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Old 10th November 2016, 14:29   #256
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Something distressing happened now as I was taking a walk after my lunch

Two women, who are in the housework /outdoor cleaning department of my company, ~age of 50, talking among themselves suddenly turned towards me and asked whether I could give them advice when I was passing by them. They were seeking advice on what to do with the money which they had with them which are of 500 rupee notes. They added saying that from tomorrow they do not have any cash with them for their travel to the company and they did not have money for other expenditures other than this currency they have. I asked them, not understanding the complexity of the situation, as to why they cannot get the currency in hand exchanged. One of the women said that their supervisor had offered to exchange the currency however would take 100 rupees for each exchange. Told them not to do that as the supervisor was conning them. Informed them of the legitimate ways of going to the banks and post offices of exchanging the currency that they hold. They were not sure when the banks would open next and were oblivious about banks and post offices exchanging the currency. I could see the disappointment in these women and they said something disturbing. “Saakhu, ee badhukkunu beedaaa, kelassanu beedaaa!!!” which meant I do not want to live anymore nor do I want to work.

Finally had to instill confidence in them saying that your money is your money and no one is going to take it from you. Just have to go to the banks/post offices and get the same exchanged. Do not believe people blindly, but check with others and verify the facts and directed them to the nearest post office.

I was thrilled when an announcement of this magnitude was made by our PM and I completely supported this deed. Now after a couple of days I feel that there could have been more vigor to stress the facts, the intention and misery surrounding this act to commoners
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Old 10th November 2016, 14:35   #257
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Why cannot we live in a world where the highest currency denomination is Rs.100? UK for example, don't have a bigger denomination than 50 pounds.
50 pounds will go a long way in UK. If one is careful you can buy groceries that will last atleast 3 days if not more.
Rs 100 in India will buy you a kilo of peanuts.
This is definitely a good move by the government but once the dust settles I should be allowed to carry any amount of cash with me as long as it is accounted for.
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Old 10th November 2016, 14:47   #258
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by SaNdY_AR View Post
Something distressing happened now as I was taking a walk after my lunch

Two women, who are in the housework /outdoor cleaning department of my company, ~age of 50, talking among themselves suddenly turned towards me and asked whether I could give them advice when I was passing by them. They were seeking advice on what to do with the money which they had with them which are of 500 rupee notes. They added saying that from tomorrow they do not have any cash with them for their travel to the company and they did not have money for other expenditures other than this currency they have. I asked them, not understanding the complexity of the situation, as to why they cannot get the currency in hand exchanged. One of the women said that their supervisor had offered to exchange the currency however would take 100 rupees for each exchange. Told them not to do that as the supervisor was conning them. Informed them of the legitimate ways of going to the banks and post offices of exchanging the currency that they hold. They were not sure when the banks would open next and were oblivious about banks and post offices exchanging the currency. I could see the disappointment in these women and they said something disturbing. “Saakhu, ee badhukkunu beedaaa, kelassanu beedaaa!!!” which meant I do not want to live anymore nor do I want to work.

Finally had to instill confidence in them saying that your money is your money and no one is going to take it from you. Just have to go to the banks/post offices and get the same exchanged. Do not believe people blindly, but check with others and verify the facts and directed them to the nearest post office.

I was thrilled when an announcement of this magnitude was made by our PM and I completely supported this deed. Now after a couple of days I feel that there could have been more vigor to stress the facts, the intention and misery surrounding this act to commoners
Good that you told them not to give any "charges" to the supervisor.

If I were in your place, Additionally I would have told them that ATMS are functioning and banks are open and exchanging cash (with aadhar/PAN) now. If that is also too difficult for them to do, I would have taken 500 rupees and given them 100s so that they could use it for immediate expenses. after all, an additional 500 to deposit for a working person is not something that would bring IT guys at his doorstep!

