Currency Demonetisation and Future course of Indian Economy

[chetak]

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of Rs 100 notes, they lined up at the ATM belonging to Kotak Mahindra Bank and in an hour as much as Rs 8 lakh was withdrawn from the machine.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 We are verifying the matter and shall recover the excess amount withdrawn by customers as per the database after sharing it with the concerned customer’s bank,” the official said.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.”

It's not hilarious but sickening that well to do people are involved in stupidity like this. It's no wonder that tax evasion/BM generation is considered a contact sport and everyone and his uncle blithely rip off the Indian state, whenever and wherever they can.

[Sicanta]

And most of these educated chaps probably know that the banks will get back what is owed to them. I would put down the rush to getting ones hands on new 500 notes.

Let's not tar everyone with the same feather.

[shiv]

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.

Beyond the fact that I became an economist 2 hours after demonetization the fact is I know zilch and can only speculate.

I was thinking as a mental game/thought experiment:

If influential people grabbed and hoarded a large volume of small denomination notes and prevented their redistribution, what would happen?

Assume that 2000 notes started appearing in plenty - with a shortage of change. People would either have to
1. Get notes changed at premium black market rates
2. Make purchases of nearly Rs 2000 at a time to get a little change
3. The government would respond by printing a greater proportion of Rs 100/50 notes but these would get sucked up by hoarders again

But even the black marketeers and hoarders have to participate in the economy, so to some extent they would be forced to part with small denomination notes - at least for their own purchases and as payments for services - and in exchange they would end up collecting Rs 2000 notes, for which only they had the change - because of a general shortage of small denomination notes. Ultimately hoarders would end up with a mix of small denomination and 2000 notes in their hoard.

To that extent - the 2000 notes serve as "markers". In the current situation anyone with a few lakhs in new 2000 notes could only have acquired them by means unavailable to the ordinary bank/ATM user. Does anyone know what format banks are dispensing 24,000 Rupees? 12 x 2000, or some other combination?

[Singha]

banks usually give 22k in 2k notes and 2000 in whatever small notes they have handy from 500 / 100 down to bundles of 20 or 10 notes.

[Yagnasri]

http://www.oneindia.com/india/why-rbi-r ... 00628.html

Interesting item. RBI recommended for this? So far no one said that. Have I missed any such statements? So far I thought this is a decision by the political leadership and there is no advice/recommendations from RBI. If it was recommended by RBI, then the NM took a huge risk and given no blame to the RBI. He could have told everyone that it is RBI which advised it and he was only following that advice. This is what a leader is required to have. Taking ownership and no blaming others for their decision. We need to respect him more than ever.

[Dasari]

And most of these educated chaps probably know that the banks will get back what is owed to them. I would put down the rush to getting ones hands on new 500 notes.

Let's not tar everyone with the same feather.

Agreed. It was an honest mistake due to communication gap between 3 Teams - ATM calibration team, Bank, and ATM distributing team. As far as customers are concerned it is more about necessity to take money out, especially new Rs500 notes. It is not like they could have gone to another ATM. There is a full record of who got what, so most of them know their account will be debited with whatever is dispensed.

[chetak]

And most of these educated chaps probably know that the banks will get back what is owed to them. I would put down the rush to getting ones hands on new 500 notes.

Let's not tar everyone with the same feather.

let us simply agree to disagree.

[Dasari]

http://www.oneindia.com/india/why-rbi-r ... 00628.html

Interesting item. RBI recommended for this? So far no one said that. Have I missed any such statements? So far I thought this is a decision by the political leadership and there is no advice/recommendations from RBI. If it was recommended by RBI, then the NM took a huge risk and given no blame to the RBI. He could have told everyone that it is RBI which advised it and he was only following that advice. This is what a leader is required to have. Taking ownership and no blaming others for their decision. We need to respect him more than ever.

