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Demonetisation: The objective of accountability behind the ordinance extinguishing old notes

What was the agenda behind the cabinet approval for promulgating of an ordinance extinguishing the Reserve Bank of India’s liability for cancelled Rs 500 and Rs 1,000 notes? Was it a mere fulfilment of legal formality so as to prevent chances of someone claiming his right to encash disbanded notes on the basis of a promise to pay the bearer? If it was to fulfil only mere legal formalities, then the obvious question will be on what basis circulation of these very currency notes were made illegal with effect from 8 November midnight? Being a layman in legal matters, I leave it to the concerned experts to ponder over it.

Representational image. PTI

Representational image. PTI

What else could be the motive behind the move now? Out of Rs 15.4 lakh crore scrapped currency notes, already Rs 14 lakh crore, which is a whopping 90.9 percent, have already come back to the banking system. By any standard, the current step is a major success, one aimed at making unaccounted income accountable. This is a clear indication of the grip of the incumbent government. It also indicates how seriously people take decisions initiated by the prime minister.

Assuming that still around Rs 1 lakh crore do not get accounted, nobody would have shown guts to claim its value merely on the basis of promise to pay the bearer. That would have remained as mere pieces of paper. At the most, these scrapped notes would have got the honour of getting exhibited under palliate clubs. Anyway, the government’s treasury would have got enriched by an amount equivalent to unclaimed part of scrapped currency notes which may not be more than five percent of the scrapped notes.

What could be the hidden agenda? What would be implications of the ordinance? It definitely reflects determination of the prime minister to tackle menace of black money for which he was given mandate by the people. Among those who declared their income, there will be those who end up paying penalty for not filing returns on time. At the most, their social image may get tarnished. But they don’t have alternate escape route under the determined government.

Who are these persons who don’t mind their ill-gotten wealth getting drained away? Obviously, these are the persons who simply cannot afford to declare their income and pay penalty as other simpletons have done. In this case, resolving of one problem means getting trapped into a much more dangerous web. How can corrupt politicians and bureaucrats declare black money and get away by simply paying penalty? Instead of resolving the problem, it would lead them into a deeper trap. It would automatically lead to investigation about sources of their income. They would end up accepting bribe which means likely end of their career and jail term.

It also has to do with nature of the person called Narendra Modi. Once he takes initiative to reach the target, he is known for trying to achieve it at any cost and go forward with the killing spirit. Perhaps the prime minister is determined to clean up the entire political spectrum and government machinery without sparing anybody. In the process, he may have to sacrifice many of his own colleagues apart from taking on political opponents. No doubt, it is really a bold step. It looks like the prime minister is aware of tremendous risk involved. His real support and strength in this fight against black money is from common men. Despite facing hardship of standing in queues for hours together, they still stand by the Prime Minister. In fact, the measure initiated by the prime minister to tackle black money has become a true people’s movement today. Any movement blessed by people is bound to be a success despite numerous hurdles.

(Dr Jagadish Shettigar is a former member of Prime Minister’s Economic Advisory Council and currently, Economics Professor at Birla Institute of Management Technology, Greater Noida.)

First Published On : Dec 31, 2016 17:25 IST

Demonetisation: Delhi Police recovers Rs 3.25 crore in old notes from hotel raid

New Delhi: Delhi Police raided a hotel in Karol Bagh here and recovered Rs 3.25 crore in demonetised notes from five persons, police said on Wednesday.

Based on secret information, the Crime Branch conducted a joint raid with Income Tax officials late last night at Taksh Inn in Karol Bagh and found five persons in two rooms of the hotel carrying a total amount of Rs 3.25 crore, said Ravindra Yadav, Joint Commissioner of Police (Crime).

Representational image. PTI

The five men are carriers and have been identified as Ansari Abuzar, Fazal Khan, Ansari Affan, Ladu Ram and Mahaveer Singh, he said. The recovered amount was kept in different suitcases and cardboard box.

It was found during interrogation that the money belongs to some Mumbai-based hawala operators, said the officer.

“They had hired packaging specialists who pack these notes in such a manner that they are even undetectable by airport scanning machines. Experts in packaging are using some tapes and wires which pass through X-ray,” he said.

The Income Tax department has seized the cash and is analysing the mobile phone details of these people since their phones contain details of lot of other hawala operators, he added.

First Published On : Dec 14, 2016 11:24 IST

Demonetisation is biggest scam of the year, must be investigated: P Chidambram

Former finance minister P Chidambram demanded a special investigation team to probe the arrests involving huge amounts of new currency notes while adressing the press on Tuesday. The senior Congress leader also hit out at the Narendra Modi government saying that the move has broken the back of the people and will have long-term effects on the Indian economy.

Referring to the recent arrests were the authorities found people with lakhs of new notes, the former finance minister called demonetisation the “biggest scam of the year and that it must be investigated”.

“Demonetisation is the worst attack on the poor. The Prime Minister should go out and see for himself the real picture before ATMs. People are angry, but they have no choice but to stand in queues,” he said, adding that demonetisation has affected the livelihood of 45 crore people in the country who depend on daily wages.

Senior Congress leader P Chidambram. AP

The congress MP also questioned the government’s decision to keep District Cooperative Central Banks out of the move. “Because of this, the farmers are suffering, there is no money to buy seeds, to hire labour or buy fertilisers. There’s no money even to buy supplies,” he said.

The Narendra Modi government had demonetised old notes of Rs 500 and Rs 1,000 in a televised announcement on 8 November in order to curb down black money, corruption, fake currency and terror financing. The announcement has led to a cash crunch in the country.

Chidambram also said that the government has been shifting the goal of the move. “First it was black money. They have now found a new goal called cashless economy. But you can’t go from 3 percent cashless to 100 percent cashless in a month. Where are the machines? Where is electricity?” he said.

Terming demonetisation as a case of “khoda pahad nikli chuhiya“, the senior Congress leader alleged that unlike what the government claims, “the move has actually helped bring more black money into the system”.

Answering a question on whether the reduction in interest rates will help the economy, Chidambram said while in a normal economy interest rate going down is good, but it’s not the same for India.

“This is not a normal situation. India is going through a very bad period of tepid growth. Credit growth is lowest in 20 years. The aggregate demand is low; demonetisation has made it even lower. There’s no green investment either. These are the numbers that are relevant. Any government must look at these figures.”

As for inflation, he said that low demand has helped control inflation but the economy won’t surive a long period of low demand. “If there’s no demand, it will affect production. Some factories have already started laying off people,” he said.

The senior Congress leader also attacked the government and it claims that the situation will normalise post 30 December. “The government has withdrawn 23,000 crore notes from the market. To print that many notes, it will need at least seven months time,” he said, adding that the cash crunch will continue.

Chidambram also asked the Reserve Bank of India to release the minutes of the meeting that took place before the 8 November announcement of the move by Prime Minister Modi, saying that it would give the nation a clear idea as to who said what about the move.

First Published On : Dec 13, 2016 13:17 IST

Thirty days of demonetisation: The death of the Rs 1,000 note is a sad news for Indian economy

Exactly a month after the Rs 1,000 note, lovingly known as “Ek Hazaar” and its younger brother the equally loved “Panch Saw” were taken into custody by the Reserve Bank of India (RBI), it is believed that the older brother has met its end under mysterious circumstances.

Tight-lipped RBI officials declined to give any details of what occurred and attempted to divert the attention by underscoring their success in releasing a slimmer and more robust avatar of the younger brother into circulation.

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Since Panch Saw has refused to make any statement, what transpired behind the closed doors is not known, but the sad, if yet unconfirmed demise of the highly loved Ek Hazar has sent a wave of sorrow through its supporter and fans.

A weeping businessman said that the bringing in of a muscleman twice the size of Ek Hazaar and then falling back on the weak younger brother of the deceased was a dreadful situation. Asking not to be identified, he confided that the inside story indicates there are irreconcilable differences between the newly inducted bully called “Do Hazaar” and the popular Panch Saw, the gap between them being literally unbridgeable.

“They are not even on speaking terms,” he said, “But don’t quote me on it.”

It is believed that Panch is deeply upset about the way his older brother was treated and sees Do Hazaar as an impostor and a nuisance.

Official RBI sources rejected the theory that there had been a bungling within its premises leading to the death of Ek Hazaar.

Even now the RBI spokesman was not prepared to confirm the passing away of the once powerful leader of the fiscal party whose influence had been all pervasive.

When confronted with the fact that not a single bulletin had been issued over the past thirty days with regard to the health of the Rs 1,000 note and the public’s right to know what exactly the position was, the RBI spokesman said Ek Hazar was in custody as a precautionary measure against corruption, and was hale and hearty and would soon be released.

But exactly thirty days after being stripped of its powers, Prime Minister Narendra Modi, Arvind Kejriwal and Rahul Gandhi were seen making a beeline for the RBI main office. The RBI governor was closeted with them on the top floor leading to the speculation that something had gone wrong.

If Rahul Gandhi had gone there it could only mean the note had gone to its heavenly abode.

As people began to gather outside the RBI one staunch supporter of Ek Hazaar said, “If the news is true we now have no second line of defence. No economic pyramid. The people have been left in the lurch and no one is telling us what has happened.”

According to sources Ek Hazaar, once the bulwark of the Indian financial system was a victim of shortsightedness and poor medical treatment. Seeing as how the younger brother was resurrected it is pretty much inconceivable that the older sibling is allegedly dead.

A famous economist who had been flown in from the International Monetary Fund (IMF) said he believed this was a case of eco-medical malpractice because nowhere in the world is the top currency followed by one worth 25 percent in value.

“The trauma is so massive,” he added, “That an amputated currency totem pole will forever limp along despite any prosthetic that may be recommended. If Ek Hazaar is actually dead, it is indeed a very sad day for the Indian economy.”

First Published On : Dec 8, 2016 13:36 IST

Karnataka: Unaccounted cash worth Rs 11.13 lakh, mostly in new notes, seized in Belagavi

Belagavi: Unaccounted cash to the tune of Rs 11.13 lakh, mostly in the denomination of new Rs 2000 notes, and mobiles were recovered from two persons near the Deputy Commissioner’s office in Belagavi on Thursday, police said.

Representational image. AFP

Representational image. AFP

The sleuths of City Crime Investigation branch on a definite tip off took Manjunath and Vishwanath into custody, they said.

Of the recovered cash, Rs 8.5 lakhs was in denomination of new Rs 2,000 notes, Rs 1.5 lakh in Rs 100 currency notes and remaining Rs 50,000 in demonetised Rs 500 notes, they added.

The duo who claimed to be engaged in gold business said they had brought the cash meant to be handed over to a third person but failed to produce any valid documents, police said.

They were produced before the court and remanded to judicial custody, they added.

First Published On : Dec 8, 2016 08:17 IST

Top 5 demonetisation news of the day: Prithviraj Chavan suggests Rs 200 notes; BJP leader held

The central government’s decision to demonetise high value Rs 500 and Rs 1,000 currency notes was taken after detailed deliberation and not in haste, said the Reserve Bank of India (RBI) on Wednesday, adding that it will maintain a steady supply of new currency to ease the cash crunch. The central bank also said Rs 11.85 lakh crore or 80 percent of junked notes have come back into the system in the last one month.

“The decision was not and has not been taken in haste, but after detailed deliberations,” said RBI governor Urjit Patel, following the fifth bi-monthly monetary policy review. “The consequences that have emanated from that were taken on board. That is why the planning, the process and implementation were what it was, keeping in mind the high secrecy that had to be maintained. The central bank and the government were conscious of certain immediate difficulties for the public at large and all efforts were made to mitigate them,” he added.

Patel told the media that problems of common citizens were at “the top of our radar” and all dispensation was put into place “so that the period for disruption is minimal while we recalibrate our note supply to the denomination that were not withdrawn in terms of legal tender character”.

BJP leader arrested in Kolkata

Manish Sharma, a BJP leader and party candidate from Ranigunj in Bengal’s Burdwan district, was nabbed from Baguihati on Wednesday, while trying to exchange old currency notes in bulk, said a senior officer of the Kolkata police’s special task force.

