Currency Demonetisation and Future course of Indian Economy

[jamwal]

http://timesofindia.indiatimes.com/indi ... 163232.cms

Amid rush for white money, Pune businessman converts cash into black

While several businessmen with hoards of black money have come under the lens for exchanging illegal tenders with legitimate currency notes using intermediaries, here is a case of a Pune-based industrialist who has been caught converting his legitimate income into black money—the transaction is over Rs 200 crore.
The Directorate General of Central Excise Intelligence (DGCEI) has registered a case against a Pune industrialist manufacturing automobile parts. During a raid on the industrialist's residence in Kalyani Nagar in Pune on Thursday, officials seized Rs 13 lakh in new currency notes besides documents authenticating his involvement in more than Rs 200 crore transferred to his agents through the banking channel using his own company accounts and legitimate income.
A source said subsequent raids on one of the intermediaries connected to the industrialist revealed the agent had been raising bogus bills for supply of auto parts. The modus operandi showed the industrialist in question had made payments based on bogus bills raised by the agent. The agent then withdrew the payments from banks and delivered the cash to the industrialist.
Based on these excess payments of Rs 200 crore, the industrialist had also claimed and received Rs 20 crore in duty drawback from the government, which is again a case of fraud the authorities are looking into. The DGCEI officials raided at least seven premises of the industrialist and his agents and seized several key documents leading to the unravelling of the central excise duty fraud.

[Suraj]

On the topic of 'using thugs to enforce RE deals in BM'' , I will point out that the entire DeMo episode could have been stopped on Nov 9 itself by political party thugs who could enforce failure of DeMo by ransacking banks and preventing deposits, forcing acceptance of old notes etc . But no, nothing could be done because of the small detail that they need to be paid...

The argument now is that private sector thugs can do what public sector political party thugs could not do , despite the same constraint . Sure, make it happen

[jamwal]

http://indianexpress.com/article/india/ ... r-4443882/

Eight foreign firms listed for supply of note paper
The Letters of Intent along with the precise quantum of orders to each foreign firm would be finalised soon.

The remonetisation drive — and the frantic printing of banknotes — has brought some Christmas cheer for some of the world’s largest currency paper suppliers. Over Thursday and Friday, principals of eight foreign firms were in Bengaluru to finalise bids for contracts of 27,500 metric tonnes of paper for lower denomination currency notes to be supplied to India from April-December 2017.Company officials who were part of the tendering process at the head office of the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) told The Sunday Express that first the technical, and then the financial bids of eight of the nine firms who were invited for the limited tender were examined, and orders finalised. The Letters of Intent along with the precise quantum of orders to each foreign firm would be finalised soon.
The contracts have been finalised for printing currency notes mostly of Rs 10, Rs 20, Rs 50 and Rs 100 denominations, giving a clear signal that the Rs 2,000 and Rs 500 notes would be printed on banknote paper manufactured in India.
Some of the largest companies trading in banknote paper from Germany, Switzerland and Italy figure in the list of successful bidders, but the British banknote giant, De La Rue, was conspicuous by its absence. De La Rue had been supplying huge quantities of currency paper to India for decades, but in 2010-11 lost its security clearance after failing to meet some security parameters. It is understood that the company did not get security clearance from the Ministry of Home Affairs for the current tendering cycle due to the details of commissions that were paid by it to persons named in the Panama Papers, published by The Indian Express in April.
While details of currency paper contracts are not made public, The Sunday Express has learnt that the eight firms that will share the massive contract are Lanquart from Switzerland, Komsco from South Korea, Arjowiggins from France, Crane from Sweden, Goznak from Russia, PT Pura from Indonesia, Fabriano from Italy and Louisenthal from Germany. Representatives of all the firms were present in Bengaluru for the scrutiny of technical and financial bids.
Although the order may not be the largest ever placed by India — paper for higher denominations of currency is now manufactured domestically — company officials say demonetisation, and the urgency to print new banknotes at the four currency presses, have resulted in the rush to place the high-volume order before the Christmas break.

[UlanBatori]

HA! UBSCE (Ulan Bator Simulated Criminal Enterprises) is seen to be superior again.

