Bharat Rakshak

pankajs wrote:There is this possibility that GOI is *deliberately* holding off much currency supply till the bank window closes. After having closed the bank route by 31st Dec 2016, GOI will flood the market with new notes.

all I can say is that the logistics chain right now is stretched to complete max, it is at breaking point.

are you saying that Rbi will somehow manage to augment to this.

Look at this and discern your patterns.
a fairly large bank state-wide (600 branches)
Week 1: ₹20 Crore
Week 2: ₹27 Crore
Week 3: ₹120 Crore
Week 4: ₹20 Crore (500s), ₹20 Crore (2000s), ₹25 Crore (50s, 10s)

What sense do you make of it, and where do you think this can be stretched even further.

Also my brother gave 2000 at a restaurant for breakfast costing 100 and got 1900 back.

habal wrote:

pankajs wrote:There is this possibility that GOI is *deliberately* holding off much currency supply till the bank window closes. After having closed the bank route by 31st Dec 2016, GOI will flood the market with new notes.

all I can say is that the logistics chain right now is stretched to complete max, it is at breaking point.

are you saying that Rbi will somehow manage to augment to this.

Look at this and discern your patterns.
a fairly large bank state-wide (600 branches)
Week 1: ₹20 Crore
Week 2: ₹27 Crore
Week 3: ₹120 Crore
Week 4: ₹20 Crore (500s), ₹20 Crore (2000s), ₹25 Crore (50s, 10s)

What sense do you make of it, and where do you think this can be stretched even further.

When I was *speculating* in my previous post I did not see the report below. Just the way Modi is communicating gave me the impression that GOI/RBI seem to be holding back on liquidity.

It can be stretched because it has been done when GOI/RBI felt the need to push more cash. That in turn means that RBI is not pushing all that it is printing into the system.

http://www.hindustantimes.com/business- ... UoBtK.html
Cash supply to banks up by 50% as RBI steps up printing of currency {On 1st Dec 2016}

Cash supply to banks has gone up by 40-50% in the last few days compared to the first two weeks of demonetisation, sources said, as banks battle a limited supply of Rs 500 notes, poor circulation of Rs 2,000 bills and payday.

The Reserve Bank of India has stepped up printing of currency, both old and new, and has assured greater availability of the new currency notes than the previous weeks.

A State Bank of India (SBI) executive said they had seen a 50% increase in cash supply in the last three days, which coincides with payday that has brought back long queues at banks and ATMs.

The biggest pilferage occurred in the first week of demonetization. I was in Vizag on business trip, there was literally host of middleman like hospital owners, big clothe merchants, gold jewelers, petrol bunk owners converting old currency on 20-30% commission. They exchanged or deposited the higher notes with banks showing it is as their cash on hand from last few weeks sales. Some of them also used some am admi to perform the exchange. It slowed down as govt put more restrictions and KYc verification in the subsequent weeks.

Therefore you cannot conclude the success of the program by the amount of the currency converted. It is to be expected, all hoarders will find any avenue possible to make its way to banks. I suspect most, if not all, of the Rs 500-1000 notes will be converted by Dec 30. The real work for govt starts after Dec 30. They need to start a massive machine learning/ AI project to go through this data and find out potential fraudsters for more thorough manual review. If RBI and Govt don't have this in their plans, and if we have to evaluate demonetization based on how much money came back to banks, it would be an utter flop.

Right now a lot of ₹2000s are being pushed into the system. Normal people do not want this unless they have no other option.

All these reports of ₹2000 notes of ₹5 crore in bolero and ₹4.5 crore on mattress is seems are these unwanted ₹2000 notes being distributed to hoarders by pvt bank managers who can do as they please with their cash.

I left Vizag around Nov 26th. My sources tell me that not a single Rs500 note was issued in the city until today. I wonder what is going on. At the beginning there was a rumor about some printing mistake in Rs 500. Did this derail the flow of Rs 500 notes? Without addressing the supply of Rs 500 notes, RBI talks about Rs 20 and Rs 50. Rs 500 notes would have eased the problem lot better. The situation in rural area is even more pathetic. If they don't resolve this in another month, the total invalidated amount headlines can turn the people against demonetization very quickly. That is the danger govt need to worry.

3rd tranche of Rs 500 notes in, partial relief for customers
http://timesofindia.indiatimes.com/city ... 847513.cms

KOLKATA: The arrival of third tranche of 500-rupee notes has brought partial relief for customers. Many banks, both private and nationalized, received a sizeable part of their cash requisition in 500-rupee notes on Monday. There is a temporary respite and customers are happy that they won't have to return home empty-handed now.