Last edited by hemanth.anand : 10th November 2016 at 14:49.
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Old 10th November 2016, 14:48   #259
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Moments like these make us feel really thankful for having good contacts, friends and relatives in the banks. Deposited our older notes in my account and came out with 20 notes of the new Rs 500 (the maximum withdrawal allowed in a day is Rs 10,000) within 15 minutes and drove back home.
I have come across people, with similar contacts, who have already downloaded 100's of pan copies from the web, and are going to use their "contacts" (be it the clerk or the manager) to use such downloaded identity to exchange 4k in notes, multiple times, using different ID's.

Please do not be surprised if there are some withdrawals which show against our own PAN, even though we would have never done the exchange.


Of course, there is a limit to which this can be done, but again, till 30th of December, the figure can go quite high.

This is why I hate the way our system works, using jugaad and contacts everywhere.
People do not want to wait in a queue for half an hour and bring to use their contacts. Of course these contacts would in future need similar favors from the other party too.
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Old 10th November 2016, 14:50   #260
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Every single currency in the world suffers counterfeiters. Its an ongoing battle where Govts have to keep ahead of the criminals with improving paper type, quality & security features, in addition to helping manufacturers make machines that can detect fake notes & take it them out of circulation quickly.

China also suffers from counterfeiters, but has NEVER done something drastic like this, to make 85% of value of total currency notes invalid overnight. This is banana economics.

This hugely damages Rupee as a trusted monetary instrument & sets us years behind Yuan now.

Here is how we retired old 500/1000 notes & brought in new ones, in 2005. Smoothly without any major disruption like now. And after all this, I wonder if the new notes are advanced enough to fend off counterfeiters for at least a few months?

http://www.hindustantimes.com/busine...iPouBSM3K.html
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Old 10th November 2016, 14:56   #261
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Good that you told them not to give any "charges" to the supervisor.

If I were in your place, Additionally I would have told them that ATMS are functioning and banks are open and exchanging cash (with aadhar/PAN) now. If that is also too difficult, I would have taken 500 rupees and given them 100s so that they could use it for immediate expenses. after all, an additional 500 to deposit for a working person is not something that would bring IT guys at his doorstep!
I myself did not have any 100's or 50's with me except for 2 * 500's and I am living on Sodexo :-) for the time being. I would have given them a couple of hundreds if I had some with me for sure, and not wanting any 500's back. Waiting for the crowd to clear from the bank to seek my turn for exchange.

I have already advised them on banks and shown them the way to the nearest post office which they were not aware of.
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Old 10th November 2016, 15:00   #262
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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This hugely damages Rupee as a trusted monetary instrument & sets us years behind Yuan now.
Really? How does it damage the rupee as a trusted monetary instrument?

Hope you realise that 1000/500 bills are just one format of rupee. Rupee is now mostly electronic.
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Old 10th November 2016, 15:04   #263
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Really? How does it damage the rupee as a trusted monetary instrument?

Hope you realise that 1000/500 bills are just one format of rupee. Rupee is now mostly electronic.
Because only banana economies invalidate such a huge % of currency overnight, not 2.5 Trillion dollar economies. Do google, there is NO history of major economies like US or China doing so. Yes, Zimbabwe did.

Also, RBI itself does regular estimates of how much counterfeit currency is there in the market at any time. Unless there was a HUGE recent currency breach, such an action is unwarranted. But they should disclose the truth & not cover up with raising false hopes that this is mainly an action on black money.

And not sure what you mean that 'Rupee is now mostly electronic'? Our market is still largely a cash economy outside the major metros!

Last edited by gsurya : 10th November 2016 at 15:06.
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Old 10th November 2016, 15:05   #264
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Samurai View Post
Doesn't the ID/PAN have to match the account holder?
You can exchange upto 4000 Rs at any bank or post office with ID proof.

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Originally Posted by poloman View Post
No account is required and you can exchange the notes over the counter.
Yes, no account is needed. But nobody else can exchange cash with your ID. ID holder should be present in person to exchange the cash or give an authorisation letter to somebody else to exchange for him.
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Old 10th November 2016, 15:06   #265
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Because only banana economies invalidate such a huge % of currency overnight, not 2.5 Trillion dollar economies. Do google, there is NO history of major economies like US or China doing so. Yes, Zimbabwe did.
That's not an answer to my question. How does this damage the trust in rupee?

