India needs a Rs200 note, not a Rs2,000 note and the science behind it
What should be the size of the Apple Mac screen? Technically, Apple can produce hundreds of different sizes, but they have settled on four: 13.3 inch, 15.4 inch, 21.5 inch, and 27 inch. The four are spaced close enough, and far enough to satisfy most Apple consumers. 
 
Industrial design has a mathematical concept called preferred numbers. Way back in 1870s, a French engineer Charles Renard proposed a system based on logarithmic scale to produce a limited number of sizes to cover a wide range. A variant of that internationally accepted system is the 1-2-5 series, which is widely used in minting coins and printing notes.
 
The 1, 2, 5, 10, 20, 50, 100, 200, 500, 1000… is that series. The beauty of the series is that any adjacent numbers differs by a product of 2 or 2.5. As a result, they are spaced close enough but cover a wide ground. How? Let us look at an Indian street vendor who still measures the fruit he sells on old-fashioned scales. If he has weights of 100gms, 200gms, 500gms and 1 kg, he can give you fruits in multiples of 100gms by using a maximum of three weights. E.g. 800 (500+200+100), 900 (500+200+200). In no case does the seller need to use four weights. If you must follow the decimal system, this is an extremely efficient system. 
 
Now look at the Indian banknotes. Until 8 November 2016, India had currency (notes or coins) with a denomination of 1, 2, 5, 10, 20, 50, 100, 500 and 1000 rupees. Below Rs100, transactions were efficient. The gap between Rs100 and Rs500 (1:5) has been too large. Over the last few years, it has produced inconvenience (certainly) and contributed to inflation (probably). It is well known that bigger values and larger gaps can increase prices. In January 2002, when most European currencies converted to Euro, prices rose on many goods as a result of rounding up. This rounding up phenomenon has made coins below one rupee disappear from India. 
 
I had hoped that Reserve Bank of India (RBI) would use the demonetization to introduce a Rs200 note. That would have bridged the gap between Rs100 and Rs500 and made the cash economy efficient. What we got instead was a Rs2,000 note. 
 
With the death of the Rs1,000 note, the new ratio of Rs500-Rs2,000 (1:4) to follow the already inefficient Rs100- Rs500 (1:5) is not sustainable, now or in future. And since the new Rs500 note is as yet rarely available, the ratio currently is Rs100-Rs2000 (1:20). When the maximum prescribed ratio for efficiency is 1:2.5, in practice we have 1:20, which is catastrophic. That is why; we have millions of people with wads of Rs2,000 notes unable or unwilling to make a small purchase of Rs200.
 
This is pure and simple mathematical illiteracy. I expect the Reserve Bank to be aware of the Renard series, which is an ISO standard. Politics and economics can be subject to opinions, but not mathematics. You invite disaster when you do not follow the basic number rules. 
 
What India needs to do urgently is to introduce an Rs200 note. And if Rs1,000 is to be permanently abandoned, then to withdraw Rs2,000 as well. For efficient transactions, the ratio in the 1-2-5 series must never exceed 2.5. 
 
(Ravi Abhyankar is an independent analyst and strategic advisor.)
 
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COMMENTS

Anoop Sharma

2 years ago






I had posted on 11th Nov 2016 on Facebook "I have started this and you all will do this" If you Agree Please Share......(This Is in my mind)
In India we have 1 rupee 2 rupee 5 rupee coins /// we have 10 rupee 20 rupee 50 rupee note/// 100 rupee ???......... then 500 rupee.
200 rupee note missing from the line which should be there for better exchange
If Agree please share so that govt Print 200 rupee note insted 2000 rupee note which is hardly required
"Share karo 200 ka note lana hai"
Anoop Kumar Sharma.