RBI recommended it. But the final decision, the timelines, and secrecy are all govt decisions. So I don't think he would have been able to pass the buck to RBI. Besides, why would he pass such an historic opportunity to claim this credit. If this is successful ( high probability that it would be), this will generates at least two terms of good will from people.

[Yagnasri]

It is a fact that NM took some serious risk. He has acted like a statesman and not like a political leader.

[chetak]

It is a fact that NM took some serious risk. He has acted like a statesman and not like a political leader.

He is a strategic thinker unlike JLN and gang who did not think beyond the next skirt or the next opportunity to amass wealth for coming generations of family.

[Yagnasri]

NM is quite agile politically also and do not present a target to people to hit most of the time. Even when he gives them a target, it is the target he wants to give and hitting him there will be beneficial to him only. Like Mowth ki saudagar and now DeMo. C system initially did well not to attack him too much, but Pappu and his gang like Nurupam and Diggi type fellows started doing the same thing which NM wanted to do.

[UlanBatori]

I think the Jeenius was set up by the evil BeeJayPee. Someone sent him 400% halal copies of "RAA/ED notes of 2013-2014 diary entries by Re-Lie-Antz and Sahara" and Jeenius swallowed it whole and then repeated it. Kindergarten-grade setup onlee. Strange that NO mediots have picked up the Investigashun Trail / RTI etc.

[Yagnasri]

As per my recollection, this IT raid was done during UPA rule under a "unanimous tip off", and some lose pages were found there. They contain a lot of names including some constitutional authorities and also - Mrs S.Dixit - whom Pappu to presenting a future CM of UP. Income Tax department considered this as rubbish attempt and closed the matter. The cash found was correctly accounted for as the same was withdrawn from the bank from company account one day before the raid.

[chetak]

As per my recollection, this IT raid was done during UPA rule under a "unanimous tip off", and some lose pages were found there. They contain a lot of names including some constitutional authorities and also - Mrs S.Dixit - whom Pappu to presenting a future CM of UP. Income Tax department considered this as rubbish attempt and closed the matter. The cash found was correctly accounted for as the same was withdrawn from the bank from company account one day before the raid.

It was a clumsy setup to frame and trap NaMo. prashant bhushan, the cho thweet guy in whose mouth, butter would not melt, fired the first salvo and was severely snubbed by the SC. bhushan is fully complicit in this dirty tricks dept of the congis and also it's a no brainer as to why khujli got rid of this snake post haste.

pappu comes in per plan and thinking that bushan has setup this huge stage and the country was agog to see NaMo jailed. This followed by an enormous political victory, pappu declared PM for life by grateful nation, without any election and to be victoriously carried by a set of grateful congis and installed on the PM gaddi.

I cannot imagine anyone being so stupid and am now seriously wondering if pappu has something else up his eyetalian mafia sleeve.

the dairy also has named multiple times, salman kurshit, doggy singh and many other congi worthies.

[chetak]

‘Heat on Munde-led bank shows govt’s intent to act tough on cash stashers’

‘Heat on Munde-led bank shows govt’s intent to act tough on cash stashers’

Akhilesh Singh | Updated: Dec 25, 2016,

PM Modi and BJP chief Amit Shah have been personally monitoring compliance of their instructions to BJP lawmakers to maintain transparency about their transactions after November 8. PM Modi and BJP chief Amit Shah have been personally monitoring compliance of their instructions to BJP lawmakers.. Read More


NEW DELHI: The CBI action against a cooperative bank, controlled by BJP's 'Munde family' in Maharashtra, has sent a strong message about PM Narendra Modi's insistence that no violator would be spared in the government's efforts to cleanse the economy post demonetisation, party members say.

Sources said the PM and BJP chief Amit Shah have been personally monitoring compliance of their instructions to BJP lawmakers to maintain transparency about their transactions after November 8. Sources said the PMO cell, set up for calls against illicit monetary transactions and currency conversions, has helped agencies arrest a large number of violators since Rs 500 and Rs 1,000 notes were scrapped.