OTOH, WM should open up vast markets in real estate in sheer spectrum of buyers, so things should move faster. Not quite sure how this higher spectrum of demand will translate into price, but overall, real estate prices should start rising since now the full price is shown.

Sarkar needs to bring down the top bracket fast, to make WM more attractive than using BM and the periodic amnesties. I mean, if my tax rate is 50% anyway, isn't it smarter to just keep making money on BM until an amnesty comes along, and then go and and confess and pay 50%? At 12% per saal, compounding makes it very attractive, and essentially risk-free.

What I want to know is, what happens to the personnel record of, say, an Aphsar who falls on the mercy of the gubrmand and pays 50% on, say, 1 crore of bribes. Does the **** get off free? With half a crore to pay as supari to wreak vengeance on whoever ratted on him/her? Something very wrong here.

I hope the GOI just reneges on this amnesty in due course, and files charges on these sh1ts. Not IT charges, but criminal charges on other things. I bet a PIL would succeed: there is no constitutional validity for these "amnesties".

Hound them to death, no mercy needed. In China they would get a bullet to the head after a few months of pleasantries. (watching Mao's history on TV right now).

[NRao]

Those other tricks you listed, none of them has the simplicity and precision of cash when used in a transaction. They are harder to understand, have high overhead, are unstable, and risky. I would bet that none of them is as viable as plain old cash. I see cash-based illegal transactions making a comeback in the years after this demo episode. On the other hand, RBI can keep a check on these by controlling the number of notes it keeps in circulation.

Interesting take.

The demo cycle could also come back. In an economy with a far more observable currency.

BTW, you made an observation that Indians trust the gov. In which case do you see the come back you mention, being as large a part as it has been?

After all, one of the end points of this demo is to nail those that have not being paying taxes. The smaller or smallest players. If this segment now starts paying taxes the problem of coming back would be uch more difficult I would think. ????

[hanumadu]

HA! UBSCE (Ulan Bator Simulated Criminal Enterprises) is seen to be superior again.

OTOH, WM should open up vast markets in real estate in sheer spectrum of buyers, so things should move faster. Not quite sure how this higher spectrum of demand will translate into price, but overall, real estate prices should start rising since now the full price is shown.

Sarkar needs to bring down the top bracket fast, to make WM more attractive than using BM and the periodic amnesties. I mean, if my tax rate is 50% anyway, isn't it smarter to just keep making money on BM until an amnesty comes along, and then go and and confess and pay 50%? At 12% per saal, compounding makes it very attractive, and essentially risk-free.

What I want to know is, what happens to the personnel record of, say, an Aphsar who falls on the mercy of the gubrmand and pays 50% on, say, 1 crore of bribes. Does the **** get off free? With half a crore to pay as supari to wreak vengeance on whoever ratted on him/her? Something very wrong here.

I hope the GOI just reneges on this amnesty in due course, and files charges on these sh1ts. Not IT charges, but criminal charges on other things. I bet a PIL would succeed: there is no constitutional validity for these "amnesties".

Hound them to death, no mercy needed. In China they would get a bullet to the head after a few months of pleasantries. (watching Mao's history on TV right now).

I think the amnesty scheme that ended on sep 30 only promises no civil cases but criminal cases will be pursued. Bribery is a criminal offence in India.

[Suraj]

Suraj, In latest tweet, LokSatta leader JP says that BM is about Rs 10000 cr/day. He could be wrong, but typically his numbers are reliable. This translates to Rs 36 lakh crore/year or about $500B. How does this reconcile with your numbers?

Just one more person making another estimate of black money economy... I used PPP scale earlier . On the nominal scale his number is 20-25% of GDP, which is within the 20-50 range I guesstimated.

[Suraj]

I think the amnesty scheme that ended on sep 30 only promises no civil cases but criminal cases will be pursued. Bribery is a criminal offence in India.

That's right . All the IDSs are for legitimate activities only . Even the new IT Act amendment is specific about this .

[Sachin]

One more wicket down..
Over Rs 51 lakh in 2,000 denomination notes seized in Iritty......{Kannur Dt, Kerala}
They found Rs 51.80 lakh in Rs 2,000 notes and Rs 100 notes for Rs 6,300 in the bags of Ranjith Salangi (24) and Rahul Adhik alias Rahul Ghatoo (22).....

