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Old 13th November 2016, 17:12   #601
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sawyer View Post
Answer instead the following question: what would happen if the PM had only said that from Dec 31 2016, these notes will not be legal tender any more, and will not be accepted for exchange or deposit into any bank account. In any case, at some time, the game of musical chairs that would then have started would have stopped too. What would have been the problem in doing that?
People in possession of these would still need to deposit before Dec 30, but since they are still valid currency, stores/hospitals etc will be expected to accept them and no one can 'not' accept them. Flaw in my method is that one can't transact on Dec 30 and expect the other party to deposit them to bank in a day, so that won't work. So there need to be two time windows here - 1: when these notes are still legal tender, but they aren't reissued to people 2: when these notes are not legal tender anymore, but banks can accept them for exchange.
Right now we are in second time window directly without passing through first window.

Problem - is that it gives an opportunity to hoarders to exchange them easily compared to it is now, and try to hoard in notes of 100s or in other assets like gold or real estate. But it's important to note here - what's the total value of such hoarded cash? If we go with the number that 85% of circulated currency is in 500s and 1000s, it's impossible to convert all those value into notes of 100s without using new notes 100s which is being regulated with limits on withdrawals. So even if people try to hoard as much as possible, it's impossible to convert all the hoarded to cash in denomination of 100s, and the excess value has to get deposited into banks or get converted to assets like gold and real estate.

Which approach is better - or is there a single solution which works - i don't think anyone can answer - without benefit of hindsight, so we will know only after the fact.

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Originally Posted by kartavya View Post
Also this move is aimed at being a big point against fake currencies and the fake currencies used by various organizations which have created issues for the country. Doubt the government could give them time to rearrange their finances or buy everything till then.
Yes, that's right. This would be a continuous problem till we continue to be a society heavily dependent on cash transactions.

Last edited by SilentEngine : 13th November 2016 at 17:22.
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Old 13th November 2016, 17:20   #602
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I don't know the counterfeit currency + terrorism + havala angle well enough to see if that warrants an overnight demonetisation though - perhaps it does. And if so, a good enough reason to do things the way they have been done.
Neither did I. But ran into this article (http://postcard.news/violence-jammu-...denly-stopped/) , that describes the near instantaneous impact. Shared by someone who is in the army, so I'd say it was true.

Does the impact make it worthwhile? I think so.
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Old 13th November 2016, 17:47   #603
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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I read these currency will be accepted in select branches beyond Dec 30. ... ... ...
Select branches of RBI, not ordinary banks. And no questions asked for the smaller sums, probably finishes

This is included in one of the posters that is circulating since the beginning.
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Old 13th November 2016, 18:30   #604
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Finally went to office ATM withdrew 2000 each all in 100Rs notes from two cards (Did this purposefully since this is a restricted entry ATM which only company employees can use). Gave change to some friendly push cart vendors for 500 notes who were very happy.

Went to Phoenix mall which was unusually crowded. No signs of a cash crunch anywhere. Surely there is some stress in the rural and street economy. But not to the extent highlighted in some TV channels.

Last edited by poloman : 13th November 2016 at 18:36.
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Old 13th November 2016, 18:32   #605
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I have switched off television news and only refreshing PTI news website on a hourly basis.

Too much of democratic noise, the sort of noise which you wouldn't hear from our northern neighbor where they even dared to impose 1 child per couple norm.
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Old 13th November 2016, 20:00   #606
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Kind of funny and ironical situation with my mom, She had around 55k home. So after 8th all the traders stopped taking now old 500, 1k notes. She deposited her sum at bank and got not so shiny 2k notes. Now traders are refusing those citing lack of change
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Old 13th November 2016, 21:29   #607
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Update on the withdrawal limit. Finance ministry has provided these updates to the banks.

1. Weekly limit of Rs.20,000 for withdrawal from bank accounts increased to Rs.24,000. Limit of Rs 10,000 per day removed.