The CBI registered a case on Friday against two officials of a bank controlled by BJP MP Pritam Munde and some others, following recovery of Rs10 crore in demonetised notes last week. The agency carried out searches at 11 places at Beed, Aurangabad, Pune and Mumbai. However, nobody has been arrested so far.

On December 15, police had recovered Rs 10.10 crore, including Rs10 lakh in new Rs 2,000 notes, from a car in Maharashtra. It turned out that Rs 10 crore of this was part of the Rs 25 crore in demonetised notes that the officials of Vaidyanath Urban Co-op Bank Ltd were transporting. Pritam Munde is director of the bank .

Action against the Munde family followed raids by the I-T department last week at eight premises of BJP member and former chairman of Madhya Pradesh Rajya Sahakari Awas Sangh, Sushil Vaswani, unearthing unaccounted cash in crores — in both old and new currency. Income-tax officials had found discrepancies in transactions through Mahanagar Nagrik Sehkari Bank at Bairagarh, where Vaswani is a director and founder-member.


Top Comment
That''s the very reason why people of India given you manate, keep it up Piyush sharma

A senior party leader said action against the two ruling party lawmakers testifies that Modi and Shah mean business and that days of immunity for ruling party leaders are over.


"There should not be any exceptions while enforcing law of the land. Unlike Congress, our party believes in setting example for others as we can't expect from people what we can't do," he said.

[pankajs]

This thought came to me yesterdin but I forgot to share it here. This action on Munde led bank reminded me of it just now.

There are Organizations/NGO, especially of the religious persuasions, who cannot be asked for their resources and its sources / be investigated / or be held to account, without trigging a massive outcry from here to the juyes.

With DeMo and currency swap ALL will have to run to the nearest bank to recycle their cash cache and thus raising the curtain on their funding and with investigation their sources.

Not suggesting that this was the main reason for deMo but you can see the benefits extend far far beyond the ones being publicly discussed and criticized by the presstitutes.

[pankajs]

By acting on Munde led bank Modi is creating the right atmosphere to go after other political actors. This action will afford him the shield for the opposition outcry of vengeance that is sure to follow.

Similarly, first action on a Hindu NGO/charity/temple fund will allow him to go after the organizations of other religions. So expect some news on that front too soon.

[Dipanker]

As per my recollection, this IT raid was done during UPA rule under a "unanimous tip off", and some lose pages were found there. They contain a lot of names including some constitutional authorities and also - Mrs S.Dixit - whom Pappu to presenting a future CM of UP. Income Tax department considered this as rubbish attempt and closed the matter. The cash found was correctly accounted for as the same was withdrawn from the bank from company account one day before the raid.

You can get more detail in this Prashant Bhusan interview.
https://www.youtube.com/watch?v=2mLUQrFkJZ4

Information about the bribes were also as spreadsheet on the computer hard drive. Birla raids were by CBI and related to Coal-Gate.

[pankajs]

http://timesofindia.indiatimes.com/indi ... 163039.cms
I-T dept’s black money cell flooded with calls, emails

NEW DELHI: In the wake of the intensive drive against hoarders of black money, the income tax department has been flooded with calls and emails, giving information about people who have allegedly stashed unaccounted assets — both in cash and fixed assets.

Revenue secretary Hasmukh Adhia had on December 16 launched a special cell in the income tax department, announcing that any citizen can send information about black money to the government on a new email id, while assuring that the Centre would carry out searches based on actionable information. The id: [email protected] was instantly activated and I-T officers were designated to verify each and every detail coming through this channel.

A senior I-T official said within a week of the launch of this cell, the department was flooded with thousands of calls and emails. While in some cases the I-T department found actionable intelligence, in many others the information was found exaggerated while in some cases it turned out to be borne out of business rivalry, aimed at harassment.

[UlanBatori]

I KNEW it! Fess up, hu did this to poor Jeeni-ass? Give him 450% halal See Bee Eye documents onlee?

National TV News Flash:

Rahul Gandhi's Documents accusing Modi, actually Accuse Sheila Dixit of Taking 100 Cr Bribes! Dixit rising in deciBel level.