Six other persons involved in the mining business were also arrested along with Sharma for trying to exchange old currency notes.

Bank guard fires in air to disperse crowd in Punjab

Representational image. PTI

Representational image. PTI

With an impatient crowd trying to force their way into a branch of a private bank in Punjab’s Budhlada town, a security guard fired in the air to disperse them, police said.

The security guard standing outside an HDFC Bank branch in Budhlada, nearly 190 km from Chandigarh, fired three shots in the air from his weapon after being unsettled by the rush at the bank trying to get notes exchanged. The crowd, which almost damaged the glass doors of the bank branch, ran helter-skelter after shots were fired in the air. No case was registered by the police.

CBI arrests bank official, two businessmen

The CBI arrested a senior manager of Central Bank of India and two owners of a firm in Bengaluru for allegedly violating RBI guidelines on scraping of Rs 500 and Rs 1,000 notes, under sections of IPC dealing with criminal conspiracy and cheating as well as abuse of official position under the Prevention of Corruption Act.

The agency had registered an FIR against S Lakshimnarayana, senior manager and branch head of Central Bank of India’s Basavanagudi branch, and directors of Omkar Parimal Mandir, S Gopal and Ashwin G Sunkur. During the searches at the residence of bank officials and private persons, the agency claimed to have recovered incriminating documents, including bank vouchers, counterfoils, DDs, property documents, hard disks and Rs 5,91,500 in cash in old Rs 500 and Rs 1,000 notes.

The three were called for questioning at the CBI office in Bengaluru on Wednesday morning and were placed under arrest after they allegedly failed to answer questions.

UK MP calls on India to end stress for NRIs

Britain’s longest serving Indian-origin MP Virendra Sharma has called the Indian government to end the uncertainty surrounding demonetisation of Rs 500 and Rs 1,000 notes for NRIs and PIOs.

The 69-year-old Labour party MP said he received several calls and letters on the issue from citizens in his constituency, the heavily Indian-origin area of Ealing, Southall, in south-west London. The move has rattled many British-Indians, who make up 2.5 percent of the population of England and Wales according to a 2011 UK government census and the Indian-born MP wants New Delhi to authorise Indian banks with operations in the UK to open accounts for deposits of Indian currency.

Former CM suggests introduction of Rs 200 notes

Former Maharashtra chief minister Prithviraj Chavan has suggested that currency notes of Rs 200 denomination should be introduced, going on to say that there was no need to bring into circulation Rs 1,000 notes again.

Chavan aired this view during his speech in the state Assembly, where the Opposition parties criticised the Modi government for troubling the poor people, including farmers, vendors and villagers. On restrictions imposed upon district cooperative banks, the Opposition demanded that chief minister Devendra Fadnavis use his good offices to convince the central government and Finance Minister Arun Jaitley to solve the issue, as transactions banks have come to a grinding halt.

“The rural economy is on the verge of collapse,” Chavan said, questioning the wisdom behind the demonetisation decision. Ridiculing the idea of a cashless economy, Chavan said no where in the world has such kind of economy been fully implemented.

With inputs from agencies

First Published On : Dec 7, 2016 20:17 IST

Demonetisation: CBI arrests bank official, 2 businessmen for fraudulent exchange of old notes

New Delhi: CBI on Wednesday arrested a senior manager of Central Bank of India and two owners of a firm in Bengaluru for allegedly violating RBI guidelines on scraping of Rs 500 and Rs 1,000 notes.

Representational image. PTI

Representational image. PTI

The agency had registered an FIR against senior manager and branch head of Central Bank of India’s Basavanagudi branch S Lakshimnarayana and Directors of Omkar Parimal Mandir — S Gopal and Ashwin G Sunkur — on Tuesday and carried out searches at various places.

The three were called for questioning at the CBI office in Bengaluru this morning and placed under arrest after they allegedly failed to answer many of the questions, the CBI said in Delhi.

The agency has booked them under sections of IPC dealing with criminal conspiracy and cheating as well as abuse of official position under the Prevention of Corruption Act. During the searches carried out yesterday at Bengaluru which included the residence of bank officials and private persons, the agency claimed to have recovered incriminating documents, including bank vouchers, counterfoils, DDs, property documents, hard disks and Rs 5,91,500 cash in old Rs 500 and Rs 1,000 notes.

In its FIR filed in the designated CBI court in Bengaluru, the CBI alleged that from 15 November to 18 November, the bank manager had issued 149 demand drafts for amounts less than Rs 50,000 in favour of a Pune-based finance company in violation of RBI guidelines.

The total value of the demand drafts was Rs 71 lakh which the branch manager accepted in demonetised notes from the owners of the company, the agency said.

The amount was staggered and 149 DDs were issued for less than Rs 50,000 which was allegedly done by the accused fraudulently to convert the demonetised notes.

The firm’s owners subsequently cancelled the drafts and encashed the amount thereby clandestinely converting old notes into valid bills, the CBI alleged.

First Published On : Dec 7, 2016 16:09 IST

Demonetisation: Toll plazas to receive payment through credit, debit cards

New Delhi: All toll plazas in national highways will receive payments through credit or debit cards and e-wallet henceforth besides accepting old currency notes of Rs 500 till 15 December.

Representational image. Reuters

Representational image. Reuters

The Home Ministry has also asked the states to deploy adequate police so that no potential law and order problem arises across the toll plazas. In a communication to chief secretaries of all states, the Home Ministry said to facilitate smooth passage of national highways users, several measures have been undertaken including fee collection through credit/debit cards through point of sale system installed by the banks.

Besides, the toll plazas will install fee paid instruments, e-wallet, electronic toll collection and accept old currency notes of Rs 500 till December 15 as a special case, Joint Secretary in the Home Ministry Dilip Kumar said in a communication.

The ministry said anticipating a scenario of likely shortage of currency notes which may result in longer than normal traffic at the toll plaza booths, state administrations are requested to deploy adequate police forces and duty magistrates for facilitating smooth passage of national highway users.

It asked the states to ensure the availability and deployment of adequate officers and police forces so that no potential law and order problem arises across the toll plazas. Toll collection across all the national highways has resumed with effect from midnight of 2 December.

First Published On : Dec 5, 2016 20:41 IST

Demonetisation: How Narendra Modi changed the currency ban narrative

By Praveen Chakravarty

Prime Minister Narendra Modi addressed the nation on November 8, 2016 to announce the withdrawal of Rs 500 and Rs 1,000 notes.

The speech (in English) lasted 25 minutes. The Prime Minister uttered the phrase “black money” 18 times in this speech. He mentioned “fake currency” or “counterfeit” five times in the same speech.

Prime Minister Narendra Modi. AFP

Prime Minister Narendra Modi. AFP

It was unambiguously clear from the Prime Minister’s speech that the primary motivation for the sudden withdrawal of nearly 86% of the country’s currency was the evil of black money.

The next day, the papers termed it a “war on black money”. PayTM, a mobile payment app, hailed the decision with a full-page ad and the Prime Minister left for Japan.

By the time the Prime Minister returned from Japan, the move had been christened “demonetisation” in English, “notebandi” in Hindi and there was a war-time like rationing of currency in the country.

The Prime Minister made six speeches across the country on the demonetisation policy between November 13 and November 27, including his radio address to the nation, Mann Ki Baat, according to data available on the Prime Minister’s personal website. The text of all the speeches are available on the website.

A data analysis of the speeches (after translation) reveals a shifting of the narrative of the demonetisation action and its objectives.

In his speech on November 8, 2016, when he announced the demonetisation policy, the Prime Minister used the phrase “black money” four times more than “fake/counterfeit currency”.

By November 27, he used the phrase “digital/cashless” thrice as much as “black money” with no mention of “fake currency”. Recall, there was zero mention of “digital/cashless” in the initial November 8 speech.

The chart below shows the ratio of the three narratives–“black money”, “fake currency” and “cashless/digital pay”–in each of the Prime Minister’s speeches over three weeks and seven speeches.

In other words, in the same speech, how many times did the Prime Minister use each of these phrases to describe the reasons for demonetisation which can be used as a proxy to understand what the Prime Minister believes was the primary objective for this mammoth exercise.

The saffron line representing the “cashless/digital” phrase in the Prime Minister’s speeches went from 0 in the November 8 speech to a 73% ratio in the November 27 speech.

The green line representing the phrase “fake currency” went from 22% to 0 in the same period suggesting the Prime Minister no longer believes that terror financing was the primary or secondary driver of this demonetisation exercise.

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The black line representing the phrase “black money” went from a high of a 80% ratio on November 8 to only 27% on November 27. Apparently, it is no longer a “war on black money” but instead a “war on all currency” to go cashless.

So, between November 8 and November 27, the objective for the demonetisation exercise has swung from black money elimination to going cashless, as evident in the Prime Minister’s speeches.

To be sure, urging citizens to use less cash and resort to digital transactions is a laudable objective and must certainly be encouraged. But when a decision was taken to remove a whopping 86% of the country’s currency overnight with all its attendant costs, one would have hoped there was one strong rationale for it, even if it meant achieving multiple objectives.

Either the Prime Minister has realised that the original primary objective of eliminating black money may not be met or there was not adequate thought behind the decision. Either way, it is worrisome.

(Chakravarty is Senior Fellow in Political Economy at IDFC Institute & Founding Trustee, IndiaSpend. Author thanks Puja Das of IndiaSpend for help with Hindi translation.)

(Indiaspend.com is a data-driven, public-interest journalism non-profit.)

First Published On : Dec 5, 2016 10:11 IST

Gujarat temples introduce steps to accept cashless donations

Vadodara: With the demonetisation move resulting in a drop in donations, some of the famous temples in Gujarat have started introducing e-wallets, ATMs with deposit facility and swipe machines to accept cashless donations.

Representational image. Reuters

Representational image. Reuters

Dhanraj Nathwani, vice president of Dwarka Mandir Vyasthapan Samiti, told PTI over phone, “I have taken up this issue to help devotees make donations without crumbling under the impact of demonetisation.”

“Lakhs of people visit Dwarka and feel gratified and contended with the blessings of Lord Dwarkadhish,” he said.

To popularise cashless transactions among people, Gujarat Chief Minister Vijay Rupani had on Tuesday inaugurated the digital donation system at the famous Ambaji Temple in Banaskantha district to accept donations through debit or credit card using swipe machines.

He made a donation of Rs 31,000 using his wife’s debit card.

Sources in the Ambaji temple trust said after demonetisation, donations have come down by at least 30 percent. With the new cashless facility, the donations are again likely to go up, they said.

Somnath temple trust secretary Pravinbhai Laheri said they are now in talks with a digital wallet company to accept funds and donations digitally.

The trust has also begun accepting e-payment for the ‘prasad‘ (food offered to gods) at the temple located in Gir Somnath district.

Ravindra Upadhyay, manager of the famous Ranchhodraiji temple, located at Dakor in Kheda district, about 50 km from Vadodara, said they have initiated the process of introducing e-wallets, swipe machines and ATMs as they witnessed the donations going down by about 20 percent after 8 November.

First Published On : Dec 1, 2016 13:25 IST

Goa tourism shifts majority of its services on cashless payment facilities

Panaji: As Goa works its way towards becoming India’s first cashless society, the state tourism department has shifted majority of its services on cashless payment facilities.

Representational image. Reuters

Representational image. Reuters

“Whether hotel reservations, package tours, cruise rides or any other tourism service, the Goa Tourism Development Corporation has introduced systems that have facilitated cashless transactions, both online and offline,” GTDC Chairman Nilesh Cabral said on Thursday.

“Cashless facility is made possible by GTDC through online web portal, booking of services and products through mobile app available on iOS and android platform at GTDC residencies and restaurants through point-of-sale (POS) machines, thus enabling a 360 degree approach to the new cashless system,” he said.

The GTDC is also working to introduce pay wallets and  talks are underway with leading service providers so that it can be accepted as another mode of cashless payments.

“To further this process, the launch of the new e-commerce portal and mobile app in February this year has  provided a foolproof platform for e-business and cashless transactions, also bringing other tourism stakeholders into the cashless circuit,” Cabral said.