Sources in the banking circle said that Rs 75 crore in 500rupee notes (15 lakh notes) was infused on Monday across the state. This was the third tranche of infusion of Rs 500 notes.In the first two tranches Rs 50 crore each was infused.

"Today , I have been able to withdraw four 500-rupee notes. I am so happy that I cannot express myself. Though I had a few Rs 2000 notes, they were of no use because you can't exchange them unless you make big purchase," said Samrat Sarkar, who trades in leather goods in Mott Lane. At an Indian Bank branch in central Kolkata, fresh cash was infused on Monday night and a large percentage of that was in Rs 500 notes. The bank officials are happy that they won't have to push 2000-rupee notes now. "Of course, there will be some Rs 2000 notes if someone is withdrawing a big amount, but we are trying to give quite a few 100and 500-rupee notes too. The real crisis lies in Rs 100 notes now, Rs 500 notes are gradually being made available," said an official.A huge percentage of the Rs 500 notes supplied to banks were used to re-fill ATMs.

a) the point the CA was making was that money was being printed by govt mints but not being routed thru RBI and being used for elections. the cat will be out of the bag on 30th Dec. RBI can easily check the serial nos and detect if any of the currency is in market and not part of its inventory. In case the deposits exceed the 14.5L figure, this could be a issue. b) the 500 rupee note is still not available , dont know whats going on.

I did not have problems changing the 2000s when I tried. But then I was old customers in those places. Also - not many people will be able to/want to/afford to buy things worth Rs 500 from the same small shop. It is very difficult for them.

For the middle class, its just an inconvenience. For the poor - its truly very difficult.

Why would a mobile shop owner have 35.5 lac cash holdings unless it is BM?

Sachin wrote:Mean while, Bengaluru sees yet another case of police men becoming thieves. This time it is a Sub Inspector who has been trapped. Again demonetization was the move, which gave the gang new ideas.
Five cops held for robbery
A sub-inspector and four constables were arrested on Monday for robbing a businessman of Rs 35.5 lakh near Peenya on November 22. They colluded with two welders to threaten and rob Gangadhar, a mobile shop owner from Tumukuru district, police said. All those involved in the crime — Sub-inspector Mallikarjun, constables Manjunath, Girish, Chandrashekar and Anantharaju, police informant Jaffer and his friend Bhaskar — are now in custody, a senior police officer told DH.

habal wrote:All that the banks are doing nowadays is to distribute cash.

There is no other banking activity going on.

there are no new deposits, no new advances, and neither is the new cash distributed coming back into banks.

can somebody explain the economic consequences of this phenomenon.

Not true. Been to two banks, applied for multiple things, got some done. Yes, much more crowded and busy, but not focused only on distribution.

the two banks you visited and got a loan are an exception. These may be private banks.

the way you guys write 'not true' makes it seem as if your bubble is the universe.

Expect all demonetised money to come back to system: Revenue Secretary

THE government expects the entire money in circulation in the form of currency notes of Rs 500 and Rs 1,000 which have been scrapped to come back to the banking system so that the tax authority can trace the transactions and tax black money hoarders, Revenue Secretary, Hasmukh Adhia said on Tuesday. This, effectively, undermines the prospect of any windfall gains accruing to the government arising out of part of the demonetised currency remaining outside the banking system.

https://www.youtube.com/watch?v=J7_1MU3gDk0

Did'nt we see some posters give all sorts of justifications for "dandha"/"business" as the end-all in this thread ?While simultaneously claiming that the dutty govt's taxes are baad ?

With DeMo & cashless going ahead in full steam, these people will increasingly get to experience onlee "vicarious satisfaction" of breaking laws via hakla khan's gangster movies and such.
But since the movie is releasing in Jan they may be forced to pay with white currency to enjoy a blackmoney making movie

GoI said at the start of demonetisation that about 14.5-15 lakh crore money was in higher denomination. Now they already got back 11.5 lakh crore. Still 3 weeks to go. What if it reaches 14.5 lakh crore or even exceed ? Wouldn't it be a joke on GoI and all the people who supported this effort? How will GoI answer this?

