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Old 9th November 2016, 19:05   #196
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by hemanth.anand View Post
For many, its a mental block that without cash, things won't work. In fact I feel that now, many people will realise that it is not that difficult and they will come out of this mental block. There is almost nothing that you cannot buy with electronic cash.
Yes, I agree with this. Its been years since debit cards/net banking/ credit were introduced. I am still surprised that there are still educated people who refrain from using these.

There are two categories of people here ...

One : Those who have access to all digital banking facilities but either don't know how to use them or refuse to learn to use them. Most of them have smartphones these days. Every account created comes with an APP access as well as online access. Almost all banks offer tons of services on their apps. These are people who use smartphones just for clicking selfies, whats-app, FB etc and not for banking purposes. They should not have the excuse of inconvenience at all.

Yesterday all TV channels showed footage of several people lining up at ATMs to withdraw Rs. 100 notes. All seemed educated people and should have other means to pay other than cash. Then why they need cash, beats me.

Two : Other category comprises people like senior citizens, poor people without smartphones, slum dwellers, small time farmers, taxi drivers, drivers etc. who will be inconvenienced for a few days. It is time these people also come into the banking fold for the greater good. Again, our Govt. had been extorting all such people to come under the Jan Dhan yojana for at least two years now. Why haven't these people taken up this benefit?

I might be sounding a bit harsh to these people, but this is a time where the poor has got the real power to defeat the corrupt rich. I am sure people will cooperate in this endeavor despite the short term inconvenience.

Realized one funny thing : Politicians cannot organize protests without cash. So, everyone is on the back foot.
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Old 9th November 2016, 19:29   #197
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Default re: Government scraps Rs 500 and Rs 1000 notes!

My neighborhood grocer + vegetable vendor (single roof) is accepting both Rs. 500 and Rs. 1000 notes. But instead of change, you get an IOU. If you don't want an IOU, you need to buy items worth Rs. 500 or Rs. 1000.
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Old 9th November 2016, 19:32   #198
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sukhoi30 View Post
One : Those who have access to all digital e...

Two : Other category comprises people like senior citizens...
You totally forgot the 3rd category, small towns and villages where cards are rarely accepted. If they accept, they will charge extra 2.5% for card usage.

When I bought 5 Michelin tyres in Udupi recently, I had to use wire transfer to avoid the extra charge for credit card. Since the vendor had a bank account, I could do it. The only places that accept cards (without charge) are restaurants and super markets. Rest will insist on cash or card with extra charge. But most won't have the card facility.

If I order home delivery today, I won't be able to pay.
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Old 9th November 2016, 19:37   #199
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Default re: Government scraps Rs 500 and Rs 1000 notes!

Toll tax across all National Highways suspended till November 11: Nitin Gadkari.

Union Minister of Road Transport & Highways Nitin Gadkari said that toll taxes have been suspended across all National Highways till midnight of November 11.

Source-Financial Express
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Old 9th November 2016, 19:43   #200
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Default re: Government scraps Rs 500 and Rs 1000 notes!

Amul's one liner on the subject

Government scraps Rs 500 and Rs 1000 notes!-cw0ejjwuaaay_la.jpg
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Old 9th November 2016, 19:46   #201
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Default re: Government scraps Rs 500 and Rs 1000 notes!

Folks, I was thinking of what the impact will be on the used car market. As we know, this market operates very heavily on cash basis. I think there will be sudden drop in demand due to seller's unwillingness to accept cash. This should help buyers from the salaried class or legitimate business men, since they will still be able to operate in the market and generate some amount of demand.

New car market will also slow down due to less money in circulation. This may result is lesser supply in the used car market since owners may put off their car refresh decisions. On the other hand, owners holding on to multiple cars may put them on the market to generate liquidity?