As per GTDC’s records, cashless transactions to the tune of Rs 2.5 lakh to Rs 3 lakh are executed daily for various services provided by the corporation, which is in addition to cashless transactions recorded on its e-commerce portal and mobile app, he said.

GTDC’s General Manager (Hotels) Gavin Dias said, “All GTDC residencies are provided with point-of-sale (POS) machines to facilitate cashless payments and most tourists prefer to use this facility. It is encouraging to see tourists opting for cashless transactions.”

Dias said in addition to cashless business for hotel accommodation, GTDC, through the e-commerce portal, has direct tie-ups with more than 160 hotels and also with channel managers like Staah and Maximojo for tourists to book accommodation using cashless modes of transaction.

Cashless transactions have already become very popular and an easy way out for both tourists and tourism stakeholders, he said.

Goa attracts more than 5 million tourists annually and GTDC is eventually looking at bringing in every tourism stakeholder, whether tourist taxis, souvenir shops, guest houses, restaurants etc, under cashless business.

First Published On : Dec 1, 2016 12:45 IST

Demonetisation day 21: SBI branch in Imphal vandalised; woman killed over dowry in Odisha

The Opposition observed Jan Aakrosh Divas to protest against the demonetisation move and the Left-dominated Tripura and Kerala went for Bharat Bandh, on Monday, affecting banking services in these two states. However, banks across the country stuck to normal banking hours.

Many ATMs are still running dry despite recalibration of more than 60 percent of such cash-dispensing machines. There are also reports that banks in major metros are getting less than their cash requirement leading to chaos at the branches. And though bank branches across the country reopened to very short queues after a two-day break on Monday, news updates of day 21 since the demonetisation of higher denomination notes show that there were more than reports of cash shortage at some locations.

Congress leader dies during protest march

Gwalior District unit chief of the Congress party Darshan Singh, 56, died of cardiac failure on Monday while taking part in the Jan Aakrosh march to protest the demonetisation decision of the central government.

Some Congress workers taking part in the protest march said the march began from Phoolbagh around noon. They walked up to the office of the Divisional Commissioner and submitted a memorandum there.

It was after this that Singh complained of chest pain. He was taken to the hospital where doctors declared him dead.

Currency exchange gang busted

Police have arrested seven members of a currency exchange gang and seized Rs 8.20 lakh in valid notes from them, a senior official said. Allegedly, the gang was involved in exchanging banned notes on commission basis for valid currencies in Peddapalli district.

Acting on a tip-off about the gang, a Police Sub-Inspector, G Vijender, was sent as a decoy customer looking to exchange old notes worth Rs 11.50 lakh for new ones to one of its members, Poorna Chandra Sekhar, said K Vijayender Reddy. Sekhar promised Vijender to give valid notes of Rs 8.20 lakh in exchange of banned currencies of Rs 11.50 lakh and asked him come to Peddapalli railway station to complete the deal, he said. But the moment Sekhar and six of his gang members reached the spot, they were apprehended.

Representational image. PTI

Representational image. PTI

Customers vandalise SBI branch

Angry customers vandalised an SBI branch on the campus of Manipur University in Imphal on Monday after the bank refused to let people withdraw Rs 24,000 each. Although police reinforcements rushed to the bank, no arrest was made. Normal bank work was disrupted, witnesses said.

The State Bank of India manager said the trouble started when two customers demanded Rs 24,000 each — the maximum a person can take out from the bank every week after demonetisation. When it was pointed out that senior bank officials had declared that such big amounts could not be withdrawn, they turned unruly and did not allow bank work to continue. However, an SBI customer, said people who had been queuing up from early in the morning became furious when they were informed they could take out only Rs 2,000 each from their savings accounts. Sensing the mood, the SBI said they could take out Rs 4,000 each. “But the bank will be closed once the cash runs out,” one officer told the crowd. On hearing this, the account holders started vandalising the office, the witnesses said.

Newly-wed Odisha woman killed

A newly-married woman was killed by her in-laws in Odisha’s Ganjam district as her father failed to give dowry of Rs 1.70 lakh in new currency, the state police said on Monday.

Prabhati of Rangipur village married Laxmi Nahak of the same village on 9 November, a day after the demonetisation of Rs 500 and Rs 1,000 currency notes was announced. Her family had earlier agreed to give Rs 1.70 lakh in cash as dowry. However, when her family offered the money in old demonetised notes on the marriage day, the groom’s family refused to accept the money and instead demanded new notes within stipulated time. Prabhati’s parents said her in-laws killed her on Sunday as they did not get the new notes in dowry, the police said. Inspector Alok Jena, who heads the Golanthara police station, said a case of dowry death has been registered.

Indian expats in UAE affected

Expatriates in the UAE are finding it difficult to send money to their families in India due to the continuing cash crunch caused by demonetisation, according to a media report, by Gulf News.

The cash crunch has badly hit rupee remittance transaction to India through bank transfers and instant cash transfers, according to the staff at some money exchanges in Abu Dhabi. Moreover, the situation has deprived Indian expatriates of an excellent opportunity to cash in on a record low exchange rate of rupees, it said. North Indian villages, especially where access to banking system is limited, mainly depend on instant cash transfers, have taken a hit.

With inputs from agencies

First Published On : Nov 29, 2016 14:15 IST

Demonetisation: Arvind Kejriwal questions funding of BJP MP Mahesh Sharma’s daughter’s wedding

Demonetisation: Arvind Kejriwal questions funding of BJP MP Mahesh Sharma’s daughter’s wedding

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New Delhi: Delhi Chief Minister Arvind Kejriwal on Monday attacked the Bharatiya Janata Party (BJP) MP Mahesh Sharma following his daughter’s marriage and asked how he managed the marriage expenses in Rs 2.5 lakhs post demonetisation.

File photo of Arvind Kejriwal. Getty images

File photo of Arvind Kejriwal. Getty images

“BJP MP Mahesh Sharma’s daughter wedding. Is he making all the payments in cheque? Is he managing the marriage in Rs 2.5 lakhs? How were his notes exchanged?” Aam Aadmi Party (AAP) national convenor Kejriwal asked.

The AAP has been protesting against the central government’s demonetisation of Rs 500 and 1,000 currency notes.

The opposition has called for Bharat Band on Monday in protest against the 8 November announcement.

Serpentine queues have been witnessed outside banks and ATMs, as many anxious people waited for hours to deposit or exchange their spiked currency notes or obtain cash.

First Published On : Nov 28, 2016 11:16 IST

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Demonetisation: Post Offices see rise in cash deposit, Rs 32,631 cr deposited since 10 November

New Delhi: People have deposited a staggering Rs 32,631 crore in nearly 1.55 lakh post offices across the country following demonetisation of Rs 500/1000 currency notes.

The post offices have also exchanged about Rs 3,680 crore of old currency notes between 10 November and 24 Department of Posts Secretary BV Sudhakar told PTI.

“From 10 November to 24 November, we have exchanged 578 lakh notes of value of about Rs 3,680 crore. If you look at the deposits, 43.48 crore old Rs 500 and Rs 1000 notes were accepted as deposits, and their value is about Rs 32,631 crore,” he said.

Representational image. ReutersRepresentational image. Reuters

Representational image. Reuters

As many as 1.55 lakh post offices — about 1.30 lakh in rural areas and the rest 25,000 in urban and semi-urban areas — are playing a “prominent role” in the entire exercise, he added.

During the same period, Rs 3,583 crore was withdrawn from post offices, Sudhakar said. Following demonetisation of Rs 500 and Rs 1000 notes from midnight of November 8, people rushed to banks and post offices to deposit or exchange old currency notes. Serpentine queues were seen in front of banks, ATMs and post offices with people lining up to get valid currency notes.

Those without postal savings accounts were also permitted to exchange the old notes up to a certain limit in the post offices by producing their identity cards.

While the window of a fortnight to exchange these currency notes over-the-counter at banks and post offices ended on 24 November, the old notes can be deposited in bank accounts until 30 December.

Asked about the break-up for exchanges, withdrawals, deposits made in rural versus urban areas post demonetisation, Sudhakar pointed out that nearly 88 per cent of post offices are in rural areas and the rest in urban locations, and accordingly majority of the transactions too may have been in rural areas.

“It really depends on the demand… Even urban area locations such as Sansad Marg post offices in New Delhi, has seen high volume of exchanges…depending on the demand, disbursements vary, and hence one cannot exactly say… But based only on composition of post offices, we can say that more would have been in rural areas,” he said.

Sudhakar said the Department has made special arrangements to ensure that cash reaches rural post offices. Sudhakar said the entire situation was being monitored through control rooms at directorate and each state down to
the level of subdivisions.

“It was micro-monitored up to village level…every hour we were taking feedback…The crowd was intense, and there was a sudden surge so we had to pull all staff for this work,” he said adding that staff worked for xtended hours till 8 pm.

People up can deposit old Rs 500 and 1,000 notes in Post Office Savings Account at present, he said, adding such notes cannot be deposited in other schemes like fixed deposits, monthly income scheme and recurring deposits.

“Earlier we were accepting deposits in all saving account that is savings bank, recurring deposits, monthly income schemes and even certificates. Now we are accepting only in the savings bank account so that is the restriction in all 1.55 lakh post offices,” he said.

First Published On : Nov 27, 2016 13:57 IST

Demonetisation has reduced crime rate in Mumbai: Manohar Parrikar

Panaji: Defence Minister Manohar Parrikar on Saturday claimed that due to the Centre’s demonetisation move, the rate of crime in Mumbai, including contract killings, murders, extortion and drug trafficking, has come down drastically.

Defence Minister Manohar Parrikar. PTI

Defence Minister Manohar Parrikar. PTI

“The decision taken by Prime Minister Narendra Modi is a historic one. The black money, corruption money, terror funding and drug money has received a jolt,” Parrikar said while addressing BJP’s Vijay Sankalp rally in Aldona constituency in North Goa.

“One of my friends from Mumbai was telling me that the supari (contract) killings have reduced there. There is no lack of people offering supari, but there is no money to pay. In the last 20 days, the murder rate has come to half in Mumbai,” he claimed.

“The instances of extortion have also reduced in Mumbai. If anyone goes to the builder and tries to extort money, he is ready to give the sum, but that money has no value as they are old notes. Due to this, now the one who wanted to extort money has also stopped. Even here in Goa, extortion attempts from the builders have stopped,” he said.

According to Parrikar, the movement of narcotics in Mumbai has collapsed due to lack of money to fuel it.

“Thanks to demonetisation, the crime graph has been reduced in Mumbai. Modi has eliminated drug lords, terror funders, fake notes and black money,” he said.

Stating that Goa will become cashless by December 30, Parrikar appealed to the people to cooperate to fulfil this dream of the Prime Minister.

“By December 30, we will become a cashless society. Goa has a capability to become a model state for rest of the states,” he said.

“We always feel safe with cash money…A bank manager was telling me that pensioners rush to the bank on every first of the month…He said the pensioners don’t feel satisfied till they count notes,” Parrikar said.

“But I feel in the current era, there is no need for notes. In the Information Technology sector, Goa’s penetration is more than that of Singapore. We can show the way for the country,” he added.

First Published On : Nov 27, 2016 08:40 IST

Note ban: India goes raving mad over new Rs 500 currency’s Houdini act

After Prime Minister Narendra Modi trashed the old Rs 1,000 and Rs 500 notes, the new Rs 2,000 note appeared pretty quickly like an angel that dropped from heaven to save India from its financial tribulations. But it created a turmoil of its own. The angel, however, turned into a phantom and very few wanted it. The new Rs 500 note took its own time to come. But come it did, at long last, though to make only a cameo appearance in some cities, reminding us how ephemeral life itself is. It appears, disappears, appears again and disappears again with a swiftness that would have put renowned illusionist Houdini out of business.

A file image of women arguing with a bank employee. Reuters

A file image of women arguing with a bank employee. Reuters

Reports of people going into rapturous joy over the brief sightings of the Rs 500 note have been pouring in from across India. Here is the story from Bengaluru.