Dasari wrote:The biggest pilferage occurred in the first week of demonetization. I was in Vizag on business trip, there was literally host of middleman like hospital owners, big clothe merchants, gold jewelers, petrol bunk owners converting old currency on 20-30% commission. They exchanged or deposited the higher notes with banks showing it is as their cash on hand from last few weeks sales. Some of them also used some am admi to perform the exchange. It slowed down as govt put more restrictions and KYc verification in the subsequent weeks.

If they had bank accounts every single one of them will have to explain how everyone has "windfall" income in November-Dec 2016 AFTER Diwali and Dussehra when they have been unable to show such windfall income in earlier years.

It is a catch 22 situation. If they claim it is 1 year windfall they will have to show the books and what they sold. If they make other excuses it means it was hoarded black money.

Urjit Patel has stated that 80% of the 500/1000 notes have now been returned to the banking system. That means only 1.4 lakh crores needs to come in over the next 3 weeks. Maybe only 50,000 crore will not come it.

But if 90% of the notes are returned it will confirm (to me) that the black money cash hoarding in India was probably not by the real biggies with 100 of crores - those are probably only a few in number, but the vast majority are undeclared income by "chota-mota" hoarders like my octagenarian aunt. This may be good news for the nation in the longer term - because these small fry can be encouraged to stay legal and shift to e payments rather than be punished. JMT

naruto wrote:GoI said at the start of demonetisation that about 14.5-15 lakh crore money was in higher denomination. Now they already got back 11.5 lakh crore. Still 3 weeks to go. What if it reaches 14.5 lakh crore or even exceed ? Wouldn't it be a joke on GoI and all the people who supported this effort? How will GoI answer this?

^
Joke on the govt will onlee be if they are unable to identify & frogmarch the kaladhanpatis based on the banking data collected during demonetization .

habal wrote:All that the banks are doing nowadays is to distribute cash.

There is no other banking activity going on.

there are no new deposits, no new advances, and neither is the new cash distributed coming back into banks.

can somebody explain the economic consequences of this phenomenon.

That is bound to happen. When 11 lakh plus crore currency notes are deposited into the banking system (latest RBI report) a good chunk of it which would otherwise have been exchanged between people or businesses must of necessity be routed through the banks. Also other forms of electronic commerce (NEFT, RTGS, Debit/Credit cards etc.) continue to take place. The only other aspect is incremental bank credit to borrowers. Here the RBI data s available only till 11th of November. But the data even when updated is bound to be depressed because banks have had to write off some more loans from past bad debts- remember the fuss about how Mallya's loans were written off even poor people are suffering post demonetisation chorus? But even pre demonetisation credit growth has been sluggish. Hope this helps.

Incidentally - Urjit Patel is quoted as saying exactly what Suraj said on the forum: "Don't hoard small denomination notes. Keep them moving" He says the govt has released more cash into the circulation in the last 3 weeks than was done in 3 years prior to that

habal wrote:All that the banks are doing nowadays is to distribute cash.

There is no other banking activity going on.

there are no new deposits, no new advances, and neither is the new cash distributed coming back into banks.

can somebody explain the economic consequences of this phenomenon.

Hospital clinic practice is down 40%. A young colleague of mine said that he has never seen it so quiet. People who are not spending on anything more than essentials are postponing major medical decisions. Of course marriage season is one reason but this is even more profound.

habal wrote:there are no new deposits, no new advances,...

These days most FD's are created via online banking.
Loan sanctioning however still has a significant offline component (although Disbursal itself is done electronically to your account).

Quantum of offline FD's created at a branch are often times linked to bank manager's bonus.
Govt should give involved bank officers a onetime bonus for the work done for DeMo post DeMo.

Sir, while I don't have enough data to say poor are not facing difficulties, an anecdote as a contrary example:
Our regular maid was away. We had a temporary help for about 10 days. She was able to take a 2K note and get back 800 change just like that. I didn't enquire who she managed to make change for it.

shyamal wrote: For the middle class, its just an inconvenience. For the poor - its truly very difficult.

shiv wrote:Incidentally - Urjit Patel is quoted as saying exactly what Suraj said on the forum: "Don't hoard small denomination notes. Keep them moving" He says the govt has released more cash into the circulation in the last 3 weeks than was done in 3 years prior to that

Unfortunately, the bulk of these released cash was in Rs2000. Which cannot really be used except for big purchases.
That has caused the crunch.
If 500s and 100s had started to be distributed since 16-17 nov in bulk amounts instead of forcing the 2000 on people, then this problem and hoarding would not be there today. People are forced to hoard for their necessities - instead of spending freely on discretionary purchases.

srinebula wrote:Sir, while I don't have enough data to say poor are not facing difficulties, an anecdote as a contrary example:
Our regular maid was away. We had a temporary help for about 10 days. She was able to take a 2K note and get back 800 change just like that. I didn't enquire who she managed to make change for it.

shyamal wrote: For the middle class, its just an inconvenience. For the poor - its truly very difficult.

