that the GoI missed many gaps to plug. Baaps or not, they missed several. That is why bankers have made merry and laundered thousands of crores.

[Yagnasri]

Of courses. We forget the word "Lakh".

[pankajs]

Very early in the process I had *assumed*, as shared with this forum, that about 20% of all black money hoarded in cash will be escape the GOI net.

Assuming 15 Lakh crore as the total currency circulating and 20% of that as black money, my guess is that 60,000 cr (15 x .2 x .2) will be laundered successfully. If the black money component is 30% then I expect about 90,000 cr (15 x .3 x .2) to escape the GOIs net.

It will not surprise me at all and my belief is that no amount of prior planning would be able to plug all loophole. That is just the nature of the beast.

[Schmidt]

Went around in search of cash , all 8 ATMs I visited were out of cash , after that I gave up and went home

Its getting tiresome now

Will have to go to the bank to withdraw cash tomorrow

[Marten]

Where Saar? Two ATMs in my complex have money and the crowds are 6-8 strong. I withdrew just once and am still just exchanging as required. Have no use for 2k notes so will not be standing in line until they issue 100s and even that is to assuage my MIL who feels insecure otherwise.btw, this morning got change from office cab driver who has easier access to small change. Gave half of it to others in the office. 1k is more than enough for me to last the month.

[negi]

South is doing well ; it is the ugly Narth where banks are hoarding and mismanaging because the demand is too high.

[habal]

That is why bankers have made merry and laundered thousands of crores.

very harsh of you to blame bankers for policy failure. Here is a whatsapp post circulated in my group from RBI GM

--------------------

Friends,

Ever since demonetisation was announced by our P.M., Bank employees have been working practically 24x7 all over the country but the kind of media criticism being heaped upon such employees has to be condemned. At this crucial juncture (with only 10-12 days to go) all Bank employees and their well wishers should remain united. All is not lost.

1. Out of nearly 11 Lakh employees and over 60000 bank branches, only less than 100 employees and about 15 branches have been found to be violating the instructions. THIS IS MINISCULE.

2. Due to proper highlighting of the issue by several Union Leaders, the role of RBI has been highlighted inasmuch as in Tamil Nadu, there are nearly 9000 public sector Bank branches and about 900 private sector sector Bank branches, but the currency supplied to both are almost same. IS IT NOT IMPROPER?

3. In several huge amount of new currency has been caught by Govt. agencies. THE QUESTION IS HOW SUCH CURRENCY CAME INTO THEIR POSSESSION? Does the media think ordinary bank employee has given this? The Media and public need to know that in almost 90 percent of the branches the cash holding limit is very less.

4. Shri Pratip Chaudhuri, Former Chairman of SBI, gave a befitting reply to Zee news Anchor who was literally accusing the Bank employees. Shri Chaudhuri gave the factual position, when RBI is not supplying adequate currency, how can the Bank employees dispense cash.

5. When Print and Electronic Media are not supporting the bank employees, social Media is playing a good role. Many persons are appreciative of the positive role played by bank employees, who have stood with the Government and their respective Banks, at this time of crisis.

6. Finally, every dark cloud has a silver lining and there is light at the end of even the darkest tunnel. We are beginning to see the silver lining and light. Just a matter of time.

ALL OF YOU ARE REQUESTED TO SHARE THIS POST, SO THAT MORE PERSONS CAN READ THIS AND KNOW THE FACTS.

RBI/2016-17/189
DCM (Plg) No. 1859/10.27.00/2016-17

December 19, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks

Dear Sir,

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes (Specified Bank Notes) - Deposit of Specified Bank Notes (SBNs) into bank accounts

Please refer to Circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. On a review of the provisions ii, iii and iv at C of Para 3 dealing with credit of the value of SBNs into bank accounts it has been decided to place certain restrictions on deposits of SBNs into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016 as indicated below:

Tenders of SBNs in excess of ₹ 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed.

Tenders of SBNs up to ₹ 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than ₹ 5000 are made in an account and such tenders taken together on cumulative basis exceed ₹ 5000 they may be subject to the procedure to be followed in case of tenders above ₹ 5000, with no more tenders being allowed thereafter until December 30, 2016.

It may also be ensured that full value of tenders of SBNs in excess of ₹ 5000 shall be credited to only KYC compliant accounts and if the accounts are not KYC compliant credits may be restricted up to ₹ 50,000 subject to the conditions governing the conduct of such accounts.

The above restrictions shall not apply to tenders of SBNs for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.

The equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of Identity.

The equivalent value of specified bank notes tendered may be credited to a third party account, provided specific authorisation therefor accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering, as indicated in Annex-5 of our circular cited above.