Siddlaghatta Channabasappa was Bengaluru’s first citizen to set his lucky eyes on the transcendental beauty of the new Rs 500. As the 78-year-old erstwhile teacher watched his four notes flutter out of the ATM machine on Bharatma Road, he at once realised how Archimedes must have felt when he screamed Eureka after discovering whatever he discovered. Channabasappa went nuts. With a broad smile that smoothened a few wrinkles on his face, he held the new notes aloft in speechless wonder.

The members of the queue behind him forgot why they were there and milled around the old man, shouting in delirious joy: “Aidu nooru banthu (500 has come)”. Some patted Channabasappa on the shoulder, some hugged him and congratulated him on not only getting his own money but also in the shape of the Rs 500 which had hitherto been an elusive mirage.

A couple of able-bodied Kannadigas mounted Channabasappa on their shoulders and to the nearby Lakshmi temple, with others on their toes.

Once at the temple, they dropped the old man on the floor, sprinkled kumkuma and rice mixed with turmeric powder on the notes and, after placing them at the feet of the goddess, performed arathi. The priest marvelled at the proceedings, his greedy eyes not leaving the currency even for a moment.

After the pooja came speeches.

An English professor was the first to speak. He said: “How wondrously beautiful and utterly ravishing this new note is! Nothing on the planet except the Cauvery can rival its elegance and pristine beauty. I quote from Shakespeare’s Romeo and Juliet.

 As yonder lady o’er her fellows shows.
The measure done, I’ll watch her place of stand,

And, touching hers, make blessed my rude hand.
Did my heart love till now? forswear it, sight!
For I ne’er saw true beauty till this night
.

Well, it’s afternoon really, for it is now 3.40 pm. Thank you.”

A young boy with a smartphone in hand was the next to share his thrill: “IMO, this note is the cutest thing after Priyanka Chopra. It’s a kickass knockout! LOL. My father, mother, brother and I have been standing in queues in four shifts for god knows how many days. This is the first ATM that’s giving money and giving Rs 500s too! Narendra Modi is super-duper.”

“Yes, yes,” agreed a woman with a baby in her arm. Wiping tears with the end of her sari pallu, she said between joyous sobs: “Only Narendra Modi can do this. Giving us back our own money. He knew about our hassles with the Rs 2,000. So he’s giving us 500s. Modi is cleaning up India. He is like Lord Hanuman who carried the mountain of herbs for Lakshman’s medical treatment…”

A middle-aged man interrupted her. “What utter nonsense and poppycock is this!” he screamed, jumping up and down as if his shirt had caught fire. “It’s because of the Congress we’re blessed with 500s. Rahulji stood in a queue in Delhi and spoke about our inconveniences with Rs 2,000 and demanded Rs 500s. Apparently, he hadn’t heard of the Rs 100s. And then Soniaji told Manmohanji to tell Parliament what a monumental disaster this is! Stop singing paeans to Narendra Modi.”

A bearded youth with gold-framed Ray Ban glasses that dropped to the tip of his nose coughed loudly to get attention. Having got it, he said:  “I studied at JNU which trains the best of the humanity in subjects ranging from ideological intimidation to currency economics. This demonetisation is a devious scam typical of the bourgeois, a cold-blooded fraud on the proletariat. It’s so incredibly stupid that China is laughing at India. And releasing 500s at this juncture further aggravates the situation. Don’t ask me how. Study at JNU or watch NDTV. What Marx once said about currency shook the world …”

“Shake the tomb of Marx and yourself,” shouted a girl with a saffron dupatta.

Even as she was screaming at the JNU scholar, a second crowd gathered to watch the first crowd. They just stood staring, utterly uninterested in finding out what it was all about. Then a third crowd formed to gawk at the second one. Then a fourth one… It was only later that the second and the subsequent crowds found what the whole pooja was about.

Then there was a mad rush for the ATM. Four people died in the stampede. Channabaasappa was one of them.

The author wrote a weekly satire column called True Lies in The Times of India from 1996 to 2001. He tweets at @sprasadindia

First Published On : Nov 25, 2016 15:17 IST

Demonetisation to eradicate black money, to benefit all: Govt tells Supreme Court

New Delhi: The Modi government on Thursday asserted in the Supreme Court that the “bold move” of demonetisation would eradicate black money and slush funds operating since Independence which cast a “parallel economy” hitting the poor and the middle class.

The Centre, which filed an affidavit on demonetisation, said the decision on which a total secrecy was maintained, would now help in proper implementation of the ambitious ‘Jan Dhan Yojana’ under which around 22 crore bank accounts for poor people have been opened as reports of unscrupulous elements using these accounts to convert their black money into white surfaced.

Prime Minister Narendra Modi and Finance Minister Arun Jaitley during a Rajya Sabha proceeding on Thursday. PTI

Prime Minister Narendra Modi and Finance Minister Arun Jaitley during a Rajya Sabha proceeding on Thursday. PTI

Further, demonetisation is seen as a check on the real estate sector where prices get pushed up artificially, reducing the availability of affordable housing for the poor and the middle class.

Elaborating on several measures including the “thrust” given for increasing digital payments in the economy through credit and debit cards, internet banking, mobile apps and e-wallets, the Centre said their use has seen a jump of nearly 300 percent in the last 10 days.

In its affidavit, the Centre also gave reasons for maintaining secrecy about the move which was announced by Prime Minister Narendra Modi just after 8pm on 8 November and came into force from the midnight.

“The gigantic dimensions and possibilities of compromising on secrecy were taken into consideration. If elaborate prior arrangement for distribution of new currency notes were made prior to the announcement of the scheme, the very objective of the scheme would have been defeated.

Further, the scheme impacts several sectors in the short-term but promises large benefits in the economy in the medium-term,” the affidavit said.

The affidavit, filed a day before a crucial hearing, contended that “no serious attempt at this scale has been attempted in the past” and in the “two attempts made in 1946 and 1978, the scale of operation was not as expansive due to the sheer size of the cash component in the economy”.

Justifying the decision to do away with Rs 1,000 and Rs 500 notes which constituted 80 to 85 percent of the cash flow, the affidavit, settled by Attorney General Mukul Rohatgi, said, “The withdrawal of existing high denomination banknotes will curb funding of terrorists with the proceeds of FICN (fake Indian currency notes) and use of existing FICN network for subversive activities.”

“It will eliminate black money which casts long shadow of the parallel economy on our real economy. The poor and middle class, who are worst sufferers due to black money, will be benefited. It will reduce tax avoidance and bring more transactions into the formal economy,” it said.

“Information has been received that there is sudden spurt in the quantum of deposit in several Jan Dhan accounts. There are also reports of unscrupulous elements using Jan Dhan accounts of poor and innocent persons to convert their black money into white.

“Such spurt in deposits will be looked into closely. Jan Dhan account holders are requested not to allow their accounts to be misused by anyone,” it said.

Claiming that removal of high denomination currency notes of Rs 1,000 and Rs 500 would lead to decline in real estate prices making affordable housing available to all, the affidavit said, “At present, there is excessive use of cash in real estate sector due to large cash transactions in areas
such as purchase of land and housing property. The real estate prices get pushed up artificially.

“This reduces the availability of affordable housing for the poor and middle class. Greater over-the-board transaction will lead to a decline in real estate prices making affordable housing available to all.”

The government said all necessary steps are being taken to reach every nook and corner of the country with new currency notes of Rs 2,000 and Rs 500 and accordingly ATMs are being recalibrated and emphasis was laid on printing more number of new legal tenders of greater value.

The Modi dispensation said the decision on demonetisation was in line with successive actions it has taken since coming to power in May 2014 after which an SIT was formed to go into the black money issue.

“The decision was taken keeping in view the need for continuous pressure for the eradication of black money, in line with successive action being taken since the last two years, starting with formation of SIT in June 2014, provisions for declaration of undisclosed foreign income in June 2015, the approval of the measures to incentivise digital payments and move towards a less cash economy in February 2016 and the introduction of the income declaration scheme in July 2016,” the affidavit said.

While seeking dismissal of the petitions challenging the 8 November notification on demonetisation, it said the scheme was in coherence with the legal provisions and such actions
can only be interfered by the courts if they are shown to be “arbitrary”, “unreasonable” and “illegal”.

Further, the demonetisation action fall in the realm of fiscal/economic policy and it is well-settled that there is a limited scope of judicial review over such actions, it said.

Elaborating the steps taken for better convenience of the public, the government said it was closely monitoring the implementation of the decision and to avoid inconvenience to the public, old high-denomination banknotes will continue to be accepted in carrying out emergent and urgent transactions.

It said old currency notes would be allowed for making payments in government hospitals and pharmacies in government hospitals, at railway ticketing counters, purchase at consumer cooperative stores and milk booths operated under authorisation of the central and state governments.

It would also be used for purchase of petrol, diesel and gas at stations operated by PSUs, for making payments to all toll plaza in the states and national highways, for payment on purchases of LPG gas cylinders, entry tickets for monuments maintained by the ASI, payments towards court fees and also for making payments towards utility charges including water and electricity.

First Published On : Nov 24, 2016 21:37 IST

Demonetisation day 15: Three-year-old dies in queue; driver flees with Rs 1.37 crore cash

In Parliament on Thursday, former prime minister Manmohan Singh said that the demonetisation move by the government has caused the common man and small businesses much hardship, dubbing its implementation as ‘monumental’ mismanagement. The former prime minister further said that what has been done can weaken and erode people’s confidence in the currency and banking system.

The news updates on the 15th day since the demonetisation of higher denomination notes, show how the people involved might cause hardships, as compared to the scheme itself.

Three-year-old death

A three-year-old girl allegedly died wile her labourer father waited in a queue to withdraw money from a bank in Uttar Pradesh, for her treatment, according to a Hindustan Times report.

Dharmendra was standing in line at the Allahabad UP Grameen Bank in Tindwari in Banda to get money to treat his three-year-old daughter, Ankita’s high fever. He got her to the bank with him on Monday and wanted Rs 2,500 from his account, and had even filled the form. Though, people let him go ahead in the queue, he alleged that the bank manager refused to give him cash. And by the time he stepped out of the bank his daughter passed. Some angry villagers blocked the Banda-Fatehpur road, demanding action against the manager but it was lifted when police promised to take action.

Nine-year old’s death

An unwell nine-year-old died, before his father could rush him into the nearest medical facility in Mansar on Thursday, according to a report by The Indian Express. Mohammad Haroon, the father, said he had to walk for 30 kilometres through hills and forests in from Doonga village, in Jammu and Kashmir, because he did not have any currency notes to pay for travel. He possesed Rs 29,000 in scrapped notes but could not get it exchanged in two Jammu and Kashmir Bank branches. However the managers of both branches have said that he should have approached them and conveyed the urgency of the situation.

Samba district magistrate Sheetal Nanda has sought a report over the incident, however she feels that Haroon’s bank visits have not led to the child’s death.

Representational image. PTI

Representational image. PTI

Driver flees with Rs 1.37 crore cash

Giving a slip to the security guard and two bank employees, a contract driver of a logistics firm fled with Rs 1.37 crore in cash in a van from a busy road in the city centre on Wednesday in Bengaluru, according to an IANS report.

The incident occurred between 2-3 pm when the accused Domnic, 45, drove away with the cash and vanished after the two employees went inside Bank of India’s KG Road branch, while the guard got down from the vehicle to attend nature’s call, Deputy Commissioner of Police MN Anucheth. The cash in the form of Rs 2,000 new notes and Rs 100 notes were part of the amount the logistics firm (Logi-Cash) collected from two other banks in the city earlier in the day.

Rs 60 lakh found in RKM

Two unclaimed bags with Rs 60 lakh in demonetised Rs 500 and Rs 1000 currencies were recovered from Laitumkhrah premises of Ramkrishna Mission in the Shillong, near the temple, and handed over to the Income tax officials, police said on Wednesday.

Allegedly the bags were actually found on 12 November but the RKM officials at Laitumkhrah took time to report since they had waited for a nod from their headquarters in Kolkata. Since the RKM cannot accept donations from anonymous donors and that they had to put the same in the book of accounts, the matter was reported to the police days after. The identity of the person who kept the huge cash at the premises also remained untraced since the organisation installs CCTVs only during pujas.

