Government scraps Rs 500 and Rs 1000 notes!

[SDP]

Originally Posted by sushantr5

Exchange of notes with new notes, a person can do that only once till 31st December. As understood by everybody, it is not per day Rs.4000. More clarification is found at

http://economictimes.indiatimes.com/...w/55369778.cms

Now this is really interesting. Daily exchange of Rs.4000 cash was seen as loop hole by black money hoarders.

Originally Posted by earthian

How would they enforce that...

Originally Posted by sushantr5

... Data from all the banks will be consolidated. ...

Originally Posted by SilentEngine

...First of all i don't think there is a central system in place to handle reconciliation of things such as this. ....

Originally Posted by Divya Sharan

Not quite! I exchanged ₹6000 in the last 2 days from the same branch using the same ID documents.

Originally Posted by smartcat

What fool the system? Applications are processed by a computer that accepts or rejects?

Originally Posted by FrozeninTime

...These smart people tried to exchange money from different banks ...

Originally Posted by SilentEngine

Same rule is being interpreted differently in different banks/branches! ....

Just checked with somebody I know who was actually on the other side of the counter since yesterday.

1. The system is in place. Its not 'make an entry into a register and submit a faded zerox copy'. The exchange transactions have to be done through a new window/page/UI in the system where the ID is recorded. Without a valid Govt ID, the exchange transaction can not be done at all.

2. The system is online and real-time. So same person trying to exchange 4000Rs more than once in a day ... even from different banks, is getting stopped right at the second attempt.

3. The EconomicTImes news item quoted in the first post seems to be incorrect. It is allowed to exchange 4000Rs per day for 50 days till 31st Dec. Since there is an electronic record for each exchange and it is tagged to the ID, such 'gaming the system' would get flagged and acted upon eventually.

4. Most govt recognized IDs are linked to each other. eg. PAN card is linked to Aadhar Card. So providing different IDs is also not possible most of the time.

System changes ACROSS all banks is not a joke. If Govt pulled this off, that only indicates how well the whole thing is planned, prepared, coordinated and being executed.

[binand]

Originally Posted by JLS

What makes think you that banks are totally unprepared?

Sorry, was going entirely by what I had read today. That ATMs were supposed to open in the morning but couldn't till late afternoon at least; many ran out of notes quickly. That several deaths have been reported across country of people who couldn't exchange notes. That fuel retailers are threatening a strike since they cannot provide sufficient return money. That the actual ATM machines need reconfiguration which will take about a week to complete across India. And so on.

Originally Posted by Chetan_Rao

expecting people in government offices to meet some sort of educational and sensibility criteria isn't an unrealistic or unreasonable expectation. These people are making decisions (legislative, economic, sometimes constitutional) that affect our lives and futures, why shouldn't we be concerned whether they're actually equipped to make such decisions?

Sensibility, yes. Education, irrelevant (assuming when you say "people in government offices" you meant people who are in elected positions and not the bureaucrats). There is no educational qualification in existence that equips one to take decisions that affect the lives of 1 billion people. Secondly politicians don't (well, aren't expected to) make decisions on their own - they listen to in-house experts, outside experts, academics, their own party positions etc. before taking any legislative, economic or constitutional decision.

In my view the single biggest qualification for a career politician is empathy - and a university degree is certainly not a proxy for that particular virtue.

[Divya Sharan]

Originally Posted by SDP

2. The system is online and real-time. So same person trying to exchange 4000Rs more than once in a day ... even from different banks, is getting stopped right at the second attempt.

3. The EconomicTImes news item quoted in the first post seems to be incorrect. It is allowed to exchange 4000Rs per day for 50 days till 31st Dec. Since there is an electronic record for each exchange and it is tagged to the ID, such 'gaming the system' would get flagged and acted upon eventually.

Exactly! 4k per day for exchange, 10k withdrawal, 2k from atm till nov 18th, post which it gets doubled. There's nothing such as just 1 exchange of up to 4k in 50 days. That would be atrocious!