2. Please acknowledge receipt.

Yours faithfully

(P Vijaya Kumar)
Chief General Manager

[shiv]

India should be suitably contrite, the great havard business review trashes the deMo scheme. Another "Indian" takes pride in running down his country.

It's true that opinions are like assholes, everybody has one.



https://hbr.org/2016/12/indias-botched- ... harvardbiz

One thing the author does not understand is that the cash economy was benefited by digital India. Maybe he does not know.

When I was in the UK I had an account in NatWest. I could use only NatWest ATM. Barclays, Bank of Scotland etc were out of bounds. I returned to india thinking my ATM days are over. But I was amazed at the rapid pace at which ATMs were set up and interlinked in a huge country like India so that I could sit in Shillong with an SBM ATM and make a Canara bank account withdrawal from Bengaluru, Kerala

So the claim that digital India has not touched citizens is specious. Hopefully demonetization will go the next step up. Anyone who has relatives in phoren will know that NRIs lived in a world where they had and preferred land lines. India skipped the land line phone stage and PC stage and has jumped into mobiles and very quickly smartphones. Mobiles can be ATMs.

Claiming that India is not ready is bullshit. I have a dozen relatives who "stayed behind" saying "Computers are not for me". "Smartphones are not for me" Even before Demonetization they were bulldozed into joining the revolution. There will be resistance by those who lose the most in a cash economy. Those who lose nothing and those who gain will simply move on.

[shiv]

Times Now has become anti BJP after Ornob left. They are constantly showing people complaining about the Rs 5000 limit.

No matter what people say it is my view that banks have to do extra work if a person goes every day to the bank to deposit Rs 5000 in old notes for 10 days. the banks can be more efficient by saying "Bring in all your notes in one lot, in one deposit on one day". No one can claim that he just "happens to be earning" Rs 5000 in old notes every day from Dec 20th to 30th. He should not be.

As for those who had retained old notes till the last moment. No one is stopping them It would be easier for them and the banks if they deposited it all in one go. Of course I am biased. I don't really give a damn about anyone who has waited so long. As a person I detest people who choose to arrive at airports or stations "just in time" or "just a bit late - hold on for 2 minutes". I like being early. But that is me. Personal choice

[kapilrdave]

What irks me is that the critics (genuine critics, not the media types because the latter are hopeless) are acting as if this is Modi's "personal project" for his "personal country" for which the people of the nation are being made to suffer. That is very very short sighted view bordering to idiocy.

This is bl00dy OUR NATION. We are evolving as a society. It is our responsibility to contribute to the evolution process. That might mean that we have to suffer some temporary pain, so what? Did the freedom fighters cared for their personal pain? Do the soldiers care for their personal pain?

Forget everything else. Why can't we suffer some pain today to give a brighter and safer society to our children to live in future? All the developed countries have gone cashless for a reason. Is it really hard to understand?

Those who keep questioning "what has Modi done to Pakistan who keeps killing our soldiers" as part of criticizing everything Modi, I ask those hypocrites this question.. "War with pakistan will attract a steep war tax on you. Are you still up for it?" Needless to say that they keep deflecting the question with various whatabouters. Care for Indian soldiers' lives goes only so far. That's how big hypocrites they are.

[Manish_Sharma]

Deconstructing The Half-Fiasco Of Note-Badli: Where Things Went Wrong
| R Jagannathan - December 20, 2016, 11:36 am |

With just over a week to go before we bring the curtains down on note-badli – the exchange of demonetised Rs 500 and Rs 1,000 notes for new ones – we now have enough facts from which we can deduce how the Narendra Modi government nearly ended up with a fiasco. One uses the word “nearly” because it is apparent that at least some of the pain could have been avoided with more careful planning and phasing of demonetisation. One also assumes that 20-30 experts couldn’t have been assembled to sort out all issues in advance for reasons of maintaining secrecy. But it also seems likely that some pain was unavoidable, no matter how well one planned.

The four starting facts we have to work on are the following: the number of Rs 500 and Rs 1,000 notes with the public as given out by the Finance Ministry in parliament (Rs 15.44 lakh crore as on 8 November); the Reserve Bank of India’s (RBI) reply to an RTI query, where it stated that it already had Rs 4.94 lakh crore of the new Rs 2,000 currency notes printed and ready on 8 November; the central bank also said that Rs 20.51 lakh crore was the value in these notes, Rs 11.38 lakh crore in Rs 500 notes and the balance Rs 9.13 lakh crore in Rs 1,000.

Lastly, we have the production capacities of the four note printing presses owned by the RBI and the government. These presses have a normal printing capacity of 2,400 crore pieces annually (24 billion pieces), stretchable to 3,600 crore pieces if worked 24x7. One can say that these presses, even assuming some inability to print to full 24x7 limit, should be able to push out some 200-300 crore pieces (ie, three billion) a month.