Pig in the row

A piglet queued up in front of an ATM in Hyderabad, says a report by The Times of India.

‘Bunty’, the white piglet who plays a lead role in the upcoming Telegu film Adhugo, was in the arms of the film director Ravi Babu who had stopped to withdraw some money. Allegedly, Bunty felt uncomfortable in the car, and the director decided to bring him out for some air. His assistant director clicked the picture that is now going viral.

With inputs from agencies

First Published On : Nov 24, 2016 14:33 IST

Demonetisation: SBI bulk deposit rate cut needn’t worry you; it has some good news too

State Bank of India (SBI), the country’s largest lender by assets, has cut interest rates on its different maturity bulk term deposit rates by an unusual 1.29 percent to 1.9 percent on Wednesday evening. But, this rate cut on deposits shouldn’t worry the common retail customer.

Bulk deposits are typically deposits above Rs1 crore and, primarily, companies or high net worth individuals make such deposits. They stand to lose on their returns.

ReutersReuters

Reuters

But, the broader signal for the retail borrower is positive since the trend on deposit rates shows lending rates too have to come down soon. SBI had cut its retail deposit rates too recently, albeit in smaller quantum, by 0.15 percent in select maturities. These deposit rate cuts will work in favor of the borrower when the bank revises its marginal cost of funds based lending rate (MCLR) soon.

Since MCLR is linked to deposit rates, once cost of deposits goes down for the bank, cost of advances too has to come down. Hence, the good news for the common man in the SBI deposit rate cut spree is that, his loan rates are set to fall. Now why did SBI go for massive cut in deposit rates?

The answer is obvious from the kind of deposit inflow it has seen post the demonetization announcement by Prime Minister, Narendra Modi on 8 November. SBI alone has seen an additional deposit inflow of Rs one lakh crore between November 10 and November 22 in current and savings accounts. Bulk of this is in savings accounts.

Remember this figure is net of withdrawals, which means the bank is now flush with deposits whereas the options to deploy this fund in loans is limited on account of poor demand from individuals and corporates on account of slow growth in economy. Hence, the bank would want to disincentivise further deposit inflow by making it less attractive.

The deposit bonanza is not specific to SBI alone. The banking industry, as a whole, has seen heavy mobilisation of deposits post the demonetisation announcement. To put it in numbers, the banking industry received Rs 5,44,571 crore in deposits (this includes deposits made through old currency notes) until 18 November, going by the Reserve Bank of India (RBI) data. This includes deposits of Rs 5,11,565 crore and exchanged currency notes of Rs 33,006 crore. Thus, other banks too have started slashing their deposit rates, with ICICI Bank and HDFC Bank already cutting deposit rates by up to 0.25 percent. They lenders too may cut their lending rates eventually.

But savers to take hit

But, this would also mean that retail savers will take a hit, while the rate benefit for the borrower may not be huge. For instance, SBI is now offering a rate of 6.90 percent on term deposit of 1 year to 455 days compared with 7.05 percent earlier. The rate of return is increasingly becoming unattractive compared with other savings schemes.

The Kisan Vikas Patra is giving a return of 7.7 percent for a 2-year deposit. Senior citizens deposit scheme will now fetch 8.5 percent. There is a likely shift to other savings schemes from bank deposits. That’s because bank deposits will become ever more unattractive for the common man and may prompt some to move to other fixed income schemes that yield higher, such as mutual funds.

Seen against this, the benefit on account of likely small lending rate cuts may not be significant too. SBI and other banks might announce a quarter percentage point or less reduction in its loan rates once the MCLR is revised that will lower the EMI burden for the common borrower by a few hundred rupees.

Directionally, interest rates in the economy are set to come down now with the inflation cooling down and economic activities are yet to show any significant pick-up, as shown by the industrial production numbers and core sector data. This will put more pressure on Reserve Bank of India (RBI) governor Urjit Patel to lower central bank’s key rates even further to support the economy. The short point here is that demonetisation brings some good news borrowers and bad news for savers.

First Published On : Nov 24, 2016 08:19 IST

Demonetisation: Mamata Banerjee backed by JD(U), SP, NCP, AAP in protest at Jantar Mantar

New Delhi: In a show of strength, Bengal Chief Minister Mamata Banerjee, backed by JD(U), SP, NCP and AAP, on Wednesday held a demonstration against demonetisation in New Delhi and ramped up attack on Prime Minister Narendra Modi, alleging the country was not safe in his hands.

Representational image. PTI

Representational image. PTI

Addressing the gathering at Jantar Mantar, Banerjee alleged that abolition of high-value currency notes had heaped pain on people and snatched away democratic rights of almost every section of the society including farmers, youth, women, labourers and traders, besides halting the country’s economic growth.

Accusing the BJP-led dispensation of “looting” the common man, she wondered why those having Swiss bank accounts were “not touched at all”, and warned that people will teach a “good lesson” to the ruling party in the upcoming assembly polls for implementing a “black law”.

“I can challenge that no one will vote for BJP. If I were you (PM), I would have apologised to the public. Why you are so egoistic? You have branded everyone in the country a black marketeer and have yourself turned into a saint ,” Banerjee said.

In his address, JD(U) leader Sharad Yadav questioned the legality of the demonetisation exercise and challenged the Prime Minister to explain to the Parliament how the decision will benefit the country.

“Under which law have you enforced this measure? You are stopping a person from withdrawing his hard-earned money which is his fundamental right. Demonetisation has destroyed the business of small traders. Come to Parliament and explain the logic as to how it will curb black money,” Yadav said.

The presence of Yadav at the protest assumes significance as his party had supported demonetisation.

The street protest was also addressed by SP’s Dharmendra Yadav, AAP’s Raghav Chadha and NCP’s Majid Memon.

The Bengal Chief Minister also lashed out at a group of people who were shouting pro-Modi slogans, alleging that they were sent to disrupt her public meeting and wondered what the police and administration were doing.

Referring to Tuesday’s bypoll results, the TMC chief said BJP’s victory margins have come down significantly in Madhya Pradesh and that Modi has left the country in the lurch (Modiji ne desh ka barah baja diya).”

Banerjee said she will continue her fight till woes of the people are not addressed, adding she will also support a country-wide protest called by the Opposition parties on 28 November against demonetisation.

Last week, Banerjee had addressed a rally against demonetisation along with Delhi Chief Minister Arvind Kejriwal.

First Published On : Nov 23, 2016 17:02 IST

Demonetisation: Delhi HC to hear plea against ‘unconstitutional’ currency ban

New Delhi: Delhi High Court on Monday agreed to hear a plea against demonetisation, saying once the currency was invalidated then how could the government direct certain public utilities including hospitals and petrol pumps to accept old notes.

A bench of Justices BD Ahmed and Jayant Nath are listed for hearing the plea on Tuesday, which also sought discontinuation of the new Rs 2,000 currency note, terming the move as “unconstitutional and bad in law”.

Petitioner Pooja Mahajan, running a designer showroom, mentioned the matter pleading urgency on the ground that she is being deprived of earning her livelihood and her fundamental rights are being infringed.

She also blamed the government for taking a dual stand saying on one hand it was encouraging people to deposit old notes in bank accounts and on the other hand threatening them of prosecution for depositing over Rs 2.50 lakh.

Advocates, A Maitri and Radhika Chandrashekhar, counsel for the petitioner, urged the court to quash various notifications with regard to demonetisation issued on and after 8 November, saying they are in contravention of the Constitution of India and Reserve Bank of India (RBI) Act.

Representational image. PTI

Representational image. PTI

Section 24 of RBI Act deals with denomination of notes which empowers the RBI and Centre to issue bank notes for various denominations as mentioned in section 24 (1) and (2) of the Act, the plea said.

“Till date, government has not issued any notification under section 24 (2) of the RBI Act for discontinuing currency notes of Rs 500 and Rs 1,000.

It further said that Rs 2,000 notes are being circulated by the government against mandate of section 24(1) of the Act.

Seeking direction to Ministry of Finance, the petitioner said the government’s decision is “arbitrary and unconstitutional” as on one hand it has cancelled the currency notes of Rs 500 and Rs 1,000 but simultaneously circulated high denomination notes of Rs 2,000 without the mandate of RBI Act.

The petitioner also alleged that “on the pretext of exchange of notes, government cannot prosecute and misuse the provisions of Income Tax Act by treating the cash deposit for exchange as unaccounted money”.

As per Section 24 (1) of the RBI Act, bank notes shall be of denominational value to Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 or of such other denominational values, not exceeding Rs 10,000 as the Central Government may, on the recommendation of the Central Board, specify in this behalf.

Section 24 (2) of the Act says the Centre may, on the recommendation of the Central Board, direct the non-issue or the discontinuance of issue of bank notes of such denominational values as it may specify in this behalf.

Prime Minister Narendra Modi had on 8 November announced the demonetisation of Rs 1,000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.

First Published On : Nov 21, 2016 15:50 IST

Demonetisation: Bank officers union calls for Urjit Patel’s resignation; focus shifts to RBI

The All India Bank Officers Confederation has called for the resignation of Reserve Bank of India governor Urjit Patel, taking the moral responsibility for the current crisis in the country and the deaths of more than 50 people, including 11 bank officials, according to a report in The Indian Express.

“The present governor has utterly failed in his role by taking a crucial economic decision without planning, which has brought havoc to the nation’s economy and lives of the majority,” D Thomas Franco, senior vice-president of the confederation, has been quoted as saying in the report.

Urjit Patel. ReutersUrjit Patel. Reuters

Urjit Patel. Reuters

According to him, as neither prime minister Narnendra Modi nor finance minister Arun Jaitley is an economist, the RBI has economists who are capable of taking the right decisions on “matters relating to economy and people’s lives”.

In 1978, when the Janata government decided to demonetise, then RBI governor IG Patel had advised against it, he has pointed out.

With the confederation raising calling for the resignation of the RBI governor, the focus now seems to be shifting to the RBI’s role in the development.

An article in Scroll today has pointed out that the RBI’s silence over the last 13 days, when the common people went through serious hardships and the economic activities in both rural and urban areas almost ground to a halt, raises questions about on its independence.

“Urjit Patel, who took over from Raghuram Rajan as the Reserve Bank of India governor in August, has not found it necessary to make a single statement about the chaos that demonetisation has unleashed,” the article says.

Firstpost columnist Yatish Rajawat has also raised the issue in an article today. “The shoddiness with which demonetisation has been executed should have been the responsibility of the RBI governor,” he has said.

The article further argues that the developments over the last two weeks have shown that Patel is “grossly under-prepared for any task that requires quick decision-making”.

Franco too is making this point when he says that the shoddy way in which the entire scheme has been executed shows that the central bank did not have a roadmap at all.

“It was very, very poor planning on the part of RBI that has led to this crisis,” Franco has been quoted as saying in the reported.

First Published On : Nov 21, 2016 11:43 IST

Demonetisation: Vegetable vendors, farmers affected as trade slowdown cripples them

It is a market that at the best of days sees flurry of business activity with no time for even a small talk with anyone. Now that rush has slowed down considerably. The vegetable market in Vashi (formerly the APMC market) is slowly picking up though losses have mounted due to demonetisation of Rs 500 and Rs 1,000 notes and traders left with no small notes to give in place of the annulled notes.

Representational imageRepresentational image

Representational image

Riaz Mohammad Hussain, who has been an onion and potato wholesaler and running his family business for around 50 years, is hoping that the market turns around the corner soon and the hustle and bustle returns. “We have given credit to people but mostly the buyers are giving us old notes. We don’t take any of these annulled notes,” he says.

To get a clear picture of the business, consider this: Hussain normally sells 500 bags of potatoes and onion daily which has now come down to just 50 bags daily due to the unavailability of new currency notes from banks. Onions are being sold at Rs 8 a kg in the wholesale market and are not finding buyers at the price due to lack of currency denominations that will be accepted by the dealers.

