[.sushilkumar]

Seems like cash woes are not going anywhere soon in metro cities at least.

Went to bank today to withdraw cash. Despite being a privilege customer & branch being hub branch for whole city, was told there is no cash & I might get lucky if somebody in line asks for less than his usual weekly quota of 24000. Some how they were left with some 17000 in the end, which he distributed between us two people waiting for cash.

This was my third visit to branch for money and has returned empty handed earlier. My gut feeling is that situation is normal in small towns. It is major metro cities where the crunch is being felt more due to high population.

[RSR]

Originally Posted by binand

The idea is to treat this 2% as a cost of doing business. I don't know how much is the cost of doing business on cash basis, but given the popularity of cards I expect it is more than 2%? These costs:
...

As shocking as it may sound here, the preferred payment method for me is the cheque! Yep, the good old cheque it is, followed by electronic bank transfer in a distant second place. Cash payments constitute a small portion of my business at best.

Technically, mine is a manufacturing unit. Manufacturing is the primary activity, and not selling. Of course, even made-to-order items have to be eventually sold - usually to known long-term customers who prefer to pay by cheque, and the rare one through electronic bank transfer.

It's only from new/unknown customers who place small/sample orders that I don't accept cheques (for understandable reasons!) I cannot turn away such customers either, as every new/unknown customer of today has the potential to turn into the known, long-term customer of tomorrow.

I had decided to wait till the dawn of the next year before asking for a swipe machine from the bank (as the crowds would reduce and bank employees wouldn't be as stressed out). I hope they don't dish out some rubbish excuse / procedure when I do ask for the same. As I'm not in any tearing hurry to get the machine, I wouldn't mind waiting if there is a genuine shortage.

[Hayek]

I know lots of people have been complaining about the slow transition to a digital economy. But it is happening - both in metros and in smaller towns.

The metro example (and apologies if I have posted this before) - in my apartment block in Mumbai, the Fruit Vendor started accepting PayTM on Day 1 after demonetisation. Within 3 weeks, the vegetable vendor, istriwallah, guy who collects clothes for dry cleaning, small nearby medical and kirana stores and even the car cleaners have moved to accepting some form of electronic payment (PayTM, Credit Cards or in the case of the car cleaner - NEFT into his bank account). You may say this is someone who lives in an affluent gated community speaking from his ivory tower - but the vendors are not affluent by any stretch of imagination. The one guy who insisted on cash - the owner of a famous auto components shop in Opera House whom I usually buy engine oil from. You can be sure that was because he does not want to declare his illegal income and not because he can't get a POS machine.

Am on vacation in a Hill Station right now. I managed to book a cab from the nearest (non metro) airport through a car agency I found online - transferred Rs. 1000 as an advance to the agency's bank account, and paid the balance after my drop through NEFT again. I also had to do some local site seeing. The cab hire fares from my 5 star hotel were exorbitant, but I could speak to one of the concierge staff to identify an outside cab vendor. Told him that I could not pay cash (not because I don't have it - but to check the process out). He happily gave me his bank details, and let me pay by NEFT the day after my trip (because IMPS did not work after hours for some reason). I agree that every vendor may not be so trusting (there is a value to being introduced by a 5 star hotel concierge) and IMPS should have worked - but these are teething troubles. As the UPI system irons out its glitches, no one will need to use cash except if he wants to evade taxes. And the incentive to get the glitches ironed out arises only with a drastic step.

[sachinpk]

Originally Posted by pramodkumar

Isn't that plain wrong? I mean, I have some expenses, like I have to travel across delhi and my cab fare doesn't cross 400 per trip(I know paytm is an option, but I don't like to be forced to use a particular option) and I do need change, why should the bank deny it just because I have weaker negotiation skills?

I don't think it is wrong. The bank's job is to give you money which was demanded by you. If they cannot do that, that is wrong. But to insist that the money has to be given in a way which pleases you, that cannot be guaranteed. Rs.2000 notes are still valid currency, and RBI vouches its authenticity. And even before Nov 8th people had problems with change. For example, I could never buy Rs.10 worth of peanuts (on the way back from office), if I put up Rs.500 currency note in front of the vendor. Goto a wine shop, things were better. Minimum pay out was Rs.100, and the bar man would easily give you back Rs.400.