REPLY

Gaurav Aggarwal

In Reply to Anoop Sharma 2 years ago

Hahahaha I posted in 2013
4years back all these points when no one was even dreaming of it.
So need not panic dear.
Also I recieved a letter from RBI saying they have noted this suggestion and may work it out in April2013.
https://m.facebook.com/story.php?story_fbid=488430254555819&id=100001665450912

Gaurav Aggarwal

In Reply to Anoop Sharma 2 years ago

Hahahaha I posted in 2013
4years back all these points when no one was even dreaming of it.
So need not panic dear.
Also I recieved a letter from RBI saying they have noted this suggestion and may work it out in April2013.
https://m.facebook.com/story.php?story_fbid=488430254555819&id=100001665450912

Sunil Harlalkaa

2 years ago

There is a Golden Ratio of everything. Renard series is one of them. The govt will launch Rs 200 Rs note by September 2017. This launch will be to save on printing and transportation costs. Yes the govt wants to increase cashless transactions but Rs 200 would be launched too .
In 2018 a Rs 5000 would be launched ( 2.5 of Rs 2000 )
In 2021 Rs 10,000 would be launched ( 2 times of Rs 5000)
Only time will tell

Sunil Harlalkaa

2 years ago

There is a Golden Ratio of everything. Renard series is one of them. The govt will launch Rs 200 Rs note by September 2017. This launch will be to save on printing and transportation costs. Yes the govt wants to increase cashless transactions but Rs 200 would be launched too .
In 2018 a Rs 5000 would be launched ( 2.5 of Rs 2000 )
In 2021 Rs 10,000 would be launched ( 2 times of Rs 5000)
Only time will tell

Sunil Harlalkaa

2 years ago

There is a Golden Ratio of everything. Renard series is one of them. The govt will launch Rs 200 Rs note by September 2017. This launch will be to save on printing and transportation costs. Yes the govt wants to increase cashless transactions but Rs 200 would be launched too .
In 2018 a Rs 5000 would be launched ( 2.5 of Rs 2000 )
In 2021 Rs 10,000 would be launched ( 2 times of Rs 5000)
Only time will tell

Prateek Dalmia

2 years ago

No doubt,it will cause efficient working of the economy.
There are many economists in our country. All have brief knowledge of ecomomics. Even our PM Namo also consulted to an economist before taking this step.
Many of them are supporting Namo and are saying its a nice move of the government to give a glimpse of better tomorrow while other are against it.
Whom to believe??

Rajesh Acharya

2 years ago

The logic is sound but misses a very important point. The GOI is trying to do away with "cash based economy" and leap-frog to the digital, trackable world of cashless. This "₹200" or other filler notes would defeat the purpose. The strategy of GOI should be to keep "cash hoarders / tax evaders / criminals" guessing and every few years demonetizing notes, if they don't learn their lessons!

Gaurav Aggarwal

2 years ago

https://m.facebook.com/story.php?story_fbid=488430254555819&id=100001665450912

See what I told RBI in 2013

Ravi Khot

2 years ago

Has his suggestions reached RBI ? A friend has offered to help and therefore needs the email ID of Ravi Abhyankar.

Pankaj Jangid

2 years ago

One of the readers commented on bringing back Mr. Raghuram. While This article is not relevant to this matter but just want to let him know that RBI had proposed a ₹5000 note under Mr. Raghuram.

Rajesh Gupta

2 years ago

bring back raghu ram rajan ( R3) at the post of RBI governor is the only solution. there is always a difference between politician mind and academician mind. one can not perform both function at a time. do not try to make India equal to america or Europe in just 5 yrs time span.

Rajesh Gupta

2 years ago

bring back raghu ram rajan ( R3) at the post of RBI governor is the only solution. there is always a difference between politician mind and academician mind. one can not perform both function at a time. do not try to make India equal to america or Europe in just 5 yrs time span.

Dilip SK

2 years ago

I think it was intentional to create the gap so that people have a problem. Lack of availability of cash will push them to go cashless

REPLY

Pankaj Jangid

In Reply to Dilip SK 2 years ago

Probably, this is true. And probably ₹2000 note will go away in very short time.

Pradeep Kumar M Sreedharan

In Reply to Dilip SK 2 years ago

My line thinking too.

Anurag Kulkarni

2 years ago

Hi How can I get in touch with the author?

Pradeep Kumar M Sreedharan

2 years ago

Besides this, I wish RBI would ensure interoperability of various digital Wallets, for reasons obvious.