2. Banks advised to increase cash withdrawal limit at ATMs from Rs 2,000 to Rs 2,500 per day in the recalibrated ATMs.

3. Banks have been advised to increase exchange limit over the counter from existing Rs 4000/- to Rs 4500/-

4. Banks advised to increase the Business Correspondents limit to Rs 2500/- for withdrawal from bank accounts.

Source : http://timesofindia.indiatimes.com/i...g/55315325.cms

Last edited by TorqueyTechie : 13th November 2016 at 21:30. Reason: Added source
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Old 14th November 2016, 02:38   #608
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Default Re: What next after demonetisation?

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Originally Posted by Jeroen View Post
On the cashless society, Sweden is, currently, the nation getting closest.

I travel to Sweden on a very regular basis and I never ever have Swedish currency on me anymore, havent for years. Strictly plastic, from a cup of coffee to a metro ticket, anything

Jeroen
And in street side shops, most of them accept via an app called 'Swish', You can send money by just typing the mobile number, direct to the linked bank account. I know, we have a similar app, PayTM.

Even I have used very little plastic money in last three years, here.
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Old 14th November 2016, 08:45   #609
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Some people at the ATMs are creating their own kangaroo rules. They are not letting people punch out 2000. Are forcing them to key in 1000, only. Else they forcibly press 'cancel'.
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Old 14th November 2016, 08:59   #610
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Things seemed better yesterday night. Just 10-12 people at the ATM.

One must thank the bank staff. Most people are impatient after waiting in line. The staff are dealing with them continuously for last 4-5 days. Really warrants an appreciation.
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Old 14th November 2016, 08:59   #611
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by asingh1977 View Post
Some people at the ATMs are creating their own kangaroo rules. They are not letting people punch out 2000. Are forcing them to key in 1000, only. Else they forcibly press 'cancel'.
That's absurd! The limit of 2000 is just so that people don't draw too much as they used to earlier. No one can set further limits!
Why do you let anyone even come as close as that to you when you are withdrawing money? Is there no security guy there?
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Old 14th November 2016, 09:58   #612
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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
That's absurd! The limit of 2000 is just so that people don't draw too much as they used to earlier. No one can set further limits!
Why do you let anyone even come as close as that to you when you are withdrawing money? Is there no security guy there?
I think it was just trying to service more people. After all there are only so many notes which can be sent and loaded. afaik they somehow did not anticipate the ATM problem of calibration. Seems the sensor looks at the watermark area (or some other area) which is now changed. Also, the 500 note is probably slightly smaller.

I can see the dilemma, they could not have sent out the 500 notes in advance, since then somewhere they would have been loaded before 8/11. An embargo would have just warned the public that something is amiss.

However, something has hit home. The premium in the NCR on the 'conversion' which had dropped to 15% is now up to 40%.
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Old 14th November 2016, 10:04   #613
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Meantime, few things in the news:
How people with black money are trying to escape the radar
Source:Indian Express, 13 Nov 2016

*This one is important - when you submit a photocopy of any photo id proof at banks/post offices do remember to write the purpose, self attest and mention the date. Also, be careful at photocopier/"xerox" shops, some are even selling copies of these ID's to others
Source:Misuse of ID proofs comes as a shocker, banks helpless
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Old 14th November 2016, 10:30   #614
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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
That's absurd! The limit of 2000 is just so that people don't draw too much as they used to earlier. No one can set further limits!
Why do you let anyone even come as close as that to you when you are withdrawing money? Is there no security guy there?
It somehow happens in India. The law of the jungle prevails. Not happening at all ATMs, but some people have encountered this. It is weird and bad.
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Old 14th November 2016, 10:41   #615
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Default Government scraps Rs 500 and Rs 1000 notes!

The old notes are now going to be permitted till the 24th of Nov in the same places after the demonetization was announced

http://www.ndtv.com/india-news/old-notes-valid-for-10-more-days-amid-dash-for-cash-10-developments-1625070

Last edited by diyguy : 14th November 2016 at 10:48.
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