Government scraps Rs 500 and Rs 1000 notes!

[avira_tk]

Originally Posted by sgiitk

Kerala is Gods own country and do not forget the communists think cash is the root of all evil. Even in Kanpur now I find 90% of the ATMs open and banks dispensing the 24,000. In fact I was in the SBI, IIT Kanpur last Wednesday, with the normal salary week queues. A colleague wanted to draw 24k and I think he got al least 10k in 500 notes. I think probably two of the ATMs in front (there are three) were operating.

That slogan is used to promote tourism and its been wildly successful, communist thinking is not the problem. There is no connection between ATMs in Kanpur and the cash situation in semi rural Kerala, rural Kerala has one of the highest coverage for banking services and the fact is that there has been no attempt to rectify the situation of cash shortage.

There are no queues at ATMs in electronic city either, that's because they haven't bothered to refill them. Who stands in a queue when the ATM shutters down or empty?

[benbsb29]

Originally Posted by sgiitk

Kerala is Gods own country and do not forget the communists think cash is the root of all evil. Even in Kanpur now I find 90% of the ATMs open and banks dispensing the 24,000. In fact I was in the SBI, IIT Kanpur last Wednesday, with the normal salary week queues. A colleague wanted to draw 24k and I think he got al least 10k in 500 notes. I think probably two of the ATMs in front (there are three) were operating.

Communist or populist, i don't see how that is related to SBI ATMs remaining shut sans cash, and banks not having enough cash on hand. I've explained my experiences at a ground level, and not what the media seems to portray/depict.

[Latheesh]

Originally Posted by benbsb29

Don't know about the situation in other parts of the country, but in non-metro Kerala where i am now, the money situation in banks is still scarce.

+1 I was in my hometown last Saturday and the situation was same. Went to SBI main branch where they have around 10-12 ATMs and all were out of cash. Roamed around and checked 4-5 other ATMs and result was same. Finally got the money from a Canara Bank ATM (no 500s). All other ATMs were out of cash (HDFC, ICICI, Fed Bank etc). Looks like the whole demonetization exercise is turning out to be a biggest joke.

[mayankk]

Originally Posted by benbsb29

Communist or populist, i don't see how that is related to SBI ATMs remaining shut sans cash, and banks not having enough cash on hand. I've explained my experiences at a ground level, and not what the media seems to portray/depict.

In Delhi NCR, offices/institutions that have ATMs within are flush.
Case in point, Genpact and IITD. And these folks are OK with the whole exercise because it never really impacted them except for a couple of days.
However, none of the ATMs that ordinary folks have access to, especially around suburban and industrial noida, the queues are perpetual. God awful mess!

[msdivy]

Originally Posted by Latheesh

Looks like the whole demonetization exercise is turning out to be a biggest joke.

A question, if cash situation restores to normalcy, does it mean people have gone back to cash like before, or have they gone cashless? In case they have gone back to cash, what changed from before Nov 8th to after Dec 30th?

[sachinpk]

Originally Posted by dark.knight

There are two views to everything and I guess that will never change. However if there is one thing I've learnt, it is NOT to take the official narrative of anything at face value.

Me too am a very cynical person at heart, and firmly believe in the Murphy's law - "Any thing which can go wrong, will". But it is the media behaviour from the year 2014 which has now made me completely against them. Many media houses seems to have taken a personal umbrage that some one whom they thought would lose won with a good majority. The media's myth that they are the "king makers" seems to have got broken and they still seems not to be digesting the fact. Today in very many cases I read news papers only to assume that the reverse happened (than what has been reported).

Originally Posted by avira_tk

There is no connection between ATMs in Kanpur and the cash situation in semi rural Kerala, rural Kerala has one of the highest coverage for banking services and the fact is that there has been no attempt to rectify the situation of cash shortage.

Originally Posted by benbsb29

i don't see how that is related to SBI ATMs remaining shut sans cash, and banks not having enough cash on hand. I've explained my experiences at a ground level, and not what the media seems to portray/depic

Originally Posted by Latheesh

Went to SBI main branch where they have around 10-12 ATMs and all were out of cash.

My wife works for a PSU bank and even now reluctantly confirms that more notes have started coming in. She has been a stoically against the demonetisation drive, which I feel mainly is due to idealogical reasons. And off course the brute fact that bank employees have really taken the brunt of this whole excercise. I had a word with her manager, and she too confirmed that truck loads of Rs.500 notes have reached Bangalore and Karnataka in general. Even in rural areas (which I pass daily) situation seems to have improved.