On the whole, I think there should be a significant increase in inventory and drop in prices in the used car market (maybe 20-25%) in the 3-6 month time period. Afterwards the market should stabilize at a level lower than today's prices.
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Old 9th November 2016, 19:48   #202
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by aaggoswami View Post
And 3-4 weeks for new currency to reach is a disaster. Dont know how to manage.
Presumably and hopefully, this refers to the new 500/2000 notes in which case it is just a temporary inconvenience and not a big deal. But if there aren't enough 100 rupee notes to the extent necessary across the country to make up for the absence of the higher denomination notes, it is a disaster in the making that will cause major upheavals.
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Old 9th November 2016, 19:50   #203
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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You totally forgot the 3rd category, small towns and villages where cards are rarely accepted. If they accept, they will charge extra 2.5% for card usage.
Nopes, they are included in the 2nd category. Small time farmers, traders etc. will be inconvenienced due to lack of banking facilities initially. But eventually they will have to come to the system.

BTW, it is no longer legal to charge extra for card usage by any merchant establishment. This was implemented by RBI long back.

https://rbi.org.in/scripts/Notificat...r.aspx?Id=8461

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4. Levying fees on debit card transactions by merchants - There are instances where merchant establishments levy fee as a percentage of the transaction value as charges on customers who are making payments for purchase of goods and services through debit cards. Such fee are not justifiable and are not permissible as per the bilateral agreement between the acquiring bank and the merchants and therefore calls for termination of the relationship of the bank with such establishments.
5. Though many banks have appreciated our concerns and have discontinued with the above mentioned practices/ products, some of them still seem to persist with them. These practices/ products thwart the very principle of fair and transparent pricing of products which beholds customer rights and customer protection, especially, in the more vulnerable retail segment. Such practices thus violate, both in letter and spirit, various provisions of our MC on Interest Rate on Advances and therefore, you are advised to strictly desist from these practices hence forth.
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Old 9th November 2016, 19:55   #204
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by SDP View Post
Wow! Not having any cash in 100s and lower denominations? How did that happen?
Think of it. If you goto an ATM and withdraw 5000 Rs, you get 9*500s and 5*100s right? Having anywhere more than 10 100s at a given time, is a rarity. Also has practical applications, if you want to carry 5000 INR would you carry as 10 500s or 50 100s in your wallet?

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Originally Posted by hemanth.anand View Post
My plan
As my missus says to me 'Easy for you to say this sitting in office all business hours' I've been using Amazon Prime and online Indian groceries for the last year to minimize the things we have to carry around. We still haven't been completely eliminate cash usage at all. Almost 1/5th of the monthly spending goes out in cash. Few examples: small stationary shop, fruit-vegetable market, pizza delivery, taxi, < 20 € transactions in small shops, any home repairs we encounter. This happens living in a small South European town, happens the same way even in cities.

Indian cities have a far higher reluctance to pay/accept card, cheque payments. Some even don't exist, like gas cylinder delivery, daily milk delivery person, aavin milk card, any fruit/vegetable vendor in Ranganathan street or Koyambedu, newspaper delivery, autorikshaw, any home repair person are few I can remember top of my head living in a metro city like Madras. The percentage is higher if you steer to small towns, villages etc.

Many from my father generation are old school and don't depend on card, ATMs at all. They use banks and all, but not that technologically inclined.

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Originally Posted by Sawyer View Post
Presumably and hopefully, this refers to the new 500/2000 notes in which case it is just a temporary inconvenience and not a big deal.
Isn't new 2000 INR note, slated for Feb 2017? New 500s will have to come out, 3-4 week delay there would be a disaster.

Last edited by narayans80 : 9th November 2016 at 20:00. Reason: additional response
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Old 9th November 2016, 19:55   #205
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sukhoi30 View Post
.....it is no longer legal to charge extra for card usage by any merchant establishment. This was implemented by RBI long back......
Plenty of stuff is illegal in this country on paper, ground realities are different and I'd rather not waste our time quoting examples. It's neither possible not practical to involve the RBI every time some merchant refuses to swipe your card without a surcharge, and it becomes an issue when the most widely accepted form of payment is severely restricted, even if for a little while. Probably sounds like an escapist excuse, but rules mean nothing if implementation is lax.

isn't something that works in India, as much as we'd love to believe it does/should.