[Prasad]

I thought we were switching to plastic notes? Are we going to print new notes on paper instead? Why?

[shiv]

http://timesofindia.indiatimes.com/indi ... 163232.cms

Amid rush for white money, Pune businessman converts cash into black

Does this modus operandi remind anyone of posts made on this very thread?

The chartered accountant, who was picked up from his hotel Green Lotus in Dwarka Sector 23, had no known sources of income to justify the properties he had acquired, said an officer. The modus operandi was to float a new company, buy property in the company name and declare the company sick.

[pankajs]

Some one who kept starting money losing business to make sure he did not have to pay taxes? Some one who challenged the forum to prove that he had black money?

Well that makes me wonder. Why would someone, who per his own thinking, has successfully managed to evade taxes and is confident of his workaround would be so worked up by the DeMo?

[KLNMurthy]

Those other tricks you listed, none of them has the simplicity and precision of cash when used in a transaction. They are harder to understand, have high overhead, are unstable, and risky. I would bet that none of them is as viable as plain old cash. I see cash-based illegal transactions making a comeback in the years after this demo episode. On the other hand, RBI can keep a check on these by controlling the number of notes it keeps in circulation.

Interesting take.

The demo cycle could also come back. In an economy with a far more observable currency.

BTW, you made an observation that Indians trust the gov. In which case do you see the come back you mention, being as large a part as it has been?

After all, one of the end points of this demo is to nail those that have not being paying taxes. The smaller or smallest players. If this segment now starts paying taxes the problem of coming back would be uch more difficult I would think. ????

Yes, it could be that there will be a comeback, but of lesser magnitude due to a cultural shift. Also, the currency notes department of RBI may come to the fore and learn to calibrate the quantity of various denominations in circulation so as to keep the amount of corrupt transactions within some acceptable range, meaning that next time(s) there is no need for a sweeping measure like demo.

It is the difference between curing a disease and managing the disease after first performing surgery to remove the tumor.

The price paid is vast potential for government abuse of common man's freedoms. The price is mitigated if public believes it has ways of making the government decent and honorable. Maybe quaint sentiments to some, but no human-made and human-executed system can survive indecency and dishonorableness. So it is not crazy to premise the system on decency and honorableness as safeguards for people's freedoms.

[UlanBatori]

The concern about privacy and freedoms is correct, but it is about 15 years too late. Governments all over the world have taken to "ungli" with extreme happiness. Every email is now presumed vacuumed and read by 3 or more national intel agencies - and preserved until Doomsdin on some server or other. Tax documents are happily shared between governments - and cross-checked in totally ungli form (i.e. every piece of data is available independently shaken out, no need to print and (wo)manually read every sheet.) Your bank accounts are known to the governments, and they know enough to check the precise balance. If you lie on your tax forms on the maximum amount in any account in a year, they can get you for that.

KYC tells them everything about you.
FATCA tells them even more.
If you go to deposit phoren money, you have to provide explanation of origin (per IndusIndiot bank, where I don't put phoren money for that reason).

Aadhar even tells them your Fate as in DNA.

So if u pay or receive money digitally, well, it is no more or less private than your tax info. Or other indiscretions.

Maybe one should just send an email to the tax ppl asking for recommendations on the best (Lahore) establishment in town, the best source for hashish, going rate of bribes for electric line repair, etc. At least that way u will be using "govt approved" outlets.

By Appointment to Taap Babus oph Gubermint Onlee

[Lisa]

This is completely strange tabloid article
http://www.zerohedge.com/news/2016-12-2 ... lice-state

Is Modi Losing Support?
Modi enjoys very strong support from non-resident Indians (NRIs). In the past Indians living in the UK and the US were often asked about snake-charmers, cows and elephants on the streets of India. At one point India briefly came to be seen as the rape-capital of the world, after a number of rapes cases got international exposure.

Being tribal, NRIs could not detach themselves from what was happening in India, and felt a deep need to change perceptions about the country. In the eyes of NRIs, Modi has put India on the international map, making it look modern and progressive.

While most people around the world don’t really care about the economic non-entity of India, Modi convinced NRIs that Obama and Putin were dreaming of Modi every night. Modi gave these self-confidence-lacking NRIs vicarious confidence in their place of origin. NRIs support Modi for the emotional crutches he offers them, not because they really care for India.