Assuming the numbers put out by the Finance Ministry and the RBI on 8 November are correct, one can deduce that about Rs 5 lakh crore of demonetised notes were already in the banking system, leaving only a potential Rs 15.44 lakh crore to be replaced. This implies that nearly a third of the money junked was already available for replacement, albeit in higher denomination Rs 2,000 notes. The problem was the deployment of this printed currency.

What we do not know – and which is essential to deciding whether there was poor planning or not – are the following.

One, the lead time the RBI got between the period the government informed it or consulted it on demonetisation, and the actual date of the announcement.

Two, the information gap on how long it would take to recalibrate the ATM machines, which were not capable of handling the new smaller-sized notes.

Three, the banking system’s capacity to handle large volumes of cash in the initial days of demonetisation.

Four, a poor understanding of where the cash shortages would surface first. The geographical spread appears to have been worst in Delhi and the northern states, and much less in the south.

We do not as yet have answers to these questions, but it is possible to arrive at tentative (and possibly speculative) conclusions on why the problems surfaced, and how much of it could have been avoided.

It is unlikely that the RBI did not know that ATMs would need to be recalibrated. It is thus likely that it was told very late about the decision, giving it little time for responding to the initial cash rush. Clearly, the government needed to have taken at least one of two RBI officials into confidence to figure out the problems and how they could have been handled.

The first conclusion thus is that the RBI was clueless on the government’s intent where it could contribute usefully to handling the fallout of the note shortage.

Once the ATM recalibration challenge was evident, bank counters became the primary channels to start distributing the new Rs 2,000 note – and they were simply too slow with it. They had to handle too much in too little time. They needed to create queues for the exchange of old notes, for accepting large volumes of deposits and also handle withdrawals upto the prescribed limit (Rs 24,000 per week).

The second conclusion is that the physical handling capacity of banks to deal with so much cash in so little time was simply grossly underestimated. Simple math at the top levels of the central bank could have given out better estimates of the time required, and also flagged the ATMs issue.

A week ago, RBI Deputy Governor R Gandhi disclosed that the central bank had issued Rs 4.61 lakh crore to the public through bank counters and ATMs, and of this number 170 crore (1.7 billion) pieces were largely in Rs 2,000 notes (and some Rs 500s), and 2,010 crore (20.1 billion) pieces in smaller denominations (Rs 10, Rs 20, Rs 50 and Rs 100).

This means the bulk of the printing capacity was devoted to smaller denomination notes, and not Rs 500s which were sorely needed. If 2,010 crore notes of smaller denominations were given out in the one month post-demonetisation, and the maximum printing capacity is around 300 crore pieces per month, the bulk of the first month may have been used to print smaller notes, with very little Rs 500s being printed.

So, conclusion three: This is where the major problem seems to have occurred. Working backwards from what we witnessed in the first two weeks of demonetisations, when the ATMs were being recalibrated, Rs 100 notes vanished quickly as these were the only notes the machines could then handle. This may have forced the central bank to shift printing to smaller denomination notes, including Rs 100s, but without the middle denomination – Rs 500 – being available, these smaller denominations were being disbursed very slowly through bank counters.

So, by the second week of demonetisation, everyone saw the long queues outside bank counters and ATMs without cash and concluded that they had to hoard as much cash as they could lay their hands on.

The irony is this: the ATM problem made it impossible to disburse the cash actually printed (Rs 2,000) and the slow rate of disbursals through bank counters ensured that very little cash was actually going to the public, accentuating the shortage psychology. Indians know that once something is in short supply, they must hoard for difficult times.

The question is: could things have been handled better?

Some tentative solutions, made entirely possible by hindsight, seem plausible.

First, assuming there was going to be an ATM problem, the demonetisation could have been implemented in two phases with only Rs 1,000 notes being de-legalised in round one. This would have enabled the banks to disburse new Rs 2,000 notes in adequate quantity, while ATMs were being recalibrated. We are assuming that the decision to reduce the sizes of the new notes was deliberate and necessary to prevent quick counterfeiting.

This would have sent those holding black money to deposit Rs 1,000 notes and shift their holdings to a mix of Rs 500 and Rs 100 notes. But this would have set the stage for the next phase, say, by early December, when Rs 500 notes could have been demonetised, and the ATMs would have been ready to disburse Rs 2,000 in plenty, and the new Rs 500s and Rs 100s in reasonable quantities. More black money holders would have been caught red-handed with the notes they recently converted to old Rs 500 notes.