[Sree73]

Originally Posted by Divya Sharan

Exactly! 4k per day for exchange, 10k withdrawal, 2k from atm till nov 18th, post which it gets doubled. There's nothing such as just 1 exchange of up to 4k in 50 days. That would be atrocious!

There is only One time 4K exchange as of now. Why you need a daily exchange of 4K. One can deposit the entire old 500 / 1000 currency into account and then withdraw. If one has huge pile of cash, then it's problem. May have to face the music if proper proof / justification cannot be given.

[drmohitg]

There is a very strong rumor doing the rounds today that after this initial shock, the government will bring back the Amnesty scheme and give people one last chance to declare and pay taxes accordingly. I personally feel they should do this too. This way they earn a lot in taxes as almost all people I know are losing almost 40-50% on their undeclared money. Under the scheme they will lose 45% but atleast will be stress free from then onwards whereas the government will gain a huge amount of tax, the same amount which is being still continued as black money otherwise and is only going from one hand to another.

[poloman]

Originally Posted by Chetan_Rao

Excuse me for responding to something not addressed to me.

While the post your were responding to was probably unwarranted in targeting a particular office, yours isn't any less so.

Targeting particular people in govt. aside (which doesn't achieve anything, esp. in today's polarized Us Vs. Them climate), expecting people in government offices to meet some sort of educational and sensibility criteria isn't an unrealistic or unreasonable expectation. These people are making decisions (legislative, economic, sometimes constitutional) that affect our lives and futures, why shouldn't we be concerned whether they're actually equipped to make such decisions?

Again, this isn't about any ONE person, it's about the whole bunch across the nation in government offices.

The so called richest, powerful, intellectual, prosperous and advanced country on earth just elected a man many people like you called a clown. But ordinary Americans just had one requirement 'common sense' not a great intellect.
This move has been a great leveller. There is a story of a billionaire collecting 90K from beggars to pay off some urgent payment.
http://www.news18.com/news/india/how...u-1310970.html

Originally Posted by drmohitg

There is a very strong rumor doing the rounds today that after this initial shock, the government will bring back the Amnesty scheme and give people one last chance to declare and pay taxes accordingly. I personally feel they should do this too. This way they earn a lot in taxes as almost all people I know are losing almost 40-50% on their undeclared money. Under the scheme they will lose 45% but atleast will be stress free from then onwards whereas the government will gain a huge amount of tax, the same amount which is being still continued as black money otherwise and is only going from one hand to another.

No chance. This will be political suicide. Also even if some one burn 3L crore cash as expected, govt is going to gain that much, since the legal tender obligations of RBI got removed for that much money.

[SDP]

Originally Posted by Sree73

There is only One time 4K exchange as of now.

Sorry, not true. Its once per day. Please check my detailed post just 2 posts above.

Why you need a daily exchange of 4K. One can deposit the entire old 500 / 1000 currency into account and then withdraw. ...

Besides the obvious 'splitting unaccounted money over multiple smaller transactions' reason there are genuine valid reasons as well.
1. Deposit and Withdraw are 2 transactions .. so 2 queues. Exchange is a single transaction, single queue... so one would save time.

2. ATM withdrawal limit is 2000 Rs currently. So irrespective of how much you deposit (or have in account), you can withdraw only 2000Rs (per day) from ATM. With exchange, one can manage 4000 in one shot without standing in withdrawal queue inside the bank.

[JLS]

Originally Posted by Chetan_Rao

Excuse me for responding to something not addressed to me.

No issues, I welcome your views.

Originally Posted by Chetan_Rao

While the post your were responding to was probably unwarranted in targeting a particular office, yours isn't any less so.


