₹500 and ₹1000 Banknotes are No More Legal Tender

[dheer]

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

I guess most of the Jewellary there is no problem at all. They will just show large amount as making charges. Even after paying VAT / Taxes, they still make handsome profit.

On bullion bars / coins, not sure if there is a regulation that they have to sell at a specific price. If there is no regulation, they can sell at whatever price and invoice it for that amount, pay taxes and make money.

[Bimat]

Interesting news from North East:

Assam: Bhutan currency used as legal tender due to cash crunch

GUWAHATI: With the unavailability of Indian valid currency notes in adequate numbers, Bhutanese currency is being reportedly used as legal tender in parts of Assam bordering the Himalayan country.

Local television reports showed areas near to the Bhutan border in Kokrajhar district of the state where Bhutanese currency is being used for transaction.

While Bhutan currency is used in normal times also, its use is very limited and mostly confined for dealings across the border. But local people told television channels that they are now being compelled to use Bhutanese currency, exchanged against de-valued Indian high denomination notes of Rs 500 and Rs 1000.

An Indian note of Rs 500 is exchanged for Rs 400 worth of Bhutanese currency, while a Bhutanese Rs 500 note is held for its face value. The situation was the reverse prior to the demonetization move, when Indian Rs 500 fetched as much and the Bhutanese Rs 500 was taken for value of Rs 400.

Local people while speaking to newsmen said the nearest banks and ATMs are located 50-60 km away through bad roads and there is no surety of getting notes exchanged even if one visits the branches and stands in long queues. " We are being forced to use Bhutanese currency in these parts. If the government could send mobile money vending machines, it would help us immensely," the people pleaded before the television cameras.

Meanwhile, there was hardly any respite for the common man as serpentine queues in front of banks and ATMs continued throughout the state. The bank authorities said the situation is expected to improve as more ATMs are being recalibrated to dispense smaller denomination notes and new Rs 500 notes are also arriving.

Source: The North East Today

[Enlil]

Sounds like this is turning into a disaster.

[Bimat]

Sounds like this is turning into a disaster.

Over 40 people have died due to demonetization (heart attack due to standing in queue for a long time, farmer suicides as a result of cash crunch, private hospitals refusing treatment etc).

A person has filed a case against PM and RBI Governor in the court saying that it's his basic right to withdraw whatever amount he wants from his account and government can not put any restrictions on it.

They are changing cash withdrawal/exchange rules everyday and creating confusion (new rules have just been announced). They are now putting indelible blue ink on the finger (as it's done duing elections) when you exchange old notes for new notes at bank counter so that same person doesn't exchange money from different banks. What a shocker!

Yesterday, government told parliament that it was RBI's decision and not PM's. It seems that RBI governor will soon be made a scapegoat. He hasn't faced media/press even once after the decision was announced.

Aditya

[dheer]

Over 40 people have died due to demonetization (heart attack due to standing in queue for a long time, farmer suicides as a result of cash crunch, private hospitals refusing treatment etc).

The number look exaggerated. Even a single death is sad. In today's hyper media, it is difficult to find out what is true and what is twisted facts. In one of the case of infant death; the investigations have revealed that the birth was at home and when taken the doctor, she advised them to immediately take the newborn to neonetal center in Sion; this was delayed by parents. The other where a person died outside HSBC Bank, the clarification from HSBC was carried in Corrigendum HSBC does not have any ATM or Branch in that area.

Distinguishing facts from fiction is becoming more difficult 

[Bimat]

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!

Reminds me of an American major, who said "We had to destroy this village in order to save it" during Vietnam war.

(Applicable to Indian government here)

Aditya

[Bimat]

Some unique methods of queuing have been discovered. Link in Marathi, but the photos tell a story.

Link

Aditya

[Bimat]

Banks recirculate soiled banknotes by spraying perfumes, insecticide

IANS, New Delhi |  Updated: Nov 19, 2016 17:37 IST

Fuelled by an unprecedented cash crunch after the government spiked high-value currency notes, some banks are receiving soiled, smelly Rs 100 notes for recirculation.

Many customers in Delhi complained to IANS that they received mouldy notes, some of which smelt 'very bad'.