The bank staff are arrogant in every public sector bank that I have dealt with, they don't care about the customers, its the first time in the history of the country that they were asked to work on a war footing, else its nothing exemplary to any other profession in the world, there are other jobs that we often ignore that usually play a more vital role.

I agree with you 100%. Attitude issues are there, but that also did not start after 8th Nov, 2016. These issues have to be addressed separately. The PSU bank fellows are unionised and that leads to a very bad attitude. Infact I was surprised that this excercise was still carried out using the heavily unionised bank staff. Especially when all the major labour unions of the bank employees have a different political idealogy (than the current govt.). So if you ask me, there is certainly a way to make these people work.

Originally Posted by .sushilkumar

I might get lucky if somebody in line asks for less than his usual weekly quota of 24000. Some how they were left with some 17000 in the end, which he distributed between us two people waiting for cash.

Which also means that there are lots of people (for what ever reason) withdrawing Rs. 24,000 on any given day. Why is that required is would be the next question??

My gut feeling is that situation is normal in small towns. It is major metro cities where the crunch is being felt more due to high population.

I don't know from which city you are from. But if a large population, wants Rs. 24,000 withdrawal/person in a week, that city seems to have lots of "pay by cash" transaction system. In small towns, Rs.24,000 may even help a person to live a decent life for a month.

My gut feeling. In cities like Bengaluru, there still are business groups who know that people would approach them for their services. And that if pressurised the people who avail the services, would pay by cash. Food caterers, all those shamianah setup fellows, and people who arrange the kid's birthday bashes; these are the folks who top's my list. Next in line would be Pandit-jis.

[ecenandu]

Originally Posted by greenhorn

I think you missed his point - that such rules and restrictions were making it unduly hard for businesses when all and sundry are being forced to go cashless, and the PM Claims that everyone has got one already. What if he was just opening a business?

THe fact is doubly made worse by the fact that these hurdles are being put up by State owned banks, when they should be leading from the front for implementing govt initiatives. I recall a while back that we got an ICICI machine (sometime circa 20009) for a new business that we opened without any fuss. The fees and conditions were a bit steep, but we got one promptly

Hmm, government banks are less customer friendly. And regarding the government's claim, they are cherry picking as usual, a common ploy used by politicians.

Originally Posted by pramodkumar

What part of his rant you didn't understand? When there is blaring ads about cashless economy on radio every 10 minutes(I am not kidding its true) getting a POS machine is still a royal pain. No wonder why private players like PayTM are having a field day.

Regarding prerequisites for getting a POS machine, actually there is none, my friend got a POS machine from SBI branch the moment they decided to move their current account into SBI, the rentals were waived off for one whole year, so actually its the bank manager's discretion to give a POS or not.

Regarding the money withdrawal, using POS with Credit cards; its not so widely prevalent as you claim it to be. Even if it is, and if you know such places, as a responsible law abiding citizen, you should actually report such places, these small so called "law abiding shops" are actually laundering money this way, he will have money in his account and he pays using accumulated black wealth and he makes a profit as well on it, what a nice business plan!

Pramod

Pramod, are you sure there are no prerequisites? If yes, then OP should meet the manager in person and clear the issue.

If you go and read my post again, I never said it is widely prevalent.

And me being a responsible law abiding citizen. Truth to be told, I am afraid to report such matter fearing the backlash. I don't have the courage.

[pramodkumar]

Originally Posted by ecenandu

Pramod, are you sure there are no prerequisites? If yes, then OP should meet the manager in person and clear the issue.

If you go and read my post again, I never said it is widely prevalent.

And me being a responsible law abiding citizen. Truth to be told, I am afraid to report such matter fearing the backlash. I don't have the courage.

I am quite sure they don't need that kind of paperwork, Ignore what I said on being a responsible citizen, my intension was not to make you feel bad, we people have a lot to lose, its not wise to be a crusader and fight the evil, if I was in your place I will try to see if I can avoid such wrong doings. That's it.

Pramod

[vibbs]

Originally Posted by sachinpk

Which also means that there are lots of people (for what ever reason) withdrawing Rs. 24,000 on any given day. Why is that required is would be the next question??

Why is that required is no body's business. As long as it is my legally earned money being spent legally, it should not be anybody's prerogative to take a call on how much I should keep in the bank and how I spend the rest. By cash or by electronic means.