The Modi government’s decision, announced on 8 November, to replace Rs 500 and Rs 1,000 denomination currency with new ones post midnight took people by surprise. The government has said the move is aimed at tackling black money, fake currencies and corruption. In his address on television, the PM said the notes of Rs 500 and Rs 1,000 “will not be legal tender from midnight tonight” and these will be “just worthless piece of paper.” The Rs 500 and Rs 1,000 notes constituted 86 percent of the value of the total currency in circulation.

Though everyone welcomed the move, the subsequent cash drought in ATMs and bank branches, has caused panic among the public at large.

Shortage of new currency notes
From a daily run of 1500 trucks carrying fruits and vegetable, the number has come down to 1000 at the Vashi market. There are around 4000 traders – license holders and unlicensed – at Vashi. Each trader would need at least 1 truck-load of either fruits or vegetables. Each truck carries around 10 tons of fruits or vegetables at an estimated price of Rs 2 lakhs.

“The traders don’t have new currency notes to give the farmers in exchange for goods. We cannot sell the produce to dealers on the annulled notes as that would mean a huge problem for us,” says Ashok Hande, chairman, fruits and traders association, Vashi.
Some fruits like apples can be stored for some days but the issue is now the store rooms in the market are full. “We have told farmers not to send their produce to the market anymore. Of the 1000 trucks that come daily, 100 trucks with produce goes waste – either the fruits and vegetables rot because there are no takers on account of the cash crisis due to demonetisation,” he says.

Hande estimates that each vegetable and fruit market in the city would be suffering around Rs 8-10 crore loss daily. “This would go up to Rs 3-4 crore in Pune and around Rs 5-7 core in Nagpur and much higher at around Rs 20 crore in Delhi. This is a national waste,” he says.

The traders say that the restricted money available from the banks are not helping them either. PM Modi had said people holding notes of Rs 500 and Rs 1,000 can deposit the same in their bank and in post office accounts from 10 November until 30 December. The government had initially said customers can exchange up to Rs 4,000 of their old currency notes at the banks. This later increased to Rs 4,500 only to be cut to Rs 2,000 on Thursday. Similarly, ATM withdrawal limit was first set at Rs 2,000, which was later increased to Rs 2,500.

Even after 10 days post-demonetisation, the ATMs and bank branches are struggling to meet the panic-driven cash demand from regular customers. Part of the reason for the cash drought is that people are hoarding money anticipating difficult days ahead. To understand the picture, one needs to look at only State Bank of India alone, the country’s largest lender by assets, which saw withdrawals to the tune of Rs 18,665 crore, Rs 5,776 crore in exchange of old currency notes and deposits of Rs 1.14 lakh crore up to 16 November.

The farmers who send their produce through middle men to the Vashi market have been most hit, says Ashok Walunj, a trader of onions and potatoes and former director, APMC. “The dealers have the annulled notes which we cannot accept and hence the produce that is now coming to the market is in far lesser quantities,” he said, adding that even if a trader wants to change Rs 2,000 denomination notes, there are no takers. “No one has the time or space to run around looking for change,” he says exasperation seeping through his voice.

Lack of planning
The government’s move to flush out black money is ambitious, the traders said. Their complaints against the government is like the rest of India that points to ‘lack of planning’ on the part of the government. “India is not Canada or the US where online transactions are a way of life,” said Tajli, a wholesale vegetable vendor. “People here will use the latest Android phone but be wary of using the computer,” he said.

Balkrishna Shinde, fruit trader at Vashi would have a daily turnover of Rs 8-10 lakhs before the demonetisation was announced. Now, he says, he is struggling to make Rs 1,000 daily. “No one has the new currency notes to trade in for goods and the old notes cannot be accepted either,” he says.

Businesses trade in lakhs at the market and the Modi government issuing restricted amount of Rs 2000 notes and Rs 100 notes in short supply has hit them hard. Business in the market has gone down to 30-40 percent on a conservative estimate but traders are furious at the lack of business only because of the lack of currency notes in the denominations that can be used as legal tender. “When the government can have an entire machinery in place for voting – schools, municipal schools, etc – to conduct elections or make Adhaar cards, could they not have done the same by deploying bank managers and staff to dispense the money that is rightfully theirs?” asks Hussain. It is not the traders at APMC or the dealers who are suffering but the farmers whose produce is not being sold and are rotting due to lack of buyers because of lack of legal tender, he pointed out.

Tajli points out that the traders have to pay interest to the banks. “We still have to pay it. But there are no mathadi workers to be found here to load and unload the sacks of vegetables from trucks. No one has new currency to pay daily wages. He says that the situation is slowly limping back to normalcy with new currency notes. “However it will be at least six months before the business can go back to the pre-monetisation phase,” he said.

While hoping that the government may step up efforts to bring in normalcy on the currency front in the coming days, other trader community at APMC are keeping their fingers crossed, although deep inside they know it will take at least four to six months before business gets back to normalcy.

Data support from Kishor Kadam

First Published On : Nov 19, 2016 12:11 IST

Demonetisation: ATMs of Mumbai cooperative banks shut due to scanty supply of notes

Mumbai is no different from other towns and cities in India when it comes to facing a severe cash crunch, with most of the banks struggling to meet people’s requirement of notes. This is even as a significant number of ATMs have remained in operation since PM Narendra Modi announced the demonetisation exercise on 8 November.

All ATMs of cooperative banks, including the multi-state ones have not been functioning for the last 10 days. Of the remaining ATMs run by private and government banks, only half are working, according to a senior official from the finance department.

In the last 10 days, people have been spotted in long queues in front of banks from two to six hours a day.

Queue outside a SBI branch on Wednesday. PTIQueue outside a SBI branch on Wednesday. PTI

Queue outside a SBI branch on Wednesday. PTI

According to an Additional Chief Secretary of the Mantralaya, there are 3,900 ATMs and 2,100 of banks, including cooperative, government, private and foreign banks in Mumbai, of which 40 percent of the banks belong to multi-state cooperative scheduled banks and District Central Cooperative (DCC) banks. All scheduled bank and DCC bank ATMs have been forced to close since 8 November’s demonetisation move. The remaining 60 percent of ATMs belong to private, national and foreign banks, he added, on the condition of anonymity.

Firstpost has checked ATMs in Mumbai and found that those belonging to multi-state scheduled banks, including The Saraswat Co-operative Bank Ltd, Abhyudaya Co-operative Bank Ltd , TJSB Sahakari Bank Ltd, Janta Sahkari Bank Ltd, Cosmos Bank, Apna Sahkari Bank, Shamrao Vithal Cooperative Scheduled Bank, Punjab & Maharashtra Co-operative Bank, Janakalyan Sahakari Bank Ltd, Mumbai District Central Co-operative Bank Ltd, Jaoli Sahakari Bank Ltd, The Greater Bombay Co-operative Bank Ltd and many others have been closed.

Talking to Firstpost, Punjab & Maharashtra Co-operative Bank’s (PMC) Manager Madhavi Gholkar confirmed that all the ATMs across Mumbai have been closed due to the inadequate supply of currency notes. “We have 122 branches in Maharashtra. Andheri is old branch of PMC and more than 50,000 customers are with us. But till yesterday, hardly 20 percent of customers withdrew money as per RBI guidelines,” she said.

Saraswat Bank has also been sending text messages to customers saying, “There is an inadequate supply of currency notes. Hence we may not be able to allow withdrawals in part or full, depending on the availability of cash at a particular branch. The situation is likely to improve soon. We request your kind co-operation.”

The chairman of the Mumbai District Central Co-operative Bank Pravin Darekar told Firstpost that they have more than 20 ATMs in the city but in the last 10 days all hold insufficient amounts of money. “So we closed them to avoid facing customers’ anger.” Darekar also mentioned that they will file a PIL against the ban that DCC banks cannot accept old currency notes.

“The DCC Banks in Maharashtra are in a bad situation when RBI decided not to accept Rs 500 and 1,000 notes after demonetisation. There are 31 districts banks with 4,500 branches all over the state. Rs 65,000 crore money was deposited and Rs 45,000 crore worth of loan money given to customers,” added Darekar. “In the first three days, DCC banks received Rs 3,000 crore worth old currency notes in denominations of 500 and 1,000. So we have serious questions about this amount,” he said.

Mumbai Congress President Sanjay Nirupam said that they require 2300 crore worth of currency notes to fulfill the country’s demand. But right now only Indian government mint can only produce 300 crore pieces of currency notes a month. This means the serious crunch of currency notes in the country will take next seven months minimum, Nirupam said. “From Sunday onwards, we will tell people that demonetisation is fraud and implemented without preparation,” he claimed.

First Published On : Nov 19, 2016 11:21 IST

Demonetisation: Nearly 10 days in, the pain has yet to ease for the common man

On the evening of 8 November, when Prime Minister Narendra Modi in his address to the nation, announced the demonetisation of Rs 500, and Rs 1,000 notes, it gave a sense of hope that we finally have a government which was taking decisive action against black money and corruption. A slew of steps were announced as well to ease the transition.

The prime minister presented a passionate case:

“To break the grip of corruption and black money, we have decided that the five hundred rupee and thousand rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016…This step will strengthen the hands of the common man in the fight against corruption, black money and fake currency.” 

Within minutes, the Modi government’s sudden but big move was extolled, debated, dissected and analysed, however, the good feeling soon ebbed away leading to panic and anxiety: How to get rid of the old defunct Rs 500 and Rs 1,000 notes?

Since 8 November, the lines in front of banks and ATMs have only grown and so has the frustration and helplessness of citizens. While representatives of the government have repeatedly assured that the situation will normalise soon, people are not buying it anymore. Despite the prime minister various members of his Cabinet appealing to the country to focus on the big picture, life for the majority of Indians has been reduced to an endless queue.

People stand in long queues outside a bank. PTI

People stand in long queues outside a bank. PTI

Gauging the mood of the nation, Modi made an emotional appeal in Goa: “Dear countrymen, please give me these 50 days. I am not demanding anything else. If you face any difficulty after that, if you find me dishonest in my efforts, you can punish me in whatever way you would wish to at any crossroad of the country.”

Finance Minister Arun Jaitley on Tuesday said that move to demonetise the high-value notes was “very well-planned”, and added that the rush in bank branches is “significantly” coming down and 22,000 ATMs are getting recalibrated daily in order to dispense Rs 100, and new Rs 500 and 2,000 notes.

But the ground reality is completely different. People are camping overnight outside ATMs and banks. The urban salaried class of India might have moved to a cashless way of life. Thanks to the cab aggregators, payment gateways and mobile apps, surviving without hard cash may not seem to be so daunting. With the persisting cash crunch, it is the good old jugaad that has come to the rescue of many Indians. Mobile recharges in exchange of vegetables, online transfers instead of cash payments are the new norm. But what about thousands others who have never heard of payment gateways and net banking? India is far away from being a cashless society, forget online banking, there are many who don’t have debit cards or even banks accounts. There are senior citizens, who prefer to keep emergency funds at home, instead of making multiple trips to the ATM. Did the government take the plight of these people into account before plunging into this scheme?

Representational image. PTI

Representational image. PTI

You will only have to stand in a queue outside an ATM to realise the extent of Indian resilience, or may be it is desperation. People come stocked with food and juice as if its a prized picnic spot, there is free exchange of information, friends and family drop by or take turns to stand in queue, flared tempers turn into friendly banter — the Indian masses’ stoic acceptance of their lot is worth admiring. But it is not happy tales everywhere. There are reports of people collapsing while standing in queues, some have resulted in deaths. Office-goers have been forced to skip work to get hold of their hard-earned cash.

The situation in small towns and villages is worse.

TS Sudhir writes for Firstpost: Srinivas, a farmer in Siddipet town of Telangana, says “This is Rs 10,000, all in denominations of 2,000. This is of no use. I can neither buy a cup of tea for myself or a meal for Rs 5 nor buy a bus ticket.” While Aijaz Nazir interviewed Ghulam Ali from Anantnag in Kashmir, who said, “I need money to book a ticket for my daughter who studies outside Kashmir. Her exams are approaching and I am worried whether she will be able to attend those.” Ali used to book her tickets from home when internet services were functional in the Kashmir Valley.