A bank manager, who asked not to be named, told IANS, "The RBI is sending old 100 rupee notes stored for years but not destroyed, These notes smell. We are spraying them with perfumes and insecticides before disbursing them."

The manager said Rs 100 notes worth millions of rupees have been recirculated to narrow down the huge demand-supply gap in cash after the November 8 demonetisation of 500 and 1,000 rupee notes -- which accounted for 86% of the currency in circulation by value.

Usually, such soiled notes are returned to banks by the customers and they finally end up in RBI offices where they are shredded and ferried to dumping sites.

The finance ministry and the RBI have repeatedly insisted after demonetisation that there is sufficient number of new Rs 2,000 and Rs 500 notes to replace the old notes.

But long queues outside banks and ATMs continued on the 11th day since the government declared that two high-value banknotes would no longer be legal tender.

Some attribute this crunch to logistics - it will take time to get the new notes to bank branches across the country.

Others say it is related to printing capacity - based on capacity of four currency presses in the country the demand-supply mismatch will take anywhere between six and nine months to bridge.

Source: Hindustan Times

[Bimat]

I want to meet the idiots who are taking such decisions. ₹5000 per week for a foreign tourists? And an entry in passport for that?!? Do these people even realise what damage they are doing to the tourism industry? We all knew that there's a shortage of new notes, but this is new low!!!

Aditya

[Enlil]

I was suppose to go to a wedding in February in Punjab. Now I do not think so.

[quaziright]

My friend who is in India currently got me some of the old banknotes and this new one. However he's suggested that I forget ever coming to India for a vacation and go to Sri Lanka instead. Apparently, its got much better hygiene standards, people are more honest and tourist friendly, and the air is much cleaner. This whole démonétisation thing doesn't give me a good impression of a place to visit, especially now that when I think about it, the Maldives is probably more easily accessible from Sri Lanka. I'll probably take his advice. Though I may still see the country if it is ever a stop over en route elsewhere., but probably won't make it a destination

[Enlil]

Oh so you can not exchange them after 24 November.
http://timesofindia.indiatimes.com/india/Demonetisation-tightens-No-more-exchange-of-Rs-500-and-Rs-1000-notes-Centre-announces/articleshow/55603482.cms

[Bimat]

Oh so you can not exchange them after 24 November.
http://timesofindia.indiatimes.com/india/Demonetisation-tightens-No-more-exchange-of-Rs-500-and-Rs-1000-notes-Centre-announces/articleshow/55603482.cms

That's correct. On November 8, PM had said that people can exchange their old notes for new ones with a limit of 4k per head till November 24, after which the limit will be increased. This exercise was to be carried out till December 30. Subsequent RBI notification also said the same. A couple of days later, RBI clarified that the limit of 4k per person is not 4k per person per day, but only once till December 30. All these notifications are in public domain.

What has been decided yesterday is a complete U-turn by the government. Now you MUST deposit the old notes in your bank account and withdraw money from ATM (with a limit of 2.5k per day/24k per week max). The problem is that most of the ATMs are still running dry. I was at a busy railway station in Mumbai on Wednesday where there were 10 ATMs and only one of them had cash, with long queues outside it. Now imagine the situation in rural areas!

Bank employees' association has already said that it will take at least 6 months to restore all the cash flow. They have also claimed that at least 11 bank employees have died due to immense pressure of the work and they are demanding resignation of RBI governor for all this mismanagement...

Aditya

[dheer]

Close to 60% of the OHD has been received till date. With 4 more weeks to go, it looks like substantial amount of OHD will get recovered at Banks.

This means India did not have any Black Money, or the it was conveniently exchanged to new currency. Goes to show how creative people can be and how ineffective any medicine can become.

[Bimat]

Close to 60% of the OHD has been received till date. With 4 more weeks to go, it looks like substantial amount of OHD will get recovered at Banks.

This means India did not have any Black Money, or the it was conveniently exchanged to new currency. Goes to show how creative people can be and how ineffective any medicine can become.

First week of demonetization: Aim was to curb black money.

Second week of demonetization: Aim was to prevent fake banknotes; ready to be sent to India on India-Pakistan border.

Third week of demonetization: Aim is to make India a cashless (or less cash) society.

Next week: ?



Aditya