Members of India’s middle class love to copy NRIs, to make sure they come across as modern and cool. On top of this, Indians have for a long time craved a strong, firm leader, someone to relieve them of self-responsibility. Modi’s huge backing among members of the salaried middle class remains firmly in place.

About the above author/s

https://www.bloomberg.com/news/articles ... egade-blog

Why would they write such a thing?

[Rishi Verma]

Action Against Be-nami Properties Next

NEW DELHI: Vowing to carry forward the war against corruption and black money post-demonetisation, Prime Minister
Narendra Modi on Sunday said the government will soon operationalise a strong law to effectively deal with 'benami' properties and this was just the beginning.

[Marten]

A wealth tax is probably in the offing now. Basically, take land and property records digital and cross-verify each for the source of income for each purchaser over the past 15-25 years, to ensure corrupt officials and all properties that they hold in the name of third parties are sunk. This will be a burden but let's see the Lutyens elite react to something like that!

[Yagnasri]

A wealth tax on land and shares, bonds, gold and other valuables with no exemptions may be a good one to go. Property taxes in real terms have not risen in India for decades. We can offer 100% tax rebate if people are willing to invest the tax money in infra projects if there is any objection from larger sections of the society.If we do that now even at 1% per years is going to be huge income, and we can do away with IT altogether.

[Marten]

1% will lead to rebellion. Even a fraction would be enough. Not sure but i think we pay 0.03% at the moment but no one realizes how much money BBMP makes off this alone.

[NRao]

A wealth tax on land and shares, bonds, gold and other valuables with no exemptions may be a good one to go. Property taxes in real terms have not risen in India for decades. We can offer 100% tax rebate if people are willing to invest the tax money in infra projects if there is any objection from larger sections of the society.If we do that now even at 1% per years is going to be huge income, and we can do away with IT altogether.

Well. The purists, even in the US, have been saying that all along. Tax should be consumer based and not on income. There were a few that started that noise when the GST was passed. If the GST is highly efficient and effective, then at worst minimal income tax and at best none at all (perhaps only during national calamities or war)

[Schmidt]

Wealth tax would be a terrible idea

If you have a net worth of 10 cr , at 1% you would end up paying 10.00 lakhs every year

There could be many situations esp for retirees where they have significant wealth or just inflated paper wealth due to asset inflation but very little annual income

Plus , you have already paid income taxes and only then acquired assets - so it would be a double whammy

[hanumadu]

Wealth tax would be a terrible idea

If you have a net worth of 10 cr , at 1% you would end up paying 10.00 lakhs every year

There could be many situations esp for retirees where they have significant wealth or just inflated paper wealth due to asset inflation but very little annual income

Plus , you have already paid income taxes and only then acquired assets - so it would be a double whammy

Perhaps, wealth tax on only certain types of wealth like land, home, office space is ok but not on stocks. Unless you have sold the stocks you do not know if you have made a profit or loss, so tax on an already loss making investment will be double whammy.

But wealth tax on real estate will prevent buying up unproductive assets and waiting for them to appreciate. So people will be less inclined to buy land which does not provide any income, but may buy homes or commercial real estate so they can earn rent part of which can be used to pay the wealth tax. That will reduce speculative investment and hoarding land.

[UlanBatori]

"This will be a burden but let's see the Lutyens elite react to something like that!"

Imagine Steve Forbes' fit, thinking of the Immawrality and Sickening nature of that.

[UlanBatori]

Saudis deport Dawood flunky, NIA arrests him.

[pankajs]

http://indianexpress.com/article/busine ... y-4444629/
No intention of government to impose long-term capital gains tax: FM Arun Jaitley

"The speech has been misinterpreted in some sections of the media which have started speculating that this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions," he clarified.
------------>>

Rest of the stuff re: wealth tax, etc. too is speculation. Wait for GOI's word.

