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Originally Posted by joslicx Rich folks conveniently converted their old currency into new (so they get to keep their black money) while ordinary folks are having to stand in queues or even to do without cash. |
That is over simplification in my humble opinion. You are assuming that 100% of the black money has been converted to white. I don't think that is practically possible, as all black money hoarders would not have the same level of reach which the big wigs have. So yes, 100% of black money may not get caught, but it also does not mean 100% of black money has been laundered.
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If all the govt wanted was to convert old currency into new and have that done via Banks, they could have just given a longer window, say 1 year or 1.5 year, to deposit all 500/1000 notes in own bank account, with the currency still being valid for business all this time, or start with 1000 note only. This old to new currency swap has misfired really.
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With the crooks we have in India, that would flop the day it is launched. The black money hoarders had a reason to use Rs.500 & Rs.1000 notes to hoard money. It is the most easily available one, and also very easy to stock up. Now if these crooks are all told that in one year these notes would get invalid, what do you think they would do? They would dispose all these, and get the new set of notes. Surprise was most important factor here.
When the notes were invalidated, the black money hoarders were given only two choices (legal). Put these notes all through a proper banking channel, so that it gets accounted and new currency issued. Keep quiet about their stock pile of cash, and see them becoming paper after 30th Dec. This whole exercise was a "roll call parade" of currency notes. The black money hoarders had to do away with their stock pile of Rs.500 & Rs.1000. Yes, they did try many tricks but there again 100% protection is not guaranteed.
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Originally Posted by joslicx But isint it ironical that the stated purpose of the exercise has already been defeated, thanks to all the corrupt bankers and the various intermediaries we have in the system. |
Can you let us all know how you have successfully arrived at the conclusion that it is defeated? I am not being sarcastic here. The RBI itself has not completed their analysis and filed the report. People still have time till Dec 30th to deposit their money.
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So as I said in my previous post, if all the effort was for getting big denomination cash in bank, then easier would have been to just give people 1 year instead of few hours!
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The purpose of this was not to getting a bigger denomination from the bank. As I said, this was a very tough process of passing every Rs.500 & Rs.1000 note out there through a banking channel. Only this way can these currencies be audited. These notes had to be invalidated, as other wise there is no motivation for people to deposit the money in the bank. When people knew that if the old notes don't land up in a bank, it becomes just paper every one had to run to a bank (or to corrupt bank officials in a few cases).
Think this as a roll call parade at a hostel, or a military camp. Every 500 & 1000 note is now lined up for a parade, and each one literally says "present sir". Their count is tallied with what RBI (the commandant of the camp) knows as the strength of the camp/hostel. A few shady unauthorised people are standing on parade (fake notes), they get thrown out. A few more shady characters got involved in some crime (black money), and now are in a position NOT to return to the camp. RBI the big boss, now formally would strike them of the camp/hostel strength. They are no more soldiers or bonafide residents (illegal tender).
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Sure some would have used their cash to buy gold/properties/productX but at the end of the day somebody would have had to put the money in the bank! All the money would eventually have come to the bank one way or the other. And nobody would have been inconvenienced.
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I feel you have not understood the purpose of this tedious move. People had started using money, bypassing the country's accounting and auditing system in order to stop paying their tax dues. The people who bought gold/properties etc. would have used their unaccounted money to buy those, and avoided paying tax. This is not the case of some one at the end of the value chain depositing money at the bank. By this move what has happened is that any body who had unaccounted money to buy gold/properties etc is now forced it to deposit it a bank. Since they made the deposits, they need to explain things (and pay tax+penalty etc.). You may have read in news papers that Rs.1080 crores is lying in the co.operative banks (which is outside the ambit of RBI) in Kerala alone. That is unaccounted money till today. That money could have been used for any illegal purpose across the country. The people had that money never paid any thing to the government. Now they have to answer some questions.