[pankajs]

http://www.hindustantimes.com/india-new ... eguIK.html
Oppn split again: JD(U), CPM decide to skip Cong’s show of strength

The Janata Dal (United) and the Communist Party of India (Marxist) -- two key forces in the Opposition camp—have pulled out of a proposed meeting and press conference organised by the Congress to collectively take on Prime Minister Narendra Modi over the scrapping of high-value currency.

The Congress’ erstwhile ally Nationalist Congress Party has also ruled out participation and the Samajwadi Party’s presence is doubtful.

No JDU No Communist nor NCP. SP and BSP doubtful.

Pappu is out to prove his irrelevance. Seems his so called *earthquake* has shaken the confidence of the entire opposition.

----------->
BTW, the CONgoons haven't learnt the lesson from the boy who cried wolf far to many times. The public has stopped buying his spin long back. Now the opposition too does not buy it. Such sustained mud slinging will only make Modi teflon coated by the time 2019 arrives.

[jamwal]

http://timesofindia.indiatimes.com/indi ... 188508.cms

ED detects Rs 1.43 crore in Mayawati's brother's account, Rs 104 crore in BSP account

The ED on Monday detected cash deposits totalling over Rs104 crore in an account belonging to the BSP and Rs 1.43 crore in an account belonging to party Supremo Mayawati's brother Anand Kumar in a branch of United Bank of India here, sources in the Enforcement Directorate said.
Officials said the agency, Enforcement Directorate, as part of its routine survey and enquiry operations to check suspicious and huge cash deposits in banks, visited the Karol Bagh branch of the UBI on Monday and found huge deposits made in these two accounts post-demonetisation.
Attempts to elicit a response from BSP on the issue failed.
They said the sleuths called for the records of the deposits made in the BSP account and found that while Rs 102 crore was deposited in Rs 1,000 notes, the rest Rs 3 crore was deposited in the old Rs 500 notes.
Officials said they were astonished to find huge cash of about Rs 15-17 crore being desposited every other day.
The agency also detected another account in the same branch belonging to Anand, brother of BSP chief Mayawati, where a total of Rs 1.43 crore funds was found. A sum of 18.98 lakh came into account using the old notes after the ban.
The ED has sought full details about the two accounts from the bank even as it is understood that the agency will write to the income tax department which has the powers to go into the legality of donations and contributions made to political parties.

[nash]

TIMES NOW ‏@TimesNow 10m10 minutes ago
#BREAKING Cash deposit documents seized from BSP Delhi office; ₹107 crores deposited after remonetisation; 8 deposits between nov 8-dec 23

So First Official Political Target is Elephant.

[Singbhai]

Dalit ki Beti
the Notorious Didi
The Humble Maharastrian Farmer
The Prince of Andhra

List is long - but ED should start with these ones for sure.

[rsingh]

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!

there has to be hereditary tax. Property from 1cr to 2cr= 10%
From 2 cr to 20 CR= 20%
from 20 Cr to 100 cr 25 %. this will bring rich brats to senses and some extra Rs to GOI.

[vijayk]

http://www.ndtv.com/india-news/woman-sa ... pm-1642068
Woman Says She Found 100 Crores In Her Jan Dhan Account, Wrote To PM

[pankajs]

The next question is who at the bank was involved in laundering this money?

[raj-senthil]

ANI ‏@ANI_news 2h2 hours ago
B'lore: IT Dept unearthed undisclosed income of Rs169 cr(approx) during search ops at premises related to real estate developers&mall owners

[Sicanta]

Ordinance planned to impose penalty for holding junked notes

http://www.business-standard.com/articl ... 023_1.html

OMCs eye over 50% of retail sales in cashless mode by March

http://www.business-standard.com/articl ... 873_1.html

Powered by Paytm, Odisha's Manguli village to go cashless

http://www.business-standard.com/articl ... 656_1.html

Cashless health insurance for families earning below Rs 5 lakh in Assam

http://www.business-standard.com/articl ... 685_1.html

[Sicanta]

India needs to move to a lower taxation level: Jaitley

http://www.business-standard.com/articl ... 274_1.html

Modi says law against benami property soon: What you should know

http://www.business-standard.com/articl ... 131_1.html

Tracing serial numbers: How PM Modi plans to hunt down rogue bank managers

http://www.business-standard.com/articl ... 228_1.html

[vijayk]

The next question is who at the bank was involved in laundering this money?