[sgiitk]

Just came across a PTI release that over 4,172 crores of undisclosed income have been caught by the Taxman, with over 105 crores of new currency.

In my view this is peanuts. As they dig deeper I will not be surprised at a figure ten times higher. I also hear that about 5 lakh crores has come back into the banks from cash hoarders. How much of it changes colour is a moot point. Not bad for demonetization as a whole.

[avira_tk]

There is a system in place that allows POS machines to function as ATMs, a Google search throws up 1000/- as the daily limit. This is a way to allow quicker settlements with merchants and better availability of cash, of course, there is a paper trail, for all the transactions.

Using Credit Cards to withdraw money with a 10% service fee is prevalent in nearly all establishments, if you have a good relationship with the owner, the profit is worth the tax payable, that's why shopkeepers do it. This is obviously not something they advertise.

[sachinpk]

Originally Posted by vibbs

Why is that required is no body's business. As long as it is my legally earned money being spent legally, it should not be anybody's prerogative to take a call on how much I should keep in the bank and how I spend the rest. By cash or by electronic means.

The whole demonitisation was started because the bold part was not happening very correctly and efficiently. Thus, the government had to force every one to deposit what ever money they have, and then check on the income sources. Once that issue is resolved (and after people pay their tax dues), it is back to normal life.

[pmbabu]

Originally Posted by sachinpk

The whole demonitisation was started because the bold part was not happening very correctly and efficiently. Thus, the government had to force every one to deposit what ever money they have, and then check on the income sources. Once that issue is resolved (and after people pay their tax dues), it is back to normal life.

Don't you think this is like punishing 100% of the people because the 1% or whatever %age corrupt is also in the same crowd?

[mayankk]

Originally Posted by pmbabu

Don't you think this is like punishing 100% of the people because the 1% or whatever %age corrupt is also in the same crowd?

I think it's more of taking the easy way out, because the correct way would have been too tedious and long drawn and not result in any substantial political advantage.

[Samurai]

Originally Posted by vibbs

Why is that required is no body's business. As long as it is my legally earned money being spent legally, it should not be anybody's prerogative to take a call on how much I should keep in the bank and how I spend the rest.

When you say spend legally, it obviously means you are paying sales tax, vat or service tax while doing the spending. That is fine. However, when you legally spend using cash, government has no way of enforcing that the vendor reports it correctly, and passes the tax component to the government. Most vendors who accept cash, don't charge tax, and don't report their income.

Relying on the goodwill of people to collect the taxes and report the income, while transacting with cash, has never really worked.

Originally Posted by pmbabu

Don't you think this is like punishing 100% of the people because the 1% or whatever %age corrupt is also in the same crowd?

Are you saying only 1% of the people who do cash transactions fail to collect taxes and don't report their income? In my experience, more than 50% of the cash-only transactions don't collect tax, which automatically means they are not reporting income either.

[.sushilkumar]

Originally Posted by sgiitk

Just came across a PTI release that over 4,172 crores of undisclosed income have been caught by the Taxman, with over 105 crores of new currency.

In my view this is peanuts. As they dig deeper I will not be surprised at a figure ten times higher. I also hear that about 5 lakh crores has come back into the banks from cash hoarders. How much of it changes colour is a moot point. Not bad for demonetization as a whole.

Going via headline in TOI Delhi edition.

Based on initial estimates that as much as Rs 4 lakh crore of undisclosed funds may have flown into bank accounts post-demonetisation, the tax department is gearing up to serve notices on those who cannot explain the source of the money .
Data with the income tax department shows that till December 17, cash deposits of Rs 80 lakh or more added up to nearly Rs 4 lakh crore, which flowed into 1.14 lakh bank accounts . Tax department officials suspect that a large chunk of this amount could have come from those who dodged taxes.

Source - http://epaperbeta.timesofindia.com/A...30122016001040

Seems like IT folks have hired some excellent big data analysts on their rolls. Tough times ahead for few lucky people.

[SDP]

Originally Posted by mayankk

I think it's more of taking the easy way out, because the correct way would have been too tedious and long drawn and not result in any substantial political advantage.

Can you please elaborate what would be the correct way?
Are you talking about just widening the tax-net or the broader demonetization with its multi-pronged objectives?