[rajathv8]

Few observations from my end over the last few days:

1. Experienced the joy of swiping my debit card for lemon tea totaling to a massive Rs.10 in a local fast food joint! The joint had moved the card machine to the self service section to help customers. There was no commotion among the customers and the billing clerk was happy too with the joint being packed like usual.

2. The three ATMs opposite to me house had queues of about 15 ppl each. Well discipline and quick moving queue.

3. I checked with an apartment security guards family near my house. They did not seem to have any issues at all. In fact I was surprised when the security guard said to me that he uses his debit card to shop. Let them know that there is no need to panic and they can go deposit their amount at leisure. Asked them to let me know if they need any info.

4. I was able to fill up fuel in both my bike and car. Got a blood test done for my wife and got all necessary medication without use of cash. On of the pharmacist refused to swipe my card for Rs.60 citing "company policy". On probing further he agreed to swipe. This leaves me with Rs.350 in my wallet and I am taking this as a challenge to see how long I can stretch without withdrawing cash.

[msdivy]

The banks are not replenishing the ATMs with cash. Their priority is distributing cash to those visiting them personally, by standing in the queue in front of their branches. This has led to cash crunch among the people. People are hoarding onto their 100 rupee notes dearly and not spending unless it is very essential. This has affected business who charge between Rs 50 to around Rs 2000. Small item purchases, small eateries, bakeries, vegetable vendors and those who don't have swiping machines are affected. Some card transactions are being declined due to server issues. The real crunch will be experienced when 500s & 1000s are stopped altogether from all exemptions. It is clear that Govt overestimated bank's capability to disburse cash or handle high card transactions.

Personally, I don't carry much cash. Whatever 500s 1000s I had, I have disposed of in them in petrol bunks (instead of standing in queues & exchanging them ). I am down to last note of 100. I have to desperately find an ATM which has cash today.

Originally Posted by poloman

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.

In Phoenix (except for maybe parking), I never had to use cash. I can buy all the stuff there with my card. So that isn't an indicative experience, even remotely.

Originally Posted by Sawyer

Demonetisation is harsh medicine, like a heart bypass,

Kind of agree with you. I feel the Govt rushed into this. They must have prepared better for Nov 8th, like by having more notes of 100s in circulation, encouragement of non-cash transactions for smaller payments (like NFC).

[sachinpk]

Originally Posted by msdivy

I feel the Govt rushed into this. They must have prepared better for Nov 8th, like by having more notes of 100s in circulation, encouragement of non-cash transactions for smaller payments (like NFC).

A move like this have to have a "surprise element" in it, or else it would be futile. From some of the folks in RBI, what I heard is that the initial plans were to start this on March 2017. But they had to advance the dates, as the pictures of new Rs.2000 notes started floating around. The government did try its best to hide the plan, by not printing 500 & 1000 notes in new design, which would make people ask the question - what would happen to the old notes??

My gut feeling is that these issues would get sorted out by this week. People (with one or two states as exceptions) seems to have understood the long term benefits for these. The fact that the current govt. has not got into major scams etc., may have had a positive effect on the government.

Banks have seen huge investments these days. People are dumping all their money in there. Now the fun starts when it is time for them to claim it back . The government is not going to issue notes, based on the value of notes which have come in. They would only release new notes for the value which is officially there out in the market. That is when people who played with fake notes and black money would have a big rude surprise.

[condor]

Question for those who have deposited :

Are the banks checking the authenticity of the notes being deposited ?

[black_rider]

Originally Posted by msdivy

In Phoenix (except for maybe parking), I never had to use cash.

Phoenix have made their parking free of cost. Don't know for how long, but it was free yesterday.

[CarJunki]

Many places in Bangalore are accepting payment via NCPI/UPI this does not require any card swipe and works quite OK. I tried my self at a store for small value transaction (~350 INR).
One thing i have noticed is that there is more chaos in NCR as compared to Bangalore. Possibly because the traders and enterprises in NCR region are not willing to move out of cash.

One thing of note: Please educate your household helpers/cleaners/worker etc. not to act as conduit for depositing money in respective Jan Dhan Accounts. Those accounts are connected with AADHAR and can result in their BPL status being questioned later.
If some one deposits 1Lakh in account, they can not claim to live below poverty line.

[Turbanator]

Are the banks checking the authenticity of the notes being deposited ?

Yes, very much. Besides unlike in past they are not returning notes even if you have some known in Bank and are made to sign a form and share contact details. I think they have instructions to have such data ready. The government will share figures after scheme closes So better check at home before depositing. Small wrongs should be ok but if a large amount is found then it can be a problem.

[CarJunki]

Originally Posted by condor

Question for those who have deposited :

Are the banks checking the authenticity of the notes being deposited ?

Yes, there are machines that will count and verify the authenticity of currency notes. Not just manual counting.
This I saw myself at a Public Sector bank yesterday.

[msdivy]

Originally Posted by sachinpk

A move like this have to have a "surprise element" in it, or else it would be futile.

Like discussed in previous posts, the 'surprise' move will affect those who are hoarding their unaccounted income in 500s & 1000s notes. Note sure what is the total size of such wealth. Secondly, it is not illegal to do business purely with cash. Those individuals will deposit their old cash and get new notes and continue. They will face hiccup for 2 or 3 months, then it will be back to normal. How IT will go after them and on what basis they will discredit their explanation on source of income will be the question.