The ATM recalibration gap also ensured a lot more hanky panky at the banks’ end, since bankers were the prime conduits for the distribution of the new Rs 2,000 notes. The over-dependence on bankers ensured adequate space for corruption. This is one reason why we saw scores of bankers being suspended and their beneficiaries arrested for grabbing the new notes while the public was left standing in the sun in serpentine queues in some cities.

Second, attempts to market digital cash and e-banking could have been rehearsed well in advance without letting go of secrecy.

The conclusion is simple: half the hardships to the people could have been avoided by doing a two-stage demonetisation, and with a better understanding of cash handling logistics post 8 November. But not all the problems could have been foreseen.

Hence the verdict: half-fiasco.

http://swarajyamag.com/economy/deconstr ... went-wrong

[Nitesh]

So the demonetized value is more then 20 lakh crore not 14.x or 15.x lakh crore on which the discussion was going on

The four starting facts we have to work on are the following: the number of Rs 500 and Rs 1,000 notes with the public as given out by the Finance Ministry in parliament (Rs 15.44 lakh crore as on 8 November); the Reserve Bank of India’s (RBI) reply to an RTI query, where it stated that it already had Rs 4.94 lakh crore of the new Rs 2,000 currency notes printed and ready on 8 November; the central bank also said that Rs 20.51 lakh crore was the value in these notes, Rs 11.38 lakh crore in Rs 500 notes and the balance Rs 9.13 lakh crore in Rs 1,000.

[Sachin]

very harsh of you to blame bankers for policy failure. Here is a whatsapp post circulated in my group from RBI GM

+1. But the black sheep among the banking staff needs to get exposed and good exemplary punishments meted out. But tarring them all with the same brush may not be right. AIBEA has also planned for a demonstration at December end, but I don't think they are planning to stop work.
Demonetisation: bank unions plan demonstrations on Dec. 28
The unions have demanded supply of adequate cash to all banks and branches, restoration of all ATMs without further delay and transparency in cash supply to banks.

“If the RBI is not able to supply adequate cash to banks, then decision should be taken to suspend cash transactions in the bank branches till sufficient cash is supplied to banks,” the statement said.

They also demanded a CBI inquiry into the cases of seizure of huge number of new currency with some persons when bank branches are cash starved.
....
They also demanded proper compensation to employees and officers for their extra work/late sittings done in the last more than a month.
On the bolded part, SHQ did mention that staff working on Nov 10th and the week end after that, all would be receiving over time wages (double the daily pay?).

No matter what people say it is my view that banks have to do extra work if a person goes every day to the bank to deposit Rs 5000 in old notes for 10 days. the banks can be more efficient by saying "Bring in all your notes in one lot, in one deposit on one day". No one can claim that he just "happens to be earning" Rs 5000 in old notes every day from Dec 20th to 30th. He should not be.

The RBI circular put up a few posts above, has thought about the scenario mentioned above. Even if a poor person comes every day with Rs. 4999 to deposit (in old 500 & 1000, then the clerk would have to check the cumulative deposits made by him, and the moment it cross Rs.5000 this facility is stopped till Dec 30th.

[RajeshG]

Yes certainly. R Jagannathan refers to the tribune article below.

http://www.tribuneindia.com/news/nation ... 38923.html

First time i am hearing 20 l cr figure.

[kapilrdave]

Assuming the numbers put out by the Finance Ministry and the RBI on 8 November are correct, one can deduce that about Rs 5 lakh crore of demonetised notes were already in the banking system, leaving only a potential Rs 15.44 lakh crore to be replaced. This implies that nearly a third of the money junked was already available for replacement, albeit in higher denomination Rs 2,000 notes. The problem was the deployment of this printed currency.

Is this what they mean by "double counting"? Counting the notes which were already in the banking system on 8th Nov?

If this is true, and the amount in demonetized notes were really 20L cr, then Gov has already earned nearly 10 LAKH CR by DeMo!!!!

[Vikas]

...
Those who keep questioning "what has Modi done to Pakistan who keeps killing our soldiers" as part of criticizing everything Modi, I ask those hypocrites this question.. "War with pakistan will attract a steep war tax on you. Are you still up for it?" Needless to say that they keep deflecting the question with various whatabouters. Care for Indian soldiers' lives goes only so far. That's how big hypocrites they are.

OT
Saar, No one said anything about why Pakistan keeps attacking us and kill us in various ways till Sh.ModiJi himself made lot of song and drama about it before elections and raised expectations.
As far war with Pakistan, I guess you would support Italian Mafia's decision on not going to war over Mumbai since we are nothing but a bunch of big hypocrites.
Back to Demonetization which is turning out to be a exercise in pain with no clarity on How it would help the future.
Modi Ji wants poor to embrace digitization when the poor man can't even afford 2 square meal for his family and GoI expects him to be on his 4G smart phone doing financial transactions. Talk about misplaced priorities.