So I really don't know what is happening at Kerala. Reserve Bank any way would not have any personal enimity to the state. They would do what needs to be done. Only thing which I can presume is that the banks in Kerala have not been able to tally their accounts and give an accurate picture of the currency demand. "പഴയനോട്ട്: ബാങ്കുകള്*ക്ക് കണക്ക് പിഴച്ചു; ആര്*.ബി.ഐ. നേരിട്ട് കണക്കെടുക്കുന്നു." (Banks have got their maths wrong, RBI starts recounting). We must also understand one thing, RBI is not going to give exactly the same amount in new currency, for the deposits shown in each bank. That would defeat the purpose of the whole game. RBI is only going to issue new currency based on its official records and account. It would only pump in notes, if it realises that major part of these deposits are accounted money (with taxes paid etc.). From the way Kerala banks have been behaving I seriously feel that their intention was to scuttle the whole move. The state seems to have been surviving on unaccounted money (i.e tax not paid) which was circulating at good speed, and mainly used for purchases for which Kerala state gets the taxes (and central govt. gets nothing).

Came back to say: Kerala media and the finance minister himself seems to be spreading a wrong information. That any amount of "black money" becomes "white money" the moment it gets deposited in a bank. Then all the black money chaps and hawala operators in the state would have been doing this even before, as it is the easiest way to make "white money".

[sgiitk]

Originally Posted by mayankk

In Delhi NCR, offices/institutions that have ATMs within are flush.
Case in point, Genpact and IITD. And these folks are OK with the whole exercise because it never really impacted them except for a couple of days.
However, none of the ATMs that ordinary folks have access to, especially around suburban and industrial noida, the queues are perpetual. God awful mess!

I also mentioned IITK - SBI in my earlier post. At least 90% ATMs in Kanpur seem to be working 'normally'.

Originally Posted by msdivy

A question, if cash situation restores to normalcy, does it mean people have gone back to cash like before, or have they gone cashless? In case they have gone back to cash, what changed from before Nov 8th to after Dec 30th?

I think there has been some (significant) switch to cashless. In Kanpur the Kirana chaps went cashless in the peak of the demonetization, seeing about 15% of their colleagues who had swipe machines cornering all the business. Now they are again requesting cash, if available. Why, their accountants have warned them that with a reported income of, say 3Lpa how will they explain an income of 2L in a week with a profit of say 10%? They may, deservedly, be under scrutiny for the past years.

Basically, business with a very high No.2 content is trying to go back to cash, others are happy with a higher cashless content. Many general merchants and restaurants now have swipe machines. They are also realizing that there is much less leakage with swipe machines, and the like.

[binand]

Originally Posted by msdivy

A question, if cash situation restores to normalcy, does it mean people have gone back to cash like before, or have they gone cashless? In case they have gone back to cash, what changed from before Nov 8th to after Dec 30th?

I imagine the GoI/RBI is not planning to replace the 15 LCr worth of currency that was demonetized, with 15 LCr worth of new currency. So the currency supply is definitely going to be lower (some links say it would be just a third). So when you say "situation restores to normalcy", it means the demand also has gone down - ie, either economic activity went down or transactions are happening without physical exchange of cash.

[m8002?]

http://www.rediff.com/business/repor...d/20170110.htm
The govt. and IT folks have started the analysis of the deposits. From the article

"We now have trunkloads of data, analysis of which shows that more than Rs 2 lakh was deposited in over 60 lakh bank accounts post demonetisation. The total amount deposited in these accounts is more than Rs 7.34 lakh crore," he said.

If people thought that just depositing the money in the bank would be sufficient, they are in for a surprise :-).

[sukhoi30]

Originally Posted by mayankk

However, none of the ATMs that ordinary folks have access to, especially around suburban and industrial noida, the queues are perpetual. God awful mess!

Look at it from a bank perspective. Till December 30th, most banks avoided filling up ATMs for a simple reason that the cash can be accessed free of charge by other bank customers through their debit cards. Then there is this curious case of money launderers who deposit cash in many bank accounts and then use multiple debit cards to withdraw from ATMs.
How will the banks maintain ATM if they are not getting any revenue from ATM transactions? Most private banks would want their customers to go to the counters and get cash directly from there. This will ensure that their customers are benefited and also they can keep track of the cash they receive from RBI easily. It will also help maintain their cash reserves at healthy level.
People who are scanning ATMs to withdraw money could do well to go to their respective bank branches and withdraw cash using checks instead of blaming the queue in front of ATMs.
I have not visited an ATM for the past 3 months and never needed to because I withdraw from bank directly.