[Yagnasri]

I am not proposing wealth tax as a new one. Long back our house worth some 76k and we used to pay property tax of some 700/-. Almost 1%. Now the same is nowhere near 1%. Now property values increased insanely as we started to deploy BM into RE. Once the Urban Land Ceiling is gone, builders started having "Land Banks". The are not building anything there, but simply own the land for "future use" and their shares prices go up and up. In the meanwhile, the land left unused. Further, in places like Mumbai, we have 70/80 old people staying in a city centre along with offices and the people who work in those offices have to travel long distances to come to the office. We have huge buildings with a lot of land in many places like Bangalore with practically no one living in many cases. Further what is the need for almost every major corporation and offices to be in the congested places like Mumbai or Bangalore. Can't we have major corporates having offices in normal towns? A wealth tax on their offices in major cities forces them to relook into the places of their offices and thereby decongest the cities.

If you read what I posted, I even suggested that we allow people to invest entire tax amount into Infra projects. There can be other exceptions like people who pay Income Tax can be given a set off to the extent of the IT they pay. I mean if I am not paying any It and own 10 Cr worth building, and one who has no property or can not purchase the property because it is too costly, but still paying income tax in lakhs, then something need to done about it.

[Marten]

Wealth tax would be a terrible idea

If you have a net worth of 10 cr , at 1% you would end up paying 10.00 lakhs every year

There could be many situations esp for retirees where they have significant wealth or just inflated paper wealth due to asset inflation but very little annual income

Plus , you have already paid income taxes and only then acquired assets - so it would be a double whammy

Exempt all seniors for now - eventually the property will pass hands and be taxable. It should even handed and not a whole 100 basis points. If you tax property instead of income tax, plus have a consumption tax, basically the tax is evenly spread across folks instead of being concentrated on a few %.

[gakakkad]

This is completely strange tabloid article
http://www.zerohedge.com/news/2016-12-2 ... lice-state

About the above author/s

https://www.bloomberg.com/news/articles ... egade-blog

Why would they write such a thing?

this is the most racist junk I have seen in a while....stormfront material....it seems Modi is bringing out the inner pakistaniyat in goras ...I imagine the amount taqleef he has caused to the rest of the world....warning...BPs will rise if u read it...if u have time , the blog does have a comment section...u can demolish the garbage author if u have time....

[chetak]

First resort of all high profile arrested scoundrels

guarantee of restful sleep and 5 star surroundings rather than a bleak, roach infested cell

FORMER TN CHIEF SECY COMPLAINS OF CHEST PAIN, HOSPITALISED

Saturday, 24 December 2016

Former Tamil Nadu Chief Secretary P Rama Mohana Rao, whose house and office were searched by Income Tax officials in connection with a tax evasion probe post demonetisation, was today admitted to a private hospital here after he complained of chest pain.

Rao complained of pain in his chest at around 1 AM at his residence and was rushed to Sri Ramachandra Hospital in suburban Porur.
.............................

per coomi kapoor,

Raids, not aid

The joke in Tamil Nadu is that Chief Minister O Panneerselvam met Prime Minister Narendra Modi on Monday to ask for “aid’’ and Modi misheard it as “raid’’. The day after, Chief Secretary P Rama Mohana Rao’s house in Chennai was raided by the Income-Tax authorities. Actually, Rao, who accompanied Panneerselvam to Delhi, had reportedly got wind of an impending raid and tried unsuccessfully to get a central minister to intervene on his behalf. Incidentally, Lok Sabha Deputy Speaker M Thambidurai turned up for Panneerselvam’s meeting with Modi at his residence. However, Thambidurai could not attend the interaction between the PM and CM since no prior appointment had been sought on his behalf.

[shiv]

Exempt all seniors for now - eventually the property will pass hands and be taxable. It should even handed and not a whole 100 basis points. If you tax property instead of income tax, plus have a consumption tax, basically the tax is evenly spread across folks instead of being concentrated on a few %.

Will not work. Will not happen. IMO

[Suraj]

Can we not derail this thread with speculations about a wealth tax ?

[Marten]

Apologies Suraj. I believed it to be part to the future course, and rambled on. No more from me on this count.

[Suraj]

No worries. It can be discussed in the right place when it comes up.

[Kati]

Please forward the following info to the higher-ups.

Did an extensive survey of public sector bank branches in the eastern part of Kolkata, often talking to bank employees,
customers waiting in line, security guards, etc. over the last two weeks in person.