[kapilrdave]

OT
Saar, No one said anything about why Pakistan keeps attacking us and kill us in various ways till Sh.ModiJi himself made lot of song and drama about it before elections and raised expectations.
As far war with Pakistan, I guess you would support Italian Mafia's decision on not going to war over Mumbai since we are nothing but a bunch of big hypocrites.

I don't know why you would say that. I don't feel it worthy enough to even respond, more because it's OT anyways.

Back to Demonetization which is turning out to be a exercise in pain with no clarity on How it would help the future.
Modi Ji wants poor to embrace digitization when the poor man can't even afford 2 square meal for his family and GoI expects him to be on his 4G smart phone doing financial transactions. Talk about misplaced priorities.

May be poors are really suffering or may be not. But are YOU in favor of this exercise personally? Are you ready to suffer some hassle for this personally? I think that's what matters.

[Sicanta]

...
Those who keep questioning "what has Modi done to Pakistan who keeps killing our soldiers" as part of criticizing everything Modi, I ask those hypocrites this question.. "War with pakistan will attract a steep war tax on you. Are you still up for it?" Needless to say that they keep deflecting the question with various whatabouters. Care for Indian soldiers' lives goes only so far. That's how big hypocrites they are.

OT
Saar, No one said anything about why Pakistan keeps attacking us and kill us in various ways till Sh.ModiJi himself made lot of song and drama about it before elections and raised expectations.
As far war with Pakistan, I guess you would support Italian Mafia's decision on not going to war over Mumbai since we are nothing but a bunch of big hypocrites.
Back to Demonetization which is turning out to be a exercise in pain with no clarity on How it would help the future.
Modi Ji wants poor to embrace digitization when the poor man can't even afford 2 square meal for his family and GoI expects him to be on his 4G smart phone doing financial transactions. Talk about misplaced priorities.

Just so you know, a normal feature phone is more than enough. Almost everyone, who does not have a smartphone, has one.

[SaraLax]

Members this is so so so bad !.
Bloody Indian Govt..... How dare it attempts to rescue its bloody bleeding banks instead of allowing them to collapse .

Note ban: Rs. 38,200 cr bank bonanza in H2 via treasury gains

“Softening of yields due to surplus liquidity could help the NPA-saddled banks register Rs. 38,200 crore in potential treasury gains in the current financial year,” said the report by India Ratings.

This is a “significantly large” number considering the entire banking sector had posted a Rs. 23,600-crore profit in 2015-16, while state-run lenders, which control over two- thirds of the system reported a Rs. 17,700-crore loss, it said.

The rating agency said the development comes at a time when the banking sector is facing challenging conditions and their profitability levels remain weak owing to continued pressure on asset quality and weak loan expansion.

The gains can help the capital-starved banks buffer up their capital levels, while the well-capitalised ones should focus on upping their provision coverage ratios, which have shown a declining trend recently, it said.
.
.
.
.
India Ratings said mid-sized state-run lenders, which incidentally are the most impacted ones by the asset quality troubles, will register larger treasury gains.

“Some mid-sized public sector banks witnessed an increase in their investment portfolios in recent quarters on account of challenges with regard to the deployment of incremental deposits. The yield compression has proved to be a boon for them.”
.
.
.

Notebandi ko zaroor bandh karna hai !!!
Roll back Notebandhi !!!!

[hanumadu]

On the black money front, I feel that a good chunk of it has got "laundered" during the exchange cycle. At that time, I don't think so the banks were able to track of all the exchanges and who did them.

Only 40000 crores were exchanged in total. If you count out the genuine cases, the laundered money would be lesser than that.

[nandakumar]

Went around in search of cash , all 8 ATMs I visited were out of cash , after that I gave up and went home

Its getting tiresome now

Will have to go to the bank to withdraw cash tomorrow

What is this fetish about drawing from an ATM? Drawing cash from a bank branch is just as good. Even if one's bank is located some distance away, it is less of a hassle, isnt it? Or am I missing something?

[SBajwa]

Good! Article! It deconstructs the paid media! (Lutyens presstitutes)

http://myvoice.opindia.com/2016/12/demo ... orter-say/

[Marten]

Went around in search of cash , all 8 ATMs I visited were out of cash , after that I gave up and went home

Its getting tiresome now

Will have to go to the bank to withdraw cash tomorrow

What is this fetish about drawing from an ATM? Drawing cash from a bank branch is just as good. Even if one's bank is located some distance away, it is less of a hassle, isnt it? Or am I missing something?

If you need only 2-4k, an ATM is more convenient. Lines at banks appear to be the hurdle.

