![]() | #1456 | |
BHPian Join Date: Apr 2010 Location: Delhi
Posts: 224
Thanked: 104 Times
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But I agree that the cost of card transactions has to come down. And it will. Last edited by LithiumSunset : 5th December 2016 at 07:23. | |
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![]() | #1457 | |
Senior - BHPian Join Date: Dec 2006 Location: Bangalore
Posts: 1,285
Thanked: 947 Times
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If you ask me, this "overhead" or the cost of using card might actually be lesser than what the small shops usually forego in round-offing, if I may use the word. The real reason probably is, they just dont want to report their actual income to the tax authorities (which they will have to, if the transactions were all in digital) | |
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![]() | #1458 | |
Senior - BHPian Join Date: Dec 2008 Location: Bangalore
Posts: 3,041
Thanked: 3,710 Times
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To take a Bangalore example: if we want people to leave their private vehicles at home and take public transport en masse, then BMTC must not just increase the frequency, reach and comfort levels of their buses but must also lobby for things like congestion charges, increased cost of parking, lower priority for private vehicles on roads etc. as well. | |
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![]() | #1459 | |
Senior - BHPian ![]() Join Date: Aug 2006 Location: Bangalore
Posts: 1,732
Thanked: 2,435 Times
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I have doubts on the lending rates dropping. The deposits mopped up by demonetization is a liability to banks. They have to return to the account holders after Dec 30. They cannot use for any other purpose. So the lending rates won't drop. Last edited by msdivy : 5th December 2016 at 11:44. | |
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![]() | #1460 | |
Senior - BHPian Join Date: Dec 2008 Location: Bangalore
Posts: 3,041
Thanked: 3,710 Times
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1. You are assuming all the deposits went to savings accounts. At least some part of it would have been made into FDs etc. 2. Even the part that go into savings accounts are employed by the banks to generate revenue in the near term (in the call money market, as working capital loans etc.). The thing is, banks have to pay interest to depositors, even if it is in savings bank accounts. They can earn revenue only if they lend the deposits so raised. That is, in the loans market there is now higher supply; so to increase demand to match supply the price (interest rate) has to drop. Here is how it plays out: Fresh deposits are made to disturb equilibrium, central bank lowers interest rates to raise debt demand, deposit rates also go down correspondingly, some deposits are withdrawn due to lower interest rates (switch from investment basket to consumption basket), this stimulates demand in economy, entrepreneurs seek debt funding to increase production, new equilibrium is reached. | |
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![]() | #1461 |
BHPian Join Date: Nov 2006 Location: Bombay
Posts: 71
Thanked: 32 Times
| ![]() Ground reality is most of the businessmen have successfully converted their stash atleast in Mumbai only ones facing problems are those with 50 Cr + stash. |
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![]() | #1462 | |
Senior - BHPian ![]() Join Date: Dec 2007 Location: Gurugram
Posts: 7,940
Thanked: 4,690 Times
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Lending rates have been frozen for now by the 100% Incremental CRR. You have the money but cannot use it. Let us see on the 7th/9th. | |
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![]() | #1463 | |
BHPian ![]() Join Date: Feb 2013 Location: Mumbai
Posts: 344
Thanked: 503 Times
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In hindsight, at the time of announcement, if the following were done, then a lot of such unaccounted money could not have been converted. 1. The Rs. 1000 note should been banned outright with a provision to only deposit them in bank accounts. 2. Rs. 500 notes should be exchanged but only around Rs. 2000 worth of it per person per day. 3. Exchange of Rs. 500 notes should have been allowed only for 15 days post demonetization. 4. At toll booths, Rs. 500 should have been legal tender only if the toll rate is above Rs.100. 5. At airline ticket and rail tickets centers, Rs. 500 should have been made legal till Dec 30th, but with a rider of no cancellation. 6. All cooperative banks should have been allowed to exchange Rs. 500 notes only if the person is a member or has an account in that bank. Again up to a limit of Rs. 2000 per person per day to be maintained. Its too late to say all this but would have controlled the queues. The indelible ink idea should have been thought out much earlier. Even now, I think this exchange of old currency should stop immediately, indelible ink or not. This is the only way to stop the circulation of the old currency notes. | |
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![]() | #1464 | |
Senior - BHPian ![]() | ![]() Quote:
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![]() | #1465 | |
BHPian ![]() Join Date: Jan 2016 Location: Ahmedabad
Posts: 596
Thanked: 2,054 Times
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Last edited by earthian : 5th December 2016 at 15:30. Reason: added | |
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![]() | #1466 | |
Senior - BHPian Join Date: Mar 2010 Location: Bangalore
Posts: 1,206
Thanked: 3,533 Times
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What surprises me is the eagerness shown by some quarters to paint this entire scheme a big failure even before the Dec deadline. I simply cannot understand the motivation behind that. | |
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![]() | #1467 |
BHPian ![]() Join Date: Jan 2016 Location: Ahmedabad
Posts: 596
Thanked: 2,054 Times
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I think we are missing the point here and jumping the gun. Black wealth declaration is not on the cards, yet. Black money is. Hence cash. In order to declare Rs13800 cr or Rs 2,00,000 cr ( Cannot comprehend what size room would be required to stock these notes); one must have the money (cash) in possession first. Isn't that right? |
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![]() | #1468 | |
Team-BHP Support ![]() ![]() | ![]() Quote:
Declaration scheme is for wealth, not just cash. You can declare gold, land, and other assets. | |
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![]() | #1469 | ||
Senior - BHPian Join Date: Jun 2014 Location: Bangalore
Posts: 1,432
Thanked: 1,042 Times
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![]() But I must say that looks like the government did not expect so many people to deposit the money in the banks. They (the government) would have thought that the black money hoarders would just burn their ill-gotten wealth. But that did not happen. I feel that many black money hoarders would deposit the money, hoping that "negotiate & settle" the whole thing with the IT department folks (who are generally not known to be a very honest bunch). I would like to eagerly watch on how the government uses its IT department to make this scheme a success. Quote:
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![]() | #1470 | |
BHPian Join Date: Dec 2009 Location: Delhi/NOIDA
Posts: 113
Thanked: 49 Times
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![]() Of course, one can 'pull some strings' and find some work around to this situation (being a part of empowered class) but I deliberately chose not to - this being more of a case study (of sorts) about the hassles a common man is facing in front of banks each and every day since the Nov.08th announcement. ![]() Last edited by Puneet.S : 5th December 2016 at 17:26. | |
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