BTW, India itself had banned 1000 rupee bills in the 70s. That's history.

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And not sure what you mean that 'Rupee is now mostly electronic'? Our market is still largely a cash economy outside the major metros!
Most money in banks is stored as digital information. Most high value transactions (money exchange) happens electronically via credit card and wire transfers. Cash is just another way of allowing money exchange. In fact, non-retail corporates get almost all their income via electronic means. They pay all the salaries via electronic means.

Last edited by Samurai : 10th November 2016 at 15:14.
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Old 10th November 2016, 15:11   #266
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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That's not an answer to my question. How does this damage the trust in rupee?

BTW, India itself had banned 1000 rupee bills in the 70s. That's history.
There are lakhs of tourists in India today. All of them are struggling to now get their currency changed. Plus banks have no clear instructions how to handle tourists, many have been turned away today. Also currency traders will put this down as a black mark against India increasing our risk level.

Yes we did it in 1978 once & clearly that did nothing to fight black money. But our GDP size is 20+ times since then we are a much bigger market & need much more responsible fiscal governance.
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Old 10th November 2016, 15:12   #267
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Because only banana economies invalidate such a huge % of currency overnight, not 2.5 Trillion dollar economies. Do google, there is NO history of major economies like US or China doing so. Yes, Zimbabwe did.

Also, RBI itself does regular estimates of how much counterfeit currency is there in the market at any time. Unless there was a HUGE recent currency breach, such an action is unwarranted. But they should disclose the truth & not cover up with raising false hopes that this is mainly an action on black money.

And not sure what you mean that 'Rupee is now mostly electronic'? Our market is still largely a cash economy outside the major metros!
Counterfeit is only less than 1% of the currency in India. The real aim is to demonitise currency stashed up illegally. What has happened to the rupee? It is strong at 66.5 per dollar. Markets are cheering. So what exactly is your problem? Everything is being done systematically. First gave everyone an opportunity to open bank accounts. Then ran an amnesty scheme for the hoarders at least to make a sacrifice and join mainstream. Now it is time for surgical strike.
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Old 10th November 2016, 15:22   #268
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Also currency traders will put this down as a black mark against India increasing our risk level.
Don't understand how this follows. Currency traders don't deal in small pieces of paper. If anything, this move would bring in more certainty to our economy (less of estimates and more of actuals) making the currency a lot more robust.
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Old 10th November 2016, 15:24   #269
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This Government is causing inconvenience to common man. I have not seen any money being retrieved from various so called scams. It looks as if some dictator is dictating terms. It just doesnt feel like I live in democracy. This kind of uncertainty and forcing me into digital in the harp of curbing black money is nothing more than draconian. If Government regularly tries to flush out, time will come rupee will lose its value and Gold hoarding will start. This will be a catalyst for parallel economy.
Unethical practices and unjust laws contribute to inequality leading to black money. It looks as if Government finances are in taters and want to squeeze money from poor and middle class.

For all who support digital transaction do you want big corporations to know where and what you spend. With this data they are already controlling you through forced ads and what not.

What happened in Greece is a warning to all people Government if it wants will take all that money if country runs into financial crisis. Bank accounts are first affected and if God forbid if it freezes transaction or limits what will you do in emergency? The future looks bleak not for corrupt but for common man. I pay my taxes also but the way it is implemented is what I am against.

Last edited by SDP : 10th November 2016 at 16:27. Reason: Deleting the Mallya part as its off-topic. Lets stay on the topic please.
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Old 10th November 2016, 15:29   #270
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@frozenintime : We may not suffer like Greece, but we are certainly showing Zimbabwe like panic despite being relatively much more sound.

And articles like this reveal the reality, this is really more about politics of the coming state elections than to do with economics.

https://t.co/gfiDVvEQyk
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