[Chandragupta]

...
Those who keep questioning "what has Modi done to Pakistan who keeps killing our soldiers" as part of criticizing everything Modi, I ask those hypocrites this question.. "War with pakistan will attract a steep war tax on you. Are you still up for it?" Needless to say that they keep deflecting the question with various whatabouters. Care for Indian soldiers' lives goes only so far. That's how big hypocrites they are.

OT
Saar, No one said anything about why Pakistan keeps attacking us and kill us in various ways till Sh.ModiJi himself made lot of song and drama about it before elections and raised expectations.
As far war with Pakistan, I guess you would support Italian Mafia's decision on not going to war over Mumbai since we are nothing but a bunch of big hypocrites.
Back to Demonetization which is turning out to be a exercise in pain with no clarity on How it would help the future.
Modi Ji wants poor to embrace digitization when the poor man can't even afford 2 square meal for his family and GoI expects him to be on his 4G smart phone doing financial transactions. Talk about misplaced priorities.

Replied in GDF - Great Indian Drama Thread.

[Marten]

Funny but relevant point. Each day we ask the security guards about the ATM status. Always heard only 2k. This evening, asked a neighbour about their situation. He said am happy we're getting change for last two weeks. Since I had also withdrawn from the same atm, was surprised. Turns out none of us even considered there might be change so never entered any other amount but 2k. This retired gent has been the source of change for all the unskilled staff and shop boys etc. He had a good laugh at my expense.

[hanumadu]

Assuming the numbers put out by the Finance Ministry and the RBI on 8 November are correct, one can deduce that about Rs 5 lakh crore of demonetised notes were already in the banking system, leaving only a potential Rs 15.44 lakh crore to be replaced. This implies that nearly a third of the money junked was already available for replacement, albeit in higher denomination Rs 2,000 notes. The problem was the deployment of this printed currency.

Is this what they mean by "double counting"? Counting the notes which were already in the banking system on 8th Nov?

If this is true, and the amount in demonetized notes were really 20L cr, then Gov has already earned nearly 10 LAKH CR by DeMo!!!!

As per SBI, money deposited with co op banks are in turn deposited with SBI or other banks. That demonetized currency is reported by both the co op banks and the parent banks and counted twice. I think such amount would be small and will not affect the overall figures much.

[Bart S]

If you need only 2-4k, an ATM is more convenient. Lines at banks appear to be the hurdle.

Not at private banks at least. Under 10 mins is the norm at the banks that I have been to, plus you can stand in an AC environment while you wait your turn.

Of course there might be other compulsions for standing in an ATM line like being from out of station or not having a chequebook etc. There are also folks who are in the banking system but have no exposure to the functions of the bank, they have a salary account where they get their salary credited and an ATM/Debit card (that they use only as an ATM card) and all they ever do with their account is withdraw cash using an ATM.

[shyamal]

I have withdrawn twice from ICICI bank since 10th Nov.
I failed a few days when I reached around mid-day(the time of the day convenient for me).
The two days I succeeded - I reached at 9.30 am. There was hardly a line of 4-5 people each time.

[UlanBatori]

Modi Ji wants poor to embrace digitization when the poor man can't even afford 2 square meal for his family and GoI expects him to be on his 4G smart phone doing financial transactions. Talk about misplaced priorities.

In the famous traditions of (falsely attributed) Mohterma Mahrie Antwanitte (MA), may I ask a couple of pooch?

0. Why do these Poor Leave Home Without The American Express Card, hain?

1. How eej "poor man can't even afford 2 square meal for his family" finding all these 1000- and 500-rupee notes to go try to deposit, or why needing more than Rs. 24000 in cash withdrawals per week or Rs. 2000 per din?

2. Why is "circulating memo from RBI Governor" blaming it all on RBI giving same money to 900 private banks == 9000 public sector banks? Why doesn't the twerp do something to fix that instead of sending memos? IOW, that memo can't be from RBI Gov.

3. Ppl here may not have the leisure to read what I read: I read that the IAF's C-17s and IL-76s were on round the clock duty SHIPPING CURRENCY ALL OVER INDIA. News item was buried in a report on 1 C-17 and 1 IL-76 being taken out of that duty to send 900 Rapid Reaction Force personnel to Chennai for JL funeral. Just think of the magnitude of that transportation task. Use of airplanes must have disappointed soooooo many train robbers and other pakis!


4. (Mahrie Antwanitte alert )
How the pakistan is one to drag the desh into 19th century if ppl sit around
a) no intention of opening bank account: hole in ground/ sack under pillow preferred.
b) no intention of getting Aadhar card to get their rights and dues as citizens.
c) no intention of getting ATM, prefer dealings from hundi via 1000-rupee notes and gold bars onlee.
d) no intention of using pakistans, prefer to "go" in the fragrant open breezes despite guvrmand's best efforts to provide pakistans?
e) no intention of reporting fraud/bribes/extortion to law enforcement/ testifying at trials.
f) keep making dozens of bambini despite having no imaginable means of feeding/educating the same

Maybe there IS an argument for a slightly MA / Republican approach here, hain? It's not out of utter lack of empathy, it's out of sheer frustration at the lack of cooperation.