There are anecdotes that the 2000 is selling for 18X100.
Yes - it is that useless unless you want to pay exactly 2000 with it.

shiv wrote: But if 90% of the notes are returned it will confirm (to me) that the black money cash hoarding in India was probably not by the real biggies with 100 of crores - those are probably only a few in number, but the vast majority are undeclared income by "chota-mota" hoarders like my octagenarian aunt.

I actually read a similar thing somewhere - either on this forum or somewhere else. The argument there was that if BM were to fall on the bell-curve as well it would be the chota-mota people.

Which has its own interesting implications.. GoI for instance will now have to go after the chota-mota people.

BTW if somebody has youtube URL of Urjit Patel's address to media could somebody please post it ? Somebody told me he did a great job calming people down while doing something that surprised everybody by holding the rates.

shyamal wrote:

srinebula wrote:Sir, while I don't have enough data to say poor are not facing difficulties, an anecdote as a contrary example:
Our regular maid was away. We had a temporary help for about 10 days. She was able to take a 2K note and get back 800 change just like that. I didn't enquire who she managed to make change for it.

There are anecdotes that the 2000 is selling for 18X100.
Yes - it is that useless unless you want to pay exactly 2000 with it.

^
In a hole in the wall patanjali store in chennai i saw a 2K note exchanged for a purchase & giving out 16 Rs100 notes without a complaint.
Seen in all supermarkets freely giving out Rs100 notes in exchange for 2K note.

No one in their right mind among the poor will accept 1.8K in 100 notes for a 2K.
Please stop spreading rumours.
If change is not available they are depositing the note with the shopkeeper/vendor to buy groceries/get recharges/use that money for other's purchases based on that 2K advance.
Or in reverse the shopkeeper/vendor himself is selling stuff based on credit upto a point.
People are using 2K notes in newways unimaginable compared to old currency.

As I already said - its fine if you want to buy 2000 worth of stuff from one shop(right now or in the near future). For the lower income - that is true only for bare necessities like groceries etc. That they are managing fine.
No one is going to keep money in advance with a shopkeeper for future purchase of discretionary items. That is the sector(which also employes lots of lower income people) that is being decimated.

Is West Bengal really that economically dull or are they being squeezed. Individual banks (the big ones) out here get ₹50 crore in each tranche.

uddu wrote:3rd tranche of Rs 500 notes in, partial relief for customers
http://timesofindia.indiatimes.com/city ... 847513.cms

KOLKATA: The arrival of third tranche of 500-rupee notes has brought partial relief for customers. Many banks, both private and nationalized, received a sizeable part of their cash requisition in 500-rupee notes on Monday. There is a temporary respite and customers are happy that they won't have to return home empty-handed now.

Sources in the banking circle said that Rs 75 crore in 500rupee notes (15 lakh notes) was infused on Monday across the state. This was the third tranche of infusion of Rs 500 notes.In the first two tranches Rs 50 crore each was infused.

"Today , I have been able to withdraw four 500-rupee notes. I am so happy that I cannot express myself. Though I had a few Rs 2000 notes, they were of no use because you can't exchange them unless you make big purchase," said Samrat Sarkar, who trades in leather goods in Mott Lane. At an Indian Bank branch in central Kolkata, fresh cash was infused on Monday night and a large percentage of that was in Rs 500 notes. The bank officials are happy that they won't have to push 2000-rupee notes now. "Of course, there will be some Rs 2000 notes if someone is withdrawing a big amount, but we are trying to give quite a few 100and 500-rupee notes too. The real crisis lies in Rs 100 notes now, Rs 500 notes are gradually being made available," said an official.A huge percentage of the Rs 500 notes supplied to banks were used to re-fill ATMs.

naruto wrote:GoI said at the start of demonetisation that about 14.5-15 lakh crore money was in higher denomination. Now they already got back 11.5 lakh crore. Still 3 weeks to go. What if it reaches 14.5 lakh crore or even exceed ? Wouldn't it be a joke on GoI and all the people who supported this effort? How will GoI answer this?

