Author Topic: ₹500 and ₹1000 Banknotes are No More Legal Tender  (Read 13649 times)

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Offline Jostein

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #15 on: November 11, 2016, 05:17:47 PM »
The Spanish media has made a great coverage of the "shock" event. Here is the news given at the public television: http://www.rtve.es/noticias/20161110/colas-dos-horas-bancos-india-para-cambiar-billetes-ilegales-500-1000-rupias/1441080.shtml

 ;)
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Offline dsuramou

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #16 on: November 14, 2016, 10:10:24 AM »
I am looking for some advise here!

I have been collecting 500 & 1000 deno notes governor wise . With this announcement by the PM I am in a state of dilemma whether to hold back the collection or to surrender it for face value in the bank.  Post the cutoff of 31st Mar 2017, ideally these would not value any thing. Looking to hear views from people who are in the same stage.

Thanks & Regards

Deepak

Offline Bimat

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₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #17 on: November 14, 2016, 10:18:54 AM »
I am looking for some advise here!

I have been collecting 500 & 1000 deno notes governor wise . With this announcement by the PM I am in a state of dilemma whether to hold back the collection or to surrender it for face value in the bank.  Post the cutoff of 31st Mar 2017, ideally these would not value any thing. Looking to hear views from people who are in the same stage.

Thanks & Regards

I'm told that you can exchange these notes for an indefinite period (which ideally should be the case), but the only thing is that only a few banks will accept them and you will have to additionally provide some sort of declaration along with the notes (like an affidavit). Can someone confirm this? (Preferably with some sort of evidence, like RBI notification)

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline dheer

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #18 on: November 14, 2016, 10:39:54 AM »
I am looking for some advise here!

I have been collecting 500 & 1000 deno notes governor wise . With this announcement by the PM I am in a state of dilemma whether to hold back the collection or to surrender it for face value in the bank.  Post the cutoff of 31st Mar 2017, ideally these would not value any thing. Looking to hear views from people who are in the same stage.

Thanks & Regards

This is no different from, did you keep the older series of lower denominations and Rs 500 ... i.e. pre-gandhi series? These were also withdrawn last year. So if you have kept them, then logically you should also keep these.

If the question is you were collecting [Rs 500 and Rs 1000] for fun and at some point in time wanted to cash them out;  then I guess you should cash them out now.

Although one cannot predict things, most of Rs 500 / Rs 1000 will be available at discount or at face value for next few years. i.e. large horders not able to get rid of stuff, will dump it. However due to dynamics of distribution, we don't know what got retained and what got returned. So it may flare up some insets / years and make other cheap ...

After 5-10 years, everything will become antique and will have price. If inflation continues the way it is currently; these denominations will be worthless in 10-20 years and quite a few would be willing to collect ...
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Offline dheer

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #19 on: November 14, 2016, 10:41:40 AM »
I'm told that you can exchange these notes for an indefinite period (which ideally should be the case), but the only thing is that only a few banks will accept them and you will have to additionally provide some sort of declaration along with the notes (like an affidavit). Can someone confirm this? (Preferably with some sort of evidence, like RBI notification)

Aditya

Right now there is no notification, so 31-Mar-2017 is the date. However like you said, this would definitely get some extension. Whether this will be life long or few more months, we will have to wait and watch.
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Offline dheer

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #20 on: November 14, 2016, 10:45:24 AM »
As expected, a massive jugaad (as we say in India) has started.

Photo from Kolar, Karnataka: MLA and few politicians have given money to people in a meeting; 3 lacs (300k) per head as a loan.

Aditya

There was subsequent clarification, prima-facie this was done on Monday, well before the announcement. It is a common practise in rural area, the loans are given as cheques and then cheques are encashed in a public function.
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Offline dsuramou

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #21 on: November 14, 2016, 11:45:14 AM »
Right now there is no notification, so 31-Mar-2017 is the date. However like you said, this would definitely get some extension. Whether this will be life long or few more months, we will have to wait and watch.


Does any body has any contact of RBI so that we can seek more clarity on this ?

Thanks & Regards
Deepak

Offline dheer

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #22 on: November 14, 2016, 01:04:54 PM »

Does any body has any contact of RBI so that we can seek more clarity on this ?

Thanks & Regards

RBI is not going to tell any more now than what's already been formally said. Things are in flux and no one even in RBI can predict the future policy. It all depends on various factors. In times like this, its best wait for formal press release. Don't go by hear say.
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Offline Bimat

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₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #23 on: November 14, 2016, 03:17:44 PM »
Here's a seven month old news (Dated April 08, 2016), in which SBI (India's largest public sector bank) chairman talks about 'abnormal increase in deposits' due to 'rumors of demonetization of ₹500 and ₹1000 banknotes'. Does anyone here still believe that this was a top secret until November 08, 2016? I certainly don't. ;)

Rs 500, Rs 1,000 note rumours, not polls, behind cash surge: SBI

By Mayur Shetty, TNN | Updated: Apr 08, 2016, 12.17 PM IST

MUMBAI: The State Bank of India has said that RBI governor Raghuram Rajan's contention that polls are driving the surge in cash in the hands of the public does not explain the current spike, which is higher than other election years. The bank has said in a report that it is rumours of demonetization of Rs 500 and Rs 1,000 notes that is possibly driving people to withdraw cash in order to deploy them in 'safe' assets.