OTOH, I think this is mostly from the Liberal Sympathetic Classes who monopolize the Care About the Hard-Working Classes and Aam Aadmi, from their illegally-obtained black money flats in Juhu or Gurgaon. Any of the poorest of the poor whom I have encountered, who still try to work, have expressed strongest support for the govt, and stoically accept temporary suffering in the hope of a better tomorrow. Of course they refuse to accept the damn loose-ink pinko 2000-rupee notes, but that is a different story.

[shiv]

Digital ignorance of those with enough cash is causing them to whine. Those who had no cash before demonetization still have no cash and will try all means including digital.

That apart I am sure this mindless disbursing of 19 x Rs500 notes plus 5 x 100 notes for every 10,000 withdrawn per ATM and a daily limit of 20000 (?) encouraged a cash economy like nothing else.

Rs 20,000 per day is more than what most Indian earn in a month. But yes - go ahead "It's my money. I will use it as cash"
.
I think ATMs should give out a maximum of Rs 5000 with 2 x 500 and rest in 100s. Per day per transaction. ATM fees should be raised, and digital fees lowered and using cheque in bank should attract zero fees

[shiv]

ATMs have become expensive because every goddam ATM needs a guard. By law. reduce the withdrawal limit. Raise the withdrawal fee. Let the guards be paid for by the cash economy

[Dasari]

VIJAYAWADA: Andhra Pradesh Chief Minister N Chandrababu Naidu today said demonetisation was not what they wished for, adding he was still breaking his head as a solution to the ongoing (currency) crisis remained elusive.

"Demonetisation was not our wish but it happened. More than 40 days after demonetisation, there are still a lot of problems but yet there appears to be no solution," Chandrababu said addressing a workshop of Telugu Desam MPs, MLCs, MLAs and other leaders here today. ..

Read more at:
http://economictimes.indiatimes.com/art ... aign=cppst

I don't trust what this guy says. Behind the facade of forward thinking, he and his cronies are the biggest BM hoarders in AP. Two weeks before Nov8th he was in headlines advocating the banning of Rs 500/1000 notes. In fact YSRCP uses his statements as an evidence that he knew of demonetization. Now he back pedals (may be the latest rules are hurting his cronies).

Let me give some ground reality in AP. I completely agree with Sachin that there was a big leak in the BM during the first week where KYC was not strictly adhered to. The current daily fine tuning is absolutely necessary. There is still a lot of BM out there finding ways to convert. All white money is more or less converted. All the crying about rule changes is mostly BM specific. If they can avoid any BM pilferage next 10 days, I don't care if they tweak their rules on an hourly basis. When thousands of crooks are working all day to cheat the system working against govt, it is inevitable govt has to be continuously in reactive mode.

The situation in AP(mostly Vizag) is that there is no shortage of Rs 2000 anymore. You can get Rs 24000 with no issues. However there are no Rs 500. If Rs 500 also becomes available like Rs 2000, we would be over the hump. Everything will ramp up very fast. In fact people are sitting with lot of savings and in 2-3 months the economy will revert back to normal at a furious pace.

In the mean time Govt needs to continue the pressure on cashless transactions. After Dec 30, go after the deposits and in next 12 months extract at least Rs 50000 crores in penalties and back taxes from what was deposited. This is in addition to 1.5 - 2 lakh crores they may get out of forefeiting the BM.

[Dasari]

This is how the BM is still being converted and the reason for the heart burn, mostly driven by political parties in the background. This is a real example with no names. There is a Neta with about 50-100 party workers doing all the dirty laundry for him. Some are permanently employed and some are adhoc. What he is doing is to prepay them for next 12 months through old notes in advance by giving small amounts every day. The karyakartas everyday deposit the money as if it is their genuinely earned daily wages. The new rule is stopping this(making it harder). RBI and FM are not stupid to modify the rules. If I knew this, I'm sure they know lot more than me. Now the rule, along with strict KYC on larger deposit, putting the hoarders in deep trouble. There is only 2 lakh crores left out to be converted and most of it is with large BM hoarders, mostly political leaders.

You I'll also hear stories after Dec 30 of some poor people left with Rs 500-1000 notes to be converted as if they are waiting for 50 days to lapse them. Pappu will raise slogans on how some real BM hoarders converted their money but poor people left with old notes. Now you know where that money would be coming from. So the real battle would be in the last 2 weeks.