As per the revenue secretary of GOI they expect to get all of it back.

Probably typo.

shyamal wrote:For the middle class, its just an inconvenience. For the poor - its truly very difficult.

I have become very sceptical about people speaking on behalf of the poor while they say that things are OK for themselves

Firstly things that not that rosy for the middle class either - but as the e-payment portals say there is a 30% increase in usage, but payments are less than Rs 1000 and for medicines/groceries rather than high ticket items.

All of us have access to some "poor" and I regularly rub shoulders at work people who are poor. They are all managing as well as I am. "Poor are really suffering" is a meme that is being bandied about with little reference to the fact that everyone has problems but most are coping and most people understand what is going on

They are coping(the other option is dying) but with great difficulty.
Things have been specially bad over the last one week.
There was expectation that things will ease by 1st week of December. Lots of credit in the market for that assumption. Now quote a few shacks, small services etc in my locality had to close down. I don't think any of them has died but they are in great trouble. Forget about any support of Demo, most are cursing now. If situation does not improve(big push in 500 and 100) within 4-5 days then most other small shacks, vendors etc will close too. This is first hand experience.
You can see that I have posted positively about Demo since the beginning. Also my first hand experience that the poor(the ones I know) are coping fine. Now things are truly different.

habal wrote:the two banks you visited and got a loan are an exception. These may be private banks.

the way you guys write 'not true' makes it seem as if your bubble is the universe.

I think you are living in a make believe universe and bubble and your non stop complaints are clearly slanted.

case in point. both banks i went to were public banks.

they are not an exception because they were crowded but still regular bank stuff was going on. third bank, the biggest was also full but all usual bank activities were also visible.

shiv wrote:Hospital clinic practice is down 40%.

Hakim saab, any chances of consultation/procedural fees going down in the near future due to decrease demand? But health sector is the soft underbelly. Most people will spend money on procedures...but like you said if the procedure is deemed as not emergency or optional, than they may postpone currently. So, the healthcare sector may rather wait until things pick up again...

pankajs wrote:On Monday, I went to my local corner shop with a Rs 2000 note. Asked if will get change back. Was asked what was I planning to spend. My reply was about Rs 500. The person agreed to accept my Rs 2000 note.

My shopping came to about Rs 800+ and got back Rs 1100+ in 100's. rolled up my purchase for the next week too. Not an issue.

same here. i spent 400, got change in hundreds. then 500, change in hundreds.

i suspect a lot of money was simply hoarded by bijness and contacts types and hence there was a fake shortage. this is the gap that occurred and we are seeing the problem.

My experience in Private bank -
The three teller windows were busy with currency deposit and withdrawal. the other bank employees were doing their usual work. A discussion about loan documents was going on with a customer while I was standing in the queue.

Friends experience in SBI and PNB -
Life certificate(needed for pensioners) work going on as usual.
NRO account opening happened smoothly
updating of passbook and getting bank statement stamped and signed(for visa) happened smoothly.

Cash gets over by 1pm. After that the usual bank work gets done smoothly. No crowds after 1 pm.

shyamal wrote:Introducing the 2000 instead of 500 and 100 was a big blunder.
2000 is being cursed by everyone who cannot afford to club purchases. 2000 just cannot be used. Where one would use 2000 notes one can anyway use credit cards or bank transfer.
People are starting to lose patience(and I am still a supporter and have faced no inconvenience myself).
Any more loss of income will make the process irreversible.
I seriously hope the 500s and the 100s hit the system in large numbers within next 4-5 days. In that case situation will start to normalize by new year. Is that possible?

this worrisome and was my first fear. the lack of availability of the smaller denominations because it would have been soaked up by the crooks and contacts types.

shyamal wrote:My experience in Private bank -
The three teller windows were busy with currency deposit and withdrawal. the other bank employees were doing their usual work. A discussion about loan documents was going on with a customer while I was standing in the queue.

Friends experience in SBI and PNB -
Life certificate(needed for pensioners) work going on as usual.
NRO account opening happened smoothly
updating of passbook and getting bank statement stamped and signed(for visa) happened smoothly.

Cash gets over by 1pm. After that the usual bank work gets done smoothly. No crowds after 1 pm.

ditto for two public banks.
activities - passbook updates, cash withdrawal, online banking, card application, account checks.

No Windfall For Government From Undeposited Old Notes, Says RBI Chief Urjit Patel

http://profit.ndtv.com/news/economy/art ... topstories