YES bank

[Marten]

Vijayk, the article says SBI.

[nash]

Numbers seems to increasing with every passing day, started with crore in single digit to double digit and now in triple digit.

[Rishi Verma]

More details coming out. Mayawati will predictably say tomorrow that BJP/RSS "Brahmins" targeting "Dalits" and will ask more dalits to convert to Buddhism. Dalits won't convert this time because BSP won't have cash to pay them.

1.43CR from Maya 's Brother and 104CR from BSP official Bank Account

Officials said the agency, Enforcement Directorate, as part of its routine survey and enquiry operations to check suspicious and huge cash deposits in banks, visited the Karol Bagh branch of the UBI on Monday and found huge deposits made in these two accounts post-demonetisation.

The ED has also asked the bank to provide to it CCTV footage and KYC documents used to open the accounts, they said.

Only thing mayawati can say at this point is Ambedkar would not allow CCTV surveillance.

[Dipanker]

Numbers seems to increasing with every passing day, started with crore in single digit to double digit and now in triple digit.

It is approaching nash equilibrium. ( jk!)

[Dasari]

Regarding the BSP loot of Rs 108 cr, we can't claim success until the end. I could be wrong, but there is no limit on how much parties can raise money, and as of now there is no limit on how much cash one can hoard (that is white money).The only restriction is that they need to document any donations greater than Rs 20000. So if she claims that all this money is small cash donations and has no records, can they prosecute and confiscate the money?

[vijayk]

Vijayk, the article says SBI.

Correct

[Dipanker]

Regarding the BSP loot of Rs 108 cr, we can't claim success until the end. I could be wrong, but there is no limit on how much parties can raise money, and as of now there is no limit on how much cash one can hoard (that is white money).The only restriction is that they need to document any donations greater than Rs 20000. So if she claims that all this money is small cash donations and has no records, can they prosecute and confiscate the money?

Your apprehensions seems correct. If they confiscate the cash they will have to do it to all political parties as all of them will have similar cash.

Not saying that Mayawati is not corrupt or for that matters the rest of our politicians, but this raid may have more to do with impending UP poll.

[vijayk]

http://economictimes.indiatimes.com/new ... 148959.cms
Aadhaar payment app set to simplify digital transactions

The app, to be launched on December 25, would also eliminate the fee payments for service providers like card companies such as Mastercard or Visa, which has been a stumbling block in merchants switching to digital payments making it affordable to even merchants in remote villages, said people familiar with the development.All that it needs is an Android phone with the merchant.


Now understand the takleef of idiot Steve Forbes....

http://www.forbes.com/sites/timworstall ... 7afdf11895
There's A Major Problem With The Aadhaar Payment App Being Rolled Out Today

I have to admit to certain worries about the technology itself:

The app can be downloaded on Android phones, and used with the help of a biometric reader, which costs the merchant Rs 2,000.

A customer feeds his or her Aadhaar number into the app and selects a bank. The biometric information then serves as the password.

There is no automatic or electronic biometric system at all which is 100% accurate. And you only need a failure rate of fractions of a percent to make a financial system too leaky for proper security. But that's a technological problem, not an economic one.

...the new app will be launched on 25 December keeping in mind a faster adoption of a cashless society and to eradicate fee payments charged by card companies, making it an affordable digital payment solution for merchants in rural areas.

[SRoy]

Android only app is an issue. Not going to buy a lagdroid just for electronic money transfers.