Last edited by Chetan_Rao : 9th November 2016 at 19:57.
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Old 9th November 2016, 19:56   #206
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sawyer View Post
5 cannot ever happen because of the 3 that follows.

It is a well known fact that cost of collecting income tax on other than companies, is much more than the income tax collected, as one example.

It is equally well known that in many places Octroi could not be abolished because the Octroi department staff violently protested against this.

.
The first one is not true (Income tax collected is less than the cost of collecting) - it is an urban legend.

Octroi - Octroi gets abolished when GST comes into force.
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Old 9th November 2016, 20:49   #207
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Default re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by narayans80 View Post
As my missus says to me 'Easy for you to say this sitting in office all business hours' I've been using Amazon Prime and online Indian groceries for the last year to minimize the things we have to carry around. We still haven't been completely eliminate cash usage at all. Almost 1/5th of the monthly spending goes out in cash. Few examples: small stationary shop, fruit-vegetable market, pizza delivery, taxi, < 20 € transactions in small shops, any home repairs we encounter. This happens living in a small South European town, happens the same way even in cities.
although many items you have mentioned is all bought by me using electronjc money, I won't contest, I get your point that not many of this is available in tier 2 cities. Cash is absolutely necessary
But my point is, we are only talking about 2 days before cash will start flowing in again. although you can't withdraw big amounts, it is enough for all the items you've mentioned. Even if there is a sudden expenditure for such items, in tier two cities, deferring a payment is not a difficult thing to do right?
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Old 9th November 2016, 21:15   #208
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Default re: Government scraps Rs 500 and Rs 1000 notes!

Guys, there is really no need to panic. Here's what I got from someone who is an banking insider:

1. The new 500 and 2000Rs notes have been kept ready from quite some time with very strict instructions to keep the info confidential. All banks (or at least the bigger ones) would have access to new notes tomorrow and exchange would start from tomorrow.

2. 2000Rs notes would NOT be available from ATM, and would be exclusively from the counters.

3. ATMs have been shutdown because of multiple reasons.
a> Programming needs to be changed for implementing new withdrawal limits and new notes.
b> Old 500 and 1000 Rs notes have to be cleared out from all ATMs
c> The tray inside the machines which holds the 1000Rs notes are being replaced with 100Rs tray. So the ATMs would be dispensing more 100Rs notes in a day or two.

4. The ATMs would most likely remain shut even tomorrow (Thursday) ... at least in Mumbai.

5. Anybody (including people who don't have a bank account) can get 4000Rs exchanged to new notes at the bank. A form and identification would be needed.

6. In anticipation of the crazy queues, leaves/vacations for bank employees have been cancelled. Banks would be working on this Saturday and Sunday as well.
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Old 9th November 2016, 21:16   #209
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Default re: Government scraps Rs 500 and Rs 1000 notes!

Atleast within the country, the charging of commission by Mastercard/Visa kind of issuers to businesses should be removed. This will encourage everyone to accept the cards.

If NEFT/RTGS works without any extra charge, why this extra commission since we should have a good digital system for money movement?
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Old 9th November 2016, 21:21   #210
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Got this message "Advance notice on 1 more MSS (modi surgical strike) Now lets talk about digital lockers - from a specific date you will not be able to operate your bank locker with your keys . It can be opened only digitally in the presence of a government revenue officer . Any jewellery found without substantial evidence only 600 gms will be allowed per ladies member substantial through ration card . Balance for all jewellery and gold bars diamond n other materials valid bills will be required . Otherwise valuation will be compounded 3 times and taxes will be paid accordingly . Confirmed news".
Next will be land. Only one property per family.
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