1. Absolutely no long line there any more. probably shorter than what it used to be before Nov. 9th. May be some people are
developing bank-hopping fatigue.
2. Most of the bank branches are giving that weekly Rs. 24000 per week in a single go. Only one bank is giving between
Rs. 4000 to Rs. 9000 per day (upto Rs. 24000 per week though) depending on the supply of cash.
3. Many ATMs are dry though; however they get cash in the evening, and run out of cash by the following early morning.

[My personal opinion after talking to people: Aam jantaa wants a steady supply of cash, even though at a lower volume.
Govt. could have calibrated all ATMs only for Rs. 100 notes, and dispense upto Rs. 1000 per day per account holder.
This would give the scene of normalcy with much less cash supply, giving vast majority people with something in pocket
to do grocery, shopping etc. The very sense of lack of cash is causing some panic, especially among the senior citizens.]

4. Bank employees are over-worked, over-strained; but they are doing a yeoman's job. In one branch, one day, one elderly
person tried to make a hue and cry about the cash shortage... and he looked around to get some moral support from about
another 20+ other customers in the bank. May be he is a TMC/CPM guy trying to test the water, but got a complete cold
shoulder from all others. Some even murmured that this DeMo move was long over-due. The guy still continued his verbal
rampage against NaMo/BJP...... Till then the middle-aged burly cashier lady sitting in the cash counter was quiet, giving
just stern looks to that angry guy. After a while she couldn't take it any more. - She stopped her cash counting, got up, and
gave a tongue-lashing to that angry fellow saying that they )bank people) are very aware how the country's economy was
crippled by the black money over the last six decades. The angry guy left the scene in a huff.

5. In another regional HQ of a bank, the head, familiar to me, gave me his precious time to explain how they are keeping
a close watch on some JDY accounts for questionable transactions. Then what he said surprised me. he bluntly told me that
Kolkata is the BM capital of India. I asked about Mumbai and Delhi. he said "nope" ... Kolkata is - for various reasons - ranging
from 34 long reign of LF, proximity to border and illegal border transactions, TMC's patronage, syndicate-baazi, etc

[Dasari]

RBI or FM hasn't released any numbers on how much demonetized notes were deposited since Dec 10th. This concerns me as they used to give update at least once a week. Are they silent because they are getting more deposits than expected and for fear that opposition may hammer them on this or is it a case of technical difficulties in giving accurate numbers and for fear of creating even more confusion?

[chetak]

*Mirza Galib Latest*
******************
*Hazaron Note The Aise Ki Har Note Pe Dam Nikle,*
*Bahot Nikle Mere Ghar Se Magar Phir Bhi Kam Nikle!*

*Nikalna Bank Se Noton Ka Sunte Aaye Hain Lekin,*
*Bahot Be-Abro Ho kar State Bank* *Se Hum Nikle!*

*Bacha Nahin Jeb Mein Sau Ka Note Ek Bhi Ab,*
*Hui Subha Aur Ghar Se ATM Khojte Hum Nikle!*

*Is Daur Mein Koi To Us Bank Ka Pata Bata De,*
*Jahan Bina Line Mein Lage Paise Le Ke Hum Nikle!*

*Is Muflisi Mein Nahin Hai Farq Jeene Aur Marne Ka,*
*Usi Ko Dekh Kar Jeete Hain Jis Dhan Pe Dam Nikle!*

*Khuda Ke Waaste ATM Mein Kutch To Daal De Zaalim,*
*Kahin Aisa Na Ho Yahan Se Bhi Khaali Jeb Hum Nikle!*

[Suraj]

RBI or FM hasn't released any numbers on how much demonetized notes were deposited since Dec 10th. This concerns me as they used to give update at least once a week. Are they silent because they are getting more deposits than expected and for fear that opposition may hammer them on this or is it a case of technical difficulties in giving accurate numbers and for fear of creating even more confusion?

RBI has no 'opposition' to worry about since they're a central bank and not a party, and 'getting more deposits' doesn't bother the government. Neither 'getting more' or 'getting less' matters - they're both good in their own ways, and ideally, GoI wants to get all the old notes back, so there's no point anyway. RBI's updates were seldom uniform. Every one of the three updates came out at somewhat random times between 1-2 weeks apart. They are also tasked with generating year end reports.