Adding to the cash crisis, are the constant change in policies that many are finding difficult to track. Economic Affairs Secretary Shaktikanta Das’ Thursday’s announcement that families that have an upcoming wedding, one member of the household can withdraw up to Rs 2,50,000 at one time came as good news, lowering the maximum sum that could be exchanged from Rs 4,500 to Rs 2,000 drew a lot of criticism.

Harry Stevens and Suchetana Ray wrote in the Hindustan Times, that to print new Rs 500 and Rs 2,000 notes and replace the Rs 14 trillion taken out of circulation, will take around six months.  “Printing 17.5 billion notes at a rate of three billion notes per month will take almost six months,” says the report.  The problems don’t end there. The notes have to distributed across the country and the ATMs have to recaliberated.

It’s day nine of demonetisation. Parliament is in uproar over the issue, protests are breaking out, politicians are fighting it out to earn some brownie points, but the line outside ATMs and banks are not moving. The situation has not improved since day one. Banks are overburdened, ATMs are running dry, government is busy is facing Opposition onslaught, while the masses wait in queues to get what is rightfully theirs.

And things show little sign of improving.

(With inputs from agencies)

First Published On : Nov 18, 2016 17:10 IST

Demonetisation: Finance ministry debunks myths on new Rs 2,000 note bleeding colour

New Delhi: Scoffing at rumours, the Finance Ministry on Friday said there was no move to seal bank lockers nor was it true that the ink of the new Rs 2,000 notes has been bleeding in some cases.

Representational image. Reuters

Representational image. Reuters

“Myth: Next move is to seal bank lockers and confiscate gold, diamonds and jewellery. Reality: This is baseless. There is no proposal to seal bank lockers and confiscate the jewellery,” the ministry tweeted in its official Twitter account.

The ministry also said the Rs 2,000 notes have a safety feature, which is called “intaglio” (a design that is incised or engraved into a material).

“To identify a genuine note when you rub it against a cloth, a turbo-electric effect is generated and it is due to this that the note’s ink gets transferred on to the cloth,” the ministry said.

First Published On : Nov 18, 2016 14:08 IST

Demonetisation: Bombay HC says efforts to curb black money should be supported

Demonetisation: Bombay HC says efforts to curb black money should be supported

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Mumbai: Refusing to pass any order on a PIL regarding demonetisation, the Bombay High Court on Thursday said the Union government’s efforts to act against black money need to be supported.

Representational image. News18

Representational image. News18

A division bench headed by Chief Justice Manjula Chellur made the remarks while hearing a PIL filed by Akhil Chitre seeking directions to the Centre and the state government to ease the inconvenience caused to the common people following the demonetisation of the old Rs 500 and Rs 1,000 notes.

“The government’s intention to act against parallel economy in black money cannot be said to be mala fide. Though there are problems faced by the citizens, it should be supported,” Justice Chellur said.

Refusing to pass any direction, the bench said the Supreme Court was already hearing petitions pertaining to the issue and hence it would not be correct for the high court to interfere.

First Published On : Nov 18, 2016 10:12 IST

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Demonetisation: RBI assures of sufficient supply of notes, asks people not to hoard money

Mumbai: The Reserve Bank on Thursday asked people not to hoard currency as there is sufficient supply of notes, even as banks struggled to manage the rush of people thronging branches across the country to exchange the scrapped high denomination 1,000 and 500 rupee notes.

Representational image. Reuters

Representational image. Reuters

The government meanwhile eased restrictions on cash withdrawal by farmers and families in the middle of marriage and sowing season, and at the same time more than halved the limit for currency exchange to Rs 2,000.

“The Reserve Bank of India has once again clarified today that there is sufficient supply of notes consequent upon increased production which started nearly two months ago. Members of public are requested not to panic or hoard currency notes,” the central bank said in a statement.

Despite ATMs being calibrated to dispense Rs 500 notes, such vending machines are running out of cash because of huge pressure of withdrawal.

Queues at some branches in the metros cities were seen slightly shorter for exchange of old currencies as the process of putting indelible ink has started from Wednesday. As a result of this, those who have already exchanged old currency notes are unable to queue up again.

Prime Minister Narendra Modi had on 8 November surprised citizens by announcing demonetisation of 500 and 1000 rupee notes and since then a large number of seemingly unending queues before banks and post offices are seen as people throng to exchange the currency.

First Published On : Nov 17, 2016 15:56 IST

Demonetisation: Indelible ink to be applied on right hand to avoid confusion during by-polls

Puducherry: The district election authorities in Puducherry have asked the banks and post offices to ensure that they applied the indelible ink mark on the right hand index finger of those seeking to exchange the scrapped currency notes, to avoid any confusion during the by-poll to Nellithope assembly segment.

Representational image. PTI

Representational image. PTI

District Election Officer, Satyendra Singh Dursawat in a release on Thursday said, the banks and post offices in Puducherry have been asked to apply the indelible ink mark on the right hand index finger of their customers.

If the ink is applied on the left hand index finger of the customers, and when they turn up at the polling booths to cast their vote, it might be mistaken for the one applied already at the booths.

As a result, genuine voters would be deprived of their right to vote, he said.

The Election Commission has mandated that the voters of Nellithope constituency should get their left hand index finger marked with indelible ink while exercising their franchise on 19 November.

Hence, the voters should also make it clear to the bank staff that the ink mark should be applied on their right hand index finger as they were to vote in the by-election, he added.

First Published On : Nov 17, 2016 10:45 IST

Demonetisation: Allow people to use old notes till 30 December, says Tripura CM Manik Sarkar

Demonetisation: Allow people to use old notes till 30 December, says Tripura CM Manik Sarkar

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Agartala: Tripura Chief Minister Manik Sarkar has requested Prime Minister Narendra Modi to allow people use the old currency notes of Rs 500 and Rs 1,000 till 30 December to ease public inconveniences.

“People are facing enormous difficulties due to the severe cash crunch. The Centre and RBI too, perhaps, are realising the fact.

“Eyeing the issue, I would urge people should be allowed to use Rs 500 and Rs 1,000 notes till alternate arrangements are not put in place, i.e. by 30 December as the Centre has set the time limit,” Sarkar wrote to Modi on Tuesday.

He also requested the Prime Minister to supply adequate cash to rural banks, so that people in these areas can withdraw and deposit old notes without difficulties.

First Published On : Nov 16, 2016 13:47 IST

Demonetisation effect: Goa govt employees demand salary in cash

Panaji: Goa government employees have demanded that their salary for the current month be paid in cash rather than be deposited in bank accounts, considering the difficulties faced to withdraw money.

Goa Government Employees Association (GGEA), in a written communication to Chief Minister Laxmikant Parsekar, said, “to make the withdrawal of money hassle-free the salary of all the government employees should be paid in cash”.

Queue outside a SBI branch on Wednesday. PTI

Queue outside a SBI branch on Wednesday. PTI

However, GGEA president John Nazareth welcomed the Centre’s decision to demonetise Rs 500 and Rs 1,000 notes.

“Despite the problems faced by government employees, GGEA welcomes the move and wishes government success in the same, as we feel that the step taken is progressive and constructive
in improving the economy of the country in the longer run,” he said.

Nazareth said since Finance Minister Arun Jaitley has made it clear that it will take some time to streamline the situation, we request government to avoid the payment of salary through banks via ECS system and instead pay the salary in cash for the month of November or until the process of withdrawal of money through ATMs become hassle-free.

“The request is made for payment of salary in cash as many government employees have reported that they have to stand in queue in the banks to withdraw their salary in parts which ultimately amounts to spending the time they would use in their offices to serve the public,” he said.

“The non-presence of government employees to serve the people may result in public outcry and criticism,” GGEA added.

First Published On : Nov 16, 2016 13:18 IST

Demonetisation: In times of cash crunch, jugaad comes to the rescue

Srinivas, a farmer in Siddipet town of Telangana, fished out his wad of Rs 2,000 notes from his pocket. “This is Rs 10,000, all in denominations of 2,000,” he said. “This is of no use. I can neither buy a cup of tea for myself or a meal for Rs 5 nor buy a bus ticket. When I go back home, my wife also scolds me for keeping these notes which cannot be used.”

In neighbouring Medchal district, several women are standing in a long queue at a bank, armed with lunch boxes and water bottles. Hussaini Bi said she had left her children at home and come to the bank, knowing it will be a long haul for her to get money. Another woman has to withdraw money so that she can visit a doctor. Her worry is that the doctor would be gone from the clinic by the time she manages to withdraw cash.

But not everyone in non-metro India is so badly off. A well-known hospital in Adilabad district generates income of more than Rs 10 crore but files income tax returns of only around Rs 27 lakh. The cash at hand is regularly invested in real estate. When the prime minister announced on 8 November that currency notes of Rs 500 and Rs 1,000 will no longer be legal tender, the doctors running this hospital had Rs 2 crore plus in cash in hand.

Representational image. PTI

Representational image. PTI

The next morning, salaries of all employees for the next three months were paid in advance using the old currency. The hospital then ordered items and medical equipment it would need for the next one year. The cash was exhausted. No questions asked.

The positive fallout of the crisis sparked by demonetisation is that the management now vows to transact only in white.

The real estate sector has seen a slump and those sitting over vast tracts of land are an aggrieved lot. There are no ready buyers in the market and no one wants to invest in a huge chunk, fearing that Modi’s next strike will be on those who own land. And not every seller is willing to take old currency notes.

But it is not for nothing that India is called the land of jugaad. This person who owns land in Ranga Reddy district on the outskirts of Hyderabad came up with an idea. He wants to sell his land for Rs 6 crore and has already prepared backdated documents for the land sale. His plan is to take Rs 6 crore in old currency, deposit it in the bank, pay 30 percent tax on the land deal that he will claim happened before November 8. This would mean he will pay Rs 1.8 crore in tax. After three months, as an incentive to the buyer, he is also willing to give him some amount in new currency as a cashback. He is trying to convince potential buyers sitting on that kind of humongous cash to settle for this “win-win deal”.

Jewellery shops came under the scanner throughout the country after it was reported that most of them reported huge purchases immediately after the PM’s demonetisation announcement. Several jewellery stores were raided after that to get a handle on the kind of turnover generated using black money.

It now seems that many of these stores may have pushed their jewellery inventory underground and passed it on their friends, including several chartered accountants. The connection was made when some CAs offered to take old currency and give gold in return. Which means if you have Rs 1 crore of old currency, you can be offered Rs 60 lakh worth of jewellery. This cash would be shown against purchases made before 8 November, with some furious book building exercise at work.

In sharp contrast, Mohammed Jameel in Begumpet area of Hyderabad is a hassled man. His son is getting married on 16 November but instead of making arrangements, he is standing in queue to withdraw cash. “The ATM has no money. I requested the bank manager to allow me to withdraw more but he refused to let me take more than Rs 10,000. How do I manage for a wedding?” asks Jameel.

The refusal by bank officials perhaps is because they too are under the radar. Two Syndicate Bank employees in Saroornagar area of Hyderabad were booked over the weekend by the police for exchanging demonetised notes worth Rs 6 lakh, without the customer providing any ID proof.

In the last one week, India — in its big cities, small towns and villages — is in a state of flux. In the times of demonetisation, desh badal raha hai.

First Published On : Nov 16, 2016 12:36 IST

Demonetisation: Rumours of strike against currency ban baseless, says Shaktikanta Das

New Delhi: The Finance Ministry on Tuesday dismissed as baseless rumours that some institutions were planning a strike against demonetisation and said technology teams will be set up to hasten the pace of recalibrating ATMs.

Shaktikanta Das. File photo. PIB

Shaktikanta Das. File photo. PIB

“Don’t believe rumours spread on the social media about certain institutions going on strike,” Economic Affairs Secretary Shaktikanta Das told reporters.

“On zooming the (strike) picture on the social media, it was found to be from 2015,” he added.

Das was briefing the media on the second review meeting on demonetisation held by Prime Minister Narendra Modi with officials of the Finance Ministry and the Reserve Bank of India (RBI) on Monday night.

To ease liquidity crunch, Das said, it was decided to constitute ‘technology teams’ to hasten the pace of recalibrating the ATMs for the new high-denomination notes.