[sumathindra]

The local "darshinies" are getting card machines and trust me this is the way to go. Irrespective of the amount spent there has to be an alternative of going cashless along with cash to customers.

There are medical/provision stores near my house who have the card swipe machines however have always preffered cash! Such are the guys who have to switch to cashless...

Good move by Modi and what needs to be seen are the "other" things he has in mind to eradicate the "money hungry monsters" Kudos and god bless Modi

[Hayek]

This is a fantastic move, and despite the hiccups in the interim, it will lead to significant benefits for India. When I look around among acquaintances, the ones cribbing the most about this move are the businessmen, doctors and lawyers - which clearly demonstrates where black money stocks are concentrated. The cost of conversion for anyone with material amounts of black money (beyond ₹10 lakhs) is 40% -and the biggest fish will incur even higher costs. Hopefully, this induces at least some of these parasites to go legit. The one's hurt the most are the corrupt politicians and bureaucrats - who will find it virtually impossible to convert their money.

One suggestion - despite the temptation to make a quick buck by facilitating such money laundering, please do not do so.

[RGK]

Originally Posted by rajathv8

Few observations from my end over the last few days:
1. Experienced the joy of swiping my debit card for lemon tea totaling to a massive Rs.10 in a local fast food joint!
3. I checked with an apartment security guards family near my house. They did not seem to have any issues at all. In fact I was surprised when the security guard said to me that he uses his debit card to shop. Let them know that there is no need to panic and they can go deposit their amount at leisure. Asked them to let me know if they need any info.

In my office canteen, food card is accepted even for small purchases like Tea, Coffee etc (Rs 7/-) after abolishing sodexo coupons. Generally I carry little cash especially to mitigate small problems like wheel puncture.

Yes true. I asked my servant maid, flower seller and fruit vendor if they need any currency. They all said, " no sir we have money", Infact my flower seller who works at Kotak Mahindra bank as helper replied " If you need to exchange any money , please give".

Originally Posted by msdivy

Kind of agree with you. I feel the Govt rushed into this. They must have prepared better for Nov 8th, like by having more notes of 100s in circulation, encouragement of non-cash transactions for smaller payments (like NFC).

They want to maintain secrecy. Auditors and Financial consultants are very shrewd and any small hint would have defeated the purpose of this mammoth exercise.

[poloman]

Originally Posted by msdivy

In Phoenix (except for maybe parking), I never had to use cash. I can buy all the stuff there with my card. So that isn't an indicative experience, even remotely.

Kind of agree with you. I feel the Govt rushed into this. They must have prepared better for Nov 8th, like by having more notes of 100s in circulation, encouragement of non-cash transactions for smaller payments (like NFC).

If you discount real estate, Bangalore is one of the 'whitest' economy in the country. This was reflected in market. No panic anywhere. There are extra 100 notes in circulation, this was evident from the fact that I got crisp, out of the mint 100 Rs notes from the ATM. This is a move which affects each and every 125 crore population in the country. One should be living in fool's paradise to expect the change over happen with the snap of your finger. There are bound to be some hiccups. Please be patient. Continue using plastic with even more fervor.
All genuine income earners who under report income. I know many such people are there in this forum itself. Please fall in line at least now. There is no way out, till Modi is at helm.

[SmartCat]

Effects of Demonetization on Maoists:
http://www.firstpost.com/india/demon...s-3104016.html

[sachinpk]

Originally Posted by msdivy

Like discussed in previous posts, the 'surprise' move will affect those who are hoarding their unaccounted income in 500s & 1000s notes. Note sure what is the total size of such wealth.

We can only take the total deposits received in the banks as a bench-mark. Off course there would also be a large section of people who may have come into deposit their paltry sum of Rs.500 & Rs.1000. But from the size of the money collected so far, it seems there are indeed people who stock pile large amounts of cash (for what ever reasons).

Secondly, it is not illegal to do business purely with cash. Those individuals will deposit their old cash and get new notes and continue. They will face hiccup for 2 or 3 months, then it will be back to normal.

Might not be that simple. Assume that a black money chap deposited around 50 lakhs into an account. The bank did not question him, put in his ID card details (took a xerox copy) and accepted the money. Now the maximum he can with draw per week is Rs.24000 (through cheques etc.). How much money can he with draw till the D-Day of December 31st? Around 8 weeks remain and so 8 *24000=1,92,000. The remaining Rs.38,00,000 remains in the account.

How IT will go after them and on what basis they will discredit their explanation on source of income will be the question.

Taking my example above, IT department would by Dec 31st know that this chappie put in Rs.50 lakhs, and have still got Rs.38 odd lakhs which remains in his account. He will have to then show his source of income. If he says he got this money through past n number of years, IT would still ask him then why did he not file tax returns. If annual income exceeds Rs. 2,50,000 a man becomes taxable . Then all he can do is plead guilty, pay the tax for this amount and fines. These are the reasons why we hear stories of black money hoarders asking many job less people etc. to stand in line and deposit Rs.49,999 to their own accounts. The hope is that once this settle down, these people would be forced to pay the money back to the hoarder. If they escape with that cash, then it would be even more fun.