[UlanBatori]

Thx. Now I am able to figure out the undies-in-a-knot that I see in Economic Crimes Editorial page (ooh, the rage!!) Saying "What ROT! Banks have no Mawral Authority,they are just transactionl facilitators!{for BM goons I suppose} They have no right to ask customers where their deposit money came from" {But the See Bee Eye sure does!}

[Schmidt]

Went around in search of cash , all 8 ATMs I visited were out of cash , after that I gave up and went home

Its getting tiresome now

Will have to go to the bank to withdraw cash tomorrow

What is this fetish about drawing from an ATM? Drawing cash from a bank branch is just as good. Even if one's bank is located some distance away, it is less of a hassle, isnt it? Or am I missing something?

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Whats with words like fetish etc ?

You can withdraw from ATM after office hours

If you need to go to the bank , you have to take time off from work

Also , I very rarely go to the bank even otherwise

BTW , the ATMs I had referred to are all in the T Nagar area- Pondy Bazar , Nort Boag , GN Chetty Rd etc

Anyway will have to go to the bank today to withdraw cash , seems like no choice

[Sicanta]

Nabard plans to provide RuPay cards to over 34 million farmers, To deploy 200,000 PoS machines in 100,000 villages

http://www.business-standard.com/articl ... 974_1.html

Digital push to help small traders save up to 46% in tax: Govt

http://www.business-standard.com/articl ... 303_1.html

Apart from making tax saving, small traders would be able to build their books which may help them get loans easily, said FM

Over 70% rural citizens have adopted e-wallets: IT Ministry

http://www.business-standard.com/articl ... 201_1.html

Ordinance likely for wage payment via e-mode, cheque

http://www.business-standard.com/articl ... 103_1.html

[shiv]

This is how the BM is still being converted and the reason for the heart burn, mostly driven by political parties in the background. This is a real example with no names. There is a Neta with about 50-100 party workers doing all the dirty laundry for him. Some are permanently employed and some are adhoc. What he is doing is to prepay them for next 12 months through old notes in advance by giving small amounts every day. The karyakartas everyday deposit the money as if it is their genuinely earned daily wages. The new rule is stopping this(making it harder). RBI and FM are not stupid to modify the rules. If I knew this, I'm sure they know lot more than me. Now the rule, along with strict KYC on larger deposit, putting the hoarders in deep trouble. There is only 2 lakh crores left out to be converted and most of it is with large BM hoarders, mostly political leaders.

You I'll also hear stories after Dec 30 of some poor people left with Rs 500-1000 notes to be converted as if they are waiting for 50 days to lapse them. Pappu will raise slogans on how some real BM hoarders converted their money but poor people left with old notes. Now you know where that money would be coming from. So the real battle would be in the last 2 weeks.

Lovely thanks. Will cross post on Twitter

[yensoy]

ATMs have become expensive because every goddam ATM needs a guard. By law. reduce the withdrawal limit. Raise the withdrawal fee. Let the guards be paid for by the cash economy

Sir, if you recall the days before ATMs we used to line up at bank tellers with our brass tokens and stare at what was back then the marvel of technology, the LED signboard, in order to withdraw cash. ATMs were introduced by banks not for our convenience, but for theirs. Any impediment you introduce in letting people access ATMs will either grow the lines at bank tellers, or will make people reluctant to deposit their cash in banks.

Guards are unfortunately a sad requirement of our lax law and order situation - there are no ATM guards in other countries where policing is much tighter, in fact not even guards at banks. Someone has done the math and figured out that employing a guard is more expensive than dealing with the occasional hold-up, and a guard really can't stop a determined robber.

[Rishi Verma]

My Corporation Bank ATM hasn't functioned even once since D-Day! The bank crowd is at normal levels now. The guy at cash dispensing counter was saying they don't get much cash to fill the ATM. Whatever they are dispensing over the counter comes from other customers depositing... very strange Bank.

Now beginning to wonder if Corporation Bank cash is being diverted for VIP duty.

[habal]

yaar meri suno.

open a/c and make NEFT transfer from original a/c to that a/c in smaller banks like allahabad bank (in chennai or anywhere in south india), bank of baroda in anywhere south India. Andhra bank in lucknow. Kotak Mahindra in Jhumri tallayya. Tamil Nad Mercantile bank in Cochin, Kerala. Karnataka Bank in Tindivanam Chennai, SBT in Guwahati,

you get the idea.

the reason is all banks in a state are getting funds more or less equally. What that means is that the larger banks with more a/c's will be in disadvantage. What will Tamil Nad mercantile bank do if it gets 20 crore by RBI in Kerala. It doesn't even have a deposit base that will demand so much withdrawal.

who is going to question why RBI is doing what it is doing ? But this is what is happening.