Finance Minister Arun Jaitley had said it will take 2-3 weeks to recalibrate the ATMs. All ATMs in India need to be calibrated afresh to disburse the newly-minted Rs 500 and Rs 2,000 notes as per their weight, dimensions, design and security features.

The technology teams have also been directed to popularise e-wallets among people, Das said.

Micro ATMs are also being deployed in banks across the country.

“Separate green channel is being created in banks across the country for micro ATMs,” he said.

Among other measures, a task force has been formed to monitor stocking and transfer of old notes in other places, the senior officer said.

Assuring the people of enough cash availability with banks and post offices, Das said there was no reason for panic.

First Published On : Nov 15, 2016 15:57 IST

Demonetisation: Move over bhakts and trolls, citizens want unprejudiced debate, reliable info

Pained by the insults that the friends and foes of Narendra Modi are heaping on each other over his move to flush out black money, I write two separate notes to them and beg for ceasefire.

First to the Prime Minister’s friends:

If tweets were bullets and Facebook posts were poison-tipped arrows, half of Indians would have been dead by now. Neither your group nor the one that is rubbishing Modi’s move to flush out black money is in a mood to call truce.

It has been 96 hours since this cyber space dishum dishum began, and the ache in my head refuses to go away. My head feels as if two people are tugging my hair in opposite directions.

But a particular tweet nearly got me on Sunday. Even as I was reading it, mulling over the wisdom of it, I fell off my chair, got up after several minutes, shouted for water, gulped it down like a thirsty desert vagabond, got up, pinched my cheek to confirm I was awake, read it again and began to type these letters with a shaking finger.

Here is that tweet:

Okay. To talk about the inconveniences caused by demonetisation, I must either be corrupt to the marrow of my bone or I must be moonlighting for a mafia establishment run on money as black as Singareni coal. To be honest, I am neither of that. Yet, I have been inconvenienced by the sudden scrapping of the Rs 1,000 and Rs 500 notes. The move was a bolt from the blue.

People queued outside an ATM. PTI

People queued outside an ATM. PTI

Let me tell you about my mother. On 4 November, four days before Modi announced the currency ban, I withdrew Rs 30,000 from her pension account and handed it to her in Visakhapatnam for her expenses. Then I travelled a thousand kilometres to make my living — to reiterate, not from a mafia.

On the night of 8 November, I remembered to my utter shock that Rs 28,500 of the money I gave my mother was in Rs 500s. You can imagine her inconvenience. And I am far away.

On 10 November, when ATMs — or at least some of them — were expected to open after a day of closure, I made a dash for eight of them close to where I lived. Six were shut like graves, with not a word of explanation as to why. Two had no money. I was inconvenienced. I went to banks, but the helpful souls at the counters threw up their empty hands before my turn came in the queues that spilled onto streets. I was inconvenienced.

I repeated this routine every day without result, till no three words of any alphabet created such mixed emotions of fear, hope and hate like A, T and M. Then finally on 13 November, I found an ATM with cash. I am lucky, and I feel sorry for those who aren’t.

Yet, I continue to be inconvenienced — mentally — by reports of small businessmen shutting shops for lack of customers, hospitals turning away patients who can pay only with scrapped notes and senior citizens collapsing like heaps of bones or even dying in cash queues.

In his 8 November speech, Modi led us to believe that the inconvenience would last no longer than 72 hours. But it still goes on. That leaves us with uncomfortable questions. Did the government underestimate the hassles that the move would cause the common man? Or did it overestimate its own efficiency? Why didn’t it deal with this changeover on a war-footing?

Reports suggest that cash is available but distributing it to banks and ATMs is causing logistical nightmare. So why didn’t the government get the NGOs, the police, the military and the paramilitary forces into the operation?

An important point of this letter is that there is a group of people which wholeheartedly backs the move to ferret out the black money but that, at the same time, gives expression to its inconveniences. Anecdotal evidence suggests that this group is even larger than the other two representing Modi’s friends and foes.

Telling me not to talk about my inconvenience is like kicking the meal plate away from me and then stuff a ball of gag into my mouth. That intensifies the inconvenience.

And that amounts to a bias on your part.

Give us a break.

Dispassionate citizens are looking for dependable information and unprejudiced debate.

———–

To the foes of Narendra Modi

You flummox me as much as the friends of Modi.

Like a railroad worm burrowing into an apple, a suspicion gnaws at my mind. It’s that you are using demonetisation to indulge in demonisation of the man who is behind it all. You had closed your warped and dwarfed minds to the whole idea and were tweeting venom on Modi even before he had finished his 8 November announcement. From the start, you have been mulishly refusing to offer him even a tiny bit of a benefit of doubt that any civilised soul would extend to his worst enemy who professes good intentions.

The currency changeover caused inconvenience. It really did, in a big way. But to conform to your prejudices, you dwell on nothing but that, sometimes blowing the common man’s hassles out of proportions and sometimes spreading falsehoods. You are refusing to even acknowledge the possibility that the whole thing might after all do some good which it might.

Prime Minister Narendra Modi. PTI

Prime Minister Narendra Modi. PTI

As you see it through your blinkered eyes, the sole purpose of demonetisation is to hassle honest citizens in the name of catching crooks. It’s as if, according to you, Modi were a suicidal maniac who has hit upon an idea to harass his own voters, daring them to vote for him in elections three years from now. And it’s as if Modi was Tughlaq who woke up one fine morning and decreed to his minions: “Change the currency!”

Fundamentally, you not only question the very utility of demonetisation but even attribute sinister motives to him, not by way of a healthy debate but by pouring scorn on the man who promises to fight corruption and begs for a chance to do it.

And you brim with questions, which include:

Do crooks always stack up black money in pillow covers and under the bed? Isn’t a good part of black money lying hidden in real estate, benami deals and gold? Are the troubles that people are being subjected to worth the effort? Can’t the crooks divide their black loot into small portions of less than Rs 2.5 lakh and distribute it to flunkeys and relatives to legalise it without penalty?

There are indeed reputed economists who believe that demonetisation is not an option to eradicate black money or corruption. And it’s indeed a mighty good thing to ask questions in a democracy.

But there is a problem. Scarcely hidden behind your questions is a pre-determined eagerness to knock the bottom out of Modi’s boat. And you then brand anyone not toeing your school of thought as a Modi bhakt. As a matter of fact, you yourselves, strike us as either the acolytes of the Nehru dynasty or bhakts of Karl Max who cannot have an opinion unless it runs contrary to that of Modi.

And that amounts to a bias on your part.

Give us a break.

Dispassionate citizens are looking for dependable information and unprejudiced debate.

(The author tweets @sprasadindia)

First Published On : Nov 15, 2016 08:24 IST

Rs 500, Rs 1,000 note ban: Majority ATMs remains shut as banks fail to live up to challenge

The sudden demonetisation move by the NDA government faced mixed reactions from the public on Friday as banks failed to open ATMs to dispense cash. People queued up in front of ATMs from early morning only to be told by the bank officials that the machines were not working.

Ramesh Kumar who came to the Noida Sector 50 branch of the ICICI bank said that he was sure that the ATMs will be opened by Friday morning as the Prime Minister had declared on Tuesday. But he only met with frustration. “I came to collect cash from the ATM at 7 in the morning. But at 9 am I was told that dispensing money from the ATM will not be possible today,” he said.

Many of the people who visited banks were surprised to see “out of order” bills outside ATM booths.

New Delhi: People queue up outside a bank to exchange their old Rs 1000 and 500 notes in New Delhi on Friday. PTI Photo by Vijay Verma (PTI11_11_2016_000203B)New Delhi: People queue up outside a bank to exchange their old Rs 1000 and 500 notes in New Delhi on Friday. PTI Photo by Vijay Verma (PTI11_11_2016_000203B)

People queue up outside a bank to exchange their old Rs 1,000 and 500 notes in New Delhi on Friday. PTI

“I thought that ATMs will be opened today (Friday). I do not have (any) money. I have to go to work. I do not know what to do,” said Sahil Hussain, a customer.

Though ATMs were not working, most of the banks dispensed cash from their counters. Long queues were seen throughout the day in front of banks with people trying to withdraw money from the counters.

Raju Singh a shopkeeper near a branch of ICICI bank said, “I opened my shop at 7.30 am and saw a long queue outside the bank. I do not know from when they were standing.”

Pramod Chauhan who was waiting to collect cash from the bank said, “The bank is allowing only five or six people in at a time to collect cash or exchange money. So, it is taking too much time for the queue to end.”

Chauhan added that the inability of banks to open ATMs only added to the problem. “If ATMs were open than the queues would not have been so long,” he said, adding that he had been in the queue for more than five hours.

However, some like Sanjay Srivastava, a sales executive have been trying to collect cash since Thursday but had no luck even on Friday. “Yesterday I went to a bank to collect cash. My token number was 71. But the bank ran out of cash before my number was called. Today I am here in an another bank,” he said.

There are also some banks which did not dispense money but only accepted deposits.

The problems faced by the common man has prompted mixed reaction over the demonetisation move by Prime Minister Narendra Modi. However, some like small trader Sanjay Agarwal expressed his gratitude to the prime minister for his measure to curb black money. “Whatever is done is done for our welfare. We need to bear it with the nation. For it will make our economy flourish,” he said.

But another small trader who did not wish to be named said that the demonetisation move is going to do no good to the health of the economy. “Black money cannot be curbed only by changing the currency. That we can see from the galloping gold prices,” he said.

He also added that the new currency note of Rs 2000 denomination will make black money hoarding easier. “It will bring in troubles for the common man due to the difficulties in exchanging it with notes of smaller denomination,” he said.

The trader also criticised the banking industry’s inability to deal with the change in the currency policy. “Some political leaders in the opposition are alleging that the country has faced an economic emergency like situation because of the new currency. We know that it is not true. But what we know is that our banking industry lacks the resilience needed to face one given its inability to operate the ATMs even after 48 hours,” he said.

First Published On : Nov 11, 2016 20:13 IST

Rs 500, Rs 1,000 ban: Golden temple refuses demonitised note donations

Rs 500, Rs 1,000 ban: Golden temple refuses demonitised note donations

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Amritsar: The authorities at the Golden Temple Amritsar announced on Thursday that they would not accept demonetised currency notes from devotees.

Over 100,000 devotees visit the Golden Temple every day and the cash offerings run into lakhs of rupees.

“We have instructed our employees not to accept demonetised currency notes at the ‘prasad’ and offering counters,” a Shiromani Gurdwara Parbandhak Committee (SGPC) official told IANS.

He said they cannot stop the devotees of offering the banned currency notes of Rs 500 and Rs 1,000 at the ‘golak’ or chest.

He said all SGPC-run institutes in Punjab, Haryana and Himachal have been instructed to deposit old Rs 500 and Rs 1,000 notes on priority with the respective banks.

Rs 500, Rs 1,000 note ban: Andhra CM questions the need to introduce Rs 2,000 notes

Vijayawada: The proposed introduction of Rs 2,000 currency notes would be like falling from the frying pan into the fire, Andhra Pradesh Chief Minister N Chandrababu Naidu said on Wednesday and called for a debate on the move.

Chandrababu Naidu. CNN-News 18

N Chandrababu Naidu. News 18

“I do not understand if RBI has any technical reasons (for coming out with the new value note). If so, it should tell us,” he said at a press conference in Vijayawada.

He wondered if the Rs 2,000 currency notes were necessary and, if not, why were they being printed.

“I think it will not come. Some people are deliberately trying to mislead people,” the Chief Minister observed.

“If indeed it comes, it will be like falling from the frying pan into the fire. It should not happen. The government should once for all put a full stop to it. If at all, you may release it as a temporary measure and then withdraw. There should be a debate on this,” he said.

“If Rs 2,000 note had to be printed, it should be limited (in number) and should have surveillance. A Rs 200 is sufficient when you have banks and cheques. The Rs 2,000 note may be needed only if there are no banks,” he maintained.

The government should take steps to ensure Rs 2,000 note is not in circulation during election time and that it is not hoarded, Naidu added.

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