[Dasari]

This is hilarious. In Hyderabad airport, ATM dispensed Rs500 instead of Rs 100. ATM lost Rs8 lakhs but officials confident they will get the money back by creating reverse debits.

Hyderabad: ATM dispenses Rs 500 notes instead of Rs 100, loses Rs 8 lakh
DECCAN CHRONICLE.
Published Dec 26, 2016, 1:28 am ISTUpdated Dec 26, 2016, 1:28 am IST

As air travellers came to know that ATM was providing Rs 500 instead of Rs 100 notes, they lined up at ATM belonging to Kotak Mahindra Bank.
Staff from the bank rushed to the airport at around 9 pm and temporarily shut it down.

Hyderabad: The incomplete recalibration of an ATM in Rajiv Gandhi International Airport in Shamshabad led to users getting an unexpected windfall, as the ATM disbursed new Rs 500 denomination notes instead of Rs 100 notes, on Saturday evening.

As air travellers came to know that the ATM was providing Rs 500 instead of Rs 100 notes, they lined up at the ATM belonging to Kotak Mahindra Bank and in an hour as much as Rs 8 lakh was withdrawn from the machine.

Surprised at the rush, the authorities made inquiries and informed the bank’s officials of the glitch. Staff from the bank rushed to the airport at around 9 pm and temporarily shut it down.

An airport security officer said that a passenger withdrew Rs 2,500 and got one Rs 2,000 denomination note and five Rs 500 denomination notes instead of five Rs 100s.

“He got Rs 4,500 instead of Rs 2,500 with the technical error in the machine. As the news spread over the airport, air travellers lined up at the ATM for withdrawals,” he said.

All cash will be recovered
A Kotak Mahindra ATM in Rajiv Gandhi International Airport (RGIA) in Shamshabad disbursed new Rs 500 denomination notes instead of Rs 100 notes on Saturday evening. An official from the bank’s Shamshabad branch said it was a mistake by the outsourcing staff of the off-site ATM maintenance agency.

“They mistakenly kept Rs 500 denominations in the Rs 100 slot. We are verifying the matter and shall recover the excess amount withdrawn by customers as per the database after sharing it with the concerned customer’s bank,” the official said. The ATM maintenance agency refused to shoulder the blame, saying that the mistake was made by engineers who recalibrated the machine.

“It is not possible to keep currency of higher denominations in the slot allocated to lower denominations. In such cases the machine identifies the mistake and rolls back the currency into the ATM,” an officer said.

Explaining how the money can be recovered, Federation of Bank Employees secretary M.S. Kumar said, “The bank will raise debit with the account of the customer. The bank officials get the ‘General Print’ of transactions from the ATM maintenance agency. Based on the details of the bank customer, they inform other banks in cases where the customer is not from the home bank. They debit the amount from the customer’s account through ‘debit raise’. If the customer’s account is not having any balance, his account will show as minus balance with the debit.”

[UlanBatori]

Had to go and keep the fires burning under Steve Forbes' musharraf:

Keenly looking forward to January 24 issue of the magazine which will set a new record in pompous idiocy and well-deserved laughter. Yes, there were some lines at ATMs, mostly because the crooks hired minions to go try to convert black money. True, there was a shortage of 500-rupee notes for a couple of weeks. Things are back to much better than normal, millions have taken a quantum leap into cashless transactions (even I have learned it, courtesy of children who taught me eagerly). The Obama-backed Pakistani counterfeiting operation is feeling more sickened than Mr. Forbes, their clients are using mills to pulverize their product. Dozens of corrupt officials including the Chief Secretary (top bureaucrat) of TN caught red-handed, thousands more waiting for the letter from the tax man. People have a reason to feel that society decay has been arrested along with these crooks. PM Modi has promised more fun in Phase 2, for Mr. Forbes' clients in India (I think the word "ruin" was mentioned). Enjoy it, Mr. Forbes and his intellectual peer, Mr. Rahul Gaundy! :LOL

[Yagnasri]

Today I may meet some top people who involved in cash distribution. Will get some more information on how the thing is and they are going to be from Jan 2017. Rural areas may be a problem in some states like TN, KA and AP where influential people corner all the cash and do not allow access to mango people for some time. But from what I saw and discussed with same people, the minor problems will continue till Feb 2017.