[mayankk]

Originally Posted by sukhoi30

Look at it from a bank perspective. Till December 30th, most banks avoided filling up ATMs for a simple reason that the cash can be accessed free of charge by other bank customers through their debit cards.

What happened to doing good for the greater well being??

Originally Posted by sukhoi30

Then there is this curious case of money launderers who deposit cash in many bank accounts and then use multiple debit cards to withdraw from ATMs.

Anecdotal. There is no data that confirms this "view".
The queues, meantime, are real.

Originally Posted by sukhoi30

How will the banks maintain ATM if they are not getting any revenue from ATM transactions? Most private banks would want their customers to go to the counters and get cash directly from there. This will ensure that their customers are benefited and also they can keep track of the cash they receive from RBI easily. It will also help maintain their cash reserves at healthy level.

When this is supposed to be a short term inconvenience, the banks should have received the same memo as the rest of the population. Maintain your ATM for the longer term good.

Originally Posted by sukhoi30

People who are scanning ATMs to withdraw money could do well to go to their respective bank branches and withdraw cash using checks instead of blaming the queue in front of ATMs.

Not possible for the kind of people who operate out of the area I work in. Industrial units, BPOs, etc, who are either on the clock or are from far flung places. Is it so hard to grasp that people do not actually enjoy standing in front of an ATM????

Originally Posted by sukhoi30

I have not visited an ATM for the past 3 months and never needed to because I withdraw from bank directly.

Good on you. As have I.
However, 4 visits to the bank have yielded 2 returns. This is not my idea of a minor inconvenience. Thats an unnecessary 2 hours wasted on each opportunity.

[ecenandu]

Originally Posted by sgiitk

I also mentioned IITK - SBI in my earlier post. At least 90% ATMs in Kanpur seem to be working 'normally'.

Just curious how you came up with 90%, random sampling at various ATMs?

[greenhorn]

Originally Posted by ecenandu

Just curious how you came up with 90%, random sampling at various ATMs?

Was speaking to a connection in the banking sector - he was saying that they're under a lot of pressure to have ATM's operational, but they dont have enough cash to do that.
The workaround that they've come up with is that they load a little cash into each atm, which would enable a few withdrawals on that atm to ensure it is not shown as inoperative on internal reports - apparently that is enough.

[perty]

Originally Posted by greenhorn

they're under a lot of pressure to have ATM's operational, but they dont have enough cash to do that.

Note also that ATM withdrawal charges are back now. The lucky few will get away without having to pay any charge on withdrawals for having salary accounts with MNC banks, but most of the general public will be charged 15-20 rs depending on their bank for every transaction. I'm sure this is one of the things that's keeping people away from ATM queues and helping to show healthy numbers for the 'ATM queue length' metric of economic normalcy/success.

If one wants to withdraw money to meet daily/monthly needs there are two ways:
1] Minimize the number of transactions and punch in 4500 every time, run the risk of being stuck with 2000rs notes for which it's hard to get change
2] Punch in 1500 or 1000 multiple times, hoping to get 500rs notes and pay up ATM usage charges

All the hoarded cash which was withdrawn when ATM withdrawals were not charged, will now start to come in handy.

Those who went into a cash withdrawal frenzy before Dec 31st, will probably make it through the next few weeks till more usable currency notes come into the system (hopefully).

I guess the banks are the ones laughing all the way to the bank now, flush with money (albeit not in paper form yet) and flush with commissions on cashless transactions

[SDP]

Originally Posted by perty

Note also that ATM withdrawal charges are back now. The lucky few will get away without having to pay any charge on withdrawals for having salary accounts with MNC banks, but most of the general public will be charged 15-20 rs depending on their bank for every transaction. I'm sure this is one of the things that's keeping people away from ATM queues and helping to show healthy numbers for the 'ATM queue length' metric of economic normalcy/success.

If one wants to withdraw money to meet daily/monthly needs there are two ways:
1] Minimize the number of transactions and punch in 4500 every time, run the risk of being stuck with 2000rs notes for which it's hard to get change
2] Punch in 1500 or 1000 multiple times, hoping to get 500rs notes and pay up ATM usage charges


...

What stops people from going to the bank (instead of ATM) and withdrawing upto 24000 Rs in one shot (using a cheque) without any transaction charges?