"We have seen even bigger elections in earlier years but the increase in currency with the public has not been that high. This time it is hurting our deposit growth and, after a long time, our deposit growth is less than advances," said SBI chairman Arundhati Bhattacharya. She said the reason for the cash surge was still a mystery. Some have attributed it to the jewellers' strike, which is preventing cash deposits.

In the research report, SBI chief economist Soumya Kanti Ghosh said that the common perception is that FY17 being an election year, people are hoarding cash. "However, had this been true, even FY14 should have shown the similar trend. In fact, that year witnessed a decline. Also in FY12, when Punjab and Uttar Pradesh went to polls, currency in circulation actually witnessed a significant decline. Does this mean that elections in Punjab and Uttar Pradesh are relatively more transparent than say other states like Bihar (reason for the possible increase in currency in 2015)"?

The report adds that elections may be only a small reason, but the bigger factor could be the trend in demonetization. "There are suggestions in public domain and even analysis that are suggesting that higher denomination notes may be replaced. We believe as a result of that people may be using more of high-value currency to purchase safe haven assets," the report said.

Bhattacharya, however, did not have an opinion on demonetization and said that was something that was picked up by the research department from what is being talked about in the environment.

The report warns that if demonetization is being contemplated, a road map needs to be created. "It needs to be done in steps and be balanced with creation of necessary electronic and digital infrastructure in the country, coupled with creating awareness and financial literacy for ensuring that the man on the street is not put to undue hardship," the report said.Going into the advantages of demonetization, the report said that demonetizing Rs 500 and Rs 1,000 currency notes will bring a huge amount of the funds kept in these denominations into the banking channels and will facilitate a reduction in domestic black money transactions.

But this would also be a headache when it comes to logistics. "At the branch level, the cost of handling cash would zoom and there would be complete chaos as the funds kept in these denominations will be flushed into the banking channels," the report said. The report goes on to say that introduction of a Rs 5,000 note will also not solve the problem and would continue to result in ATMs running dry several times a day.

Source: Economic Times
« Last Edit: November 14, 2016, 03:36:01 PM by Bimat »
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Offline Bimat

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₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #24 on: November 15, 2016, 06:00:22 AM »
RBI is not going to tell any more now than what's already been formally said. Things are in flux and no one even in RBI can predict the future policy. It all depends on various factors. In times like this, its best wait for formal press release. Don't go by hear say.

I think RBI is legally bound to refund the full amount paid in old ₹500 or ₹1000 banknotes, irrespective of when they are returned, as each and every note mentions so ("I promise to pay the bearer the sum of [...] Rupees"). As long as a valid proof is being presented, this should be no problem.

Having said that, this is a complex legal issue and we may see intervention by court at some point of time. Interesting times ahead. ;)

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

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₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #25 on: November 16, 2016, 10:11:18 AM »
30 tonnes of gold, worth around $1 billion, has been imported in last one week after ₹500 and ₹1000 notes were demonetized. It's assumed that large amount of black money has been used to buy gold!

Link

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Figleaf

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #26 on: November 16, 2016, 10:19:45 AM »
Reminds me of the story of two conservationists:

"Do you realise that somewhere, a woman gives birth to a baby every 4.3 seconds?"
"You are right. We have to find that woman and stop her!"

Stop that ship o'gold! :D

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Abhay

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #27 on: November 16, 2016, 11:36:34 AM »
30 tonnes of gold, worth around $1 billion, has been imported in last one week after ₹500 and ₹1000 notes were demonetized. It's assumed that large amount of black money has been used to buy gold!

Link

Aditya

This is not correct. The fact is that all the Gold that has been purchased after 8th Nov, 2016, is the Gold which was lying as Closing stock as on 8th Nov, 2016 with the Bullion Dealers/Jewellers.

This is simple to explain. As per the Current demonetization scheme, all the Currency notes of 500/1000 became illegal at 12:00 Midnight on 8-9 Nov. So, the sale of the Gold was shown in the earlier dates, and thus, the sales made upto 8th Nov, with the old currency notes, will be considered legal.

This is a route which is being adopted by all the other trades also, for channelizing the old currency notes  into the banking system.

Abhay 
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Offline Bimat

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₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #28 on: November 16, 2016, 11:49:20 AM »
This is not correct. The fact is that all the Gold that has been purchased after 8th Nov, 2016, is the Gold which was lying as Closing stock as on 8th Nov, 2016 with the Bullion Dealers/Jewellers.

This is simple to explain. As per the Current demonetization scheme, all the Currency notes of 500/1000 became illegal at 12:00 Midnight on 8-9 Nov. So, the sale of the Gold was shown in the earlier dates, and thus, the sales made upto 8th Nov, with the old currency notes, will be considered legal.

This is a route which is being adopted by all the other trades also, for channelizing the old currency notes  into the banking system.

As the article mentions, many gold traders are giving back dated bills to those who want to buy gold using their black money. So it is very much possible that they are stocking up gold entirely for black money hoarders...

But what will these traders do with the commission (in the range of ₹10,000-₹20,000 per 10 grams) which they have gathered? It's again black money in old notes, right? ??? A Delhi based gold trader sold gold for ₹41,000 per 10 grams right after PM made his speech, but bill showed ₹31,000. What exactly is their strategy?

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline dheer

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Re: ₹500 and ₹1000 Banknotes are No More Legal Tender
« Reply #29 on: November 16, 2016, 11:52:46 AM »
The same link shows "The country’s import of the yellow metal had stood at about $3.5 billion in October, according to GFMS Thomson Reuters estimates."

So compared to 3.5 billion for Oct, around 1.9 billion so far ... not to far off.
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