Targeting particular people in govt. aside (which doesn't achieve anything, esp. in today's polarized Us Vs. Them climate), expecting people in government offices to meet some sort of educational and sensibility criteria isn't an unrealistic or unreasonable expectation. These people are making decisions (legislative, economic, sometimes constitutional) that affect our lives and futures, why shouldn't we be concerned whether they're actually equipped to make such decisions?

Again, this isn't about any ONE person, it's about the whole bunch across the nation in government offices.

I sensed a politically motivated comment and hence responded - say bit sharply.
I also believe some basic qualification is required, and I am also equally pained when illiterates and criminals rule the states with their raw muscle power.
However - please look at the other side - leadership does not require qualification and a domain knowledge, rather it requires set of other qualities like - will power, a sense to judge right from wrong, capability to judge situation and act decisively, have courage to stand by the decision, lead set of people - to list a few.
The domain experts and degree holders will be available to support.

Do we need a ex-army person to be a PM, others can not take defense related decisions?
Do we need a PM with agriculture background - others can not take decisions related to irrigation and agriculture?
Then why do we need a PM with a doctorate in economics to take economy related decisions?

I am irritated when people do not question dynastic rule or criminal rule or even actors - who remain inactive through out their tenure and worry only about their coffers and their families - while this one is taking initiatives, we say he is not a doctorate in economics and hence his decisions and actions will result in chaos.
Hope you get my point.
Regards,
JLS

[Divya Sharan]

Originally Posted by Sree73

There is only One time 4K exchange as of now. Why you need a daily exchange of 4K. One can deposit the entire old 500 / 1000 currency into account and then withdraw. If one has huge pile of cash, then it's problem. May have to face the music if proper proof / justification cannot be given.

Not the case. I have exchanged 6k in 2 days. I still have some cash left which I'll exchange next week. I did this at the same branch with my PAN card so there's no truth to the only one time exchange thing doing the rounds.

[TD_GHY]

Demonization throwing up surprises

We too received a few "Need some help" calls

[airbus]

Originally Posted by Divya Sharan

Not the case. I have exchanged 6k in 2 days. I still have some cash left which I'll exchange next week. I did this at the same branch with my PAN card so there's no truth to the only one time exchange thing doing the rounds.

My friend, who is a branch manager in a private bank posted this on Facebook:

[vivek95]

Originally Posted by TD_GHY

Demonization throwing up surprises

We too received a few "Need some help" calls

True that. Trust me, I am just beginning to realise in the last 36 hours how much filthy rich people around me are when they started "happily" disclosing about, well you might have already guessed it

And here am I, with Rs. 5 in wallet and surviving on Diwali sweets sent by mom and food coupons of our canteen since last 2 days. No complaints though as I fully support this initiative.

[mayank0782]

Originally Posted by Sawyer

Accepting the scrapped notes voluntarily isn't illegal; all that has changed is that refusing to accept them earlier was illegal, now it isn't so.
Those that accept them and deposit them will have to satisfy the IT folks that these are in line with the income declared in the IT return, so if a supermarket is honest in the income tax it pays, it will not face any problems.
For that matter, even petrol pumps can choose to accept these or not accept these after the extended deadline for them expires, but if they refuse to do so before the deadline expires, they will get into trouble. Obviously again, on the basis that income tax is being paid to the extent it is due.

It IS illegal. The official statement clearly mentioned that these notes are illegal tender starting Nov 8 midnight and should not be used for any transactions. (Except in hospitals/fuel stations etc. till Nov 11). Anyone still found doing transactions in old currency is bound to face legal implications. Also, as someone pointed out the supermarkets/stores/jewelry shops cannot deposit the 500/1000 old currency in their accounts if they received it after Nov 8th.

[JonSnow]

I have also confirmed from friends in banks that the 4k limit is NOT daily. Seems to be some misunderstanding and some banks may have accepted multiple payments which exceeds 4k in total, but as per RBI , it is the total limit for 15 days or so after which they will review.

[Gannu_1]

Tolls have been waived off until 14th. Extended from the previous 11th date. That's a welcome news.