Sreedhar Souparnika

2 years ago

The damage has already happened and now it is time to think of alternate solutions to reduce the difficulties faced by common man. As suggested it would have been better to introduce Rs.200/- or Rs.250/- denomination currency notes instead of high value note of Rs.2000/- which has created the confusion and matters becoming worse for the common man. Yet another suggestion is to introduce Coins for all denomination currencies of Rs.20/- and below. Though the step for demonotisation was welcomed, I think Mody was ill-informed of the possible consequences by the bureaucrats in Finance ministry and RBI. Or even they do not want to be on the wrong side of Mody's books. Urjit Patel took over only a few weeks back and may crave for a post in the next ministry. What happened to the learned economists in Finance ministry and and DBOD ?. Now the worst is yet to come unless immediate proactive steps are not being initiated . To err is human but not with the lives of innocent millions in the country.

Demonetisation: Implementation is highly anti-poor, says Dr KC Chakrabarty
Here is an interview with Dr K C Chakrabarty, former Deputy Governor of the Reserve Bank of India with Moneylife. Dr Chakrabarty gives us his no-nonsense views, for which he is famous, on how to tackle the issues raised by demonetisation of currency. A banker for over 40 years, his is an insider account… 
 
Moneylife (ML): Based on what you have observed so far, there is no doubt that demonetisation ought to have been planned better. Would you have suggestions on how to salvage the situation or improve things even now, to minimize the negative impact?
 
Dr KC Chakrabarty (KCC): The negative impact is that you have to print new notes and you have to distribute them equitably. I believe that the present system of implementation is highly anti-poor. A person who has five bank accounts can withdraw Rs1.20 lakh. A person, who has only one bank account in a rural area, is not able to withdraw anything and is standing in the queue. The policy seems to be that the poorer you are the more you will be hurt. Look at another example. If I have five ATM cards, I can draw Rs10,000 even today. Nobody has bothered about this issue. When something is in short supply, you cannot manage things with a rule. I would say if you want to permit withdrawal beyond Rs2,000, you impose a fee. A sort of cash transaction charge. 
 
ML: A charge to withdraw my own money? That is a radical suggestion. Won’t it hurt the poor?
 
KCC: Oh yes, a charge to withdraw money. That is because you are not able to give everybody the cash they want. You will have to ration it. One way is to make it equitable is to levy a fee, so that people only withdraw what they really need. You can reimburse the poor like you do with the LPG subsidy. Otherwise, you are not going to be able to control the situation. 
 
In addition, if you want to encourage digital transactions, it will not happen by speech alone. You have to make it more expensive to do cash transactions while digital transactions must be free or even incentivized. As it is banks are charging you for withdrawing money from ATMs (more than three withdrawals a month), but they do not charge you to withdraw money from the branch.
 
Another important issue is the geographical distribution of currency notes that are being printed.  You have to be able to reach the currency to the last mile. Transporting currency is not easy. You can have Air Force planes carrying it up to a point, usually to locations where there is an airstrip. But you need to distribute it securely even after that.
 
I have dealt with these situations before. It is all very well to say that the army or the Central Reserve Police Force (CRPF) will provide security, but the fights begin over who will pay the charges for it. There is bureaucracy and red tape everywhere.
 
These issues need to be monitored on a real time basis. We need an on-going declaration by the RBI of what denomination notes – especially Rs500 and Rs100 have been supplied to which area on a daily basis and how many have been received from the security presses. The disclosure must be complete in terms of production, transportation, distribution and last mile availability, only then will you have a snapshot of what is happening at the ground level. Today, all this information is computerised and available; why can’t it be put in the public domain? Do we know where the Rs100 notes are going? Is it to metro cities or rural areas?
 
If we expect people to bear the pain and suffer for some time, then we should also know how much I am suffering vis-à-vis other people. 
 
When something is in short supply, the big question is, is the currency being rationally, equitably distributed in terms of denomination and geography. 
 
ML: Will you explain the currency situation today, based on your knowledge as a Bank Chairman, Central Banker and a statistician:  We believe that the government has put on hold printing of Rs2,000 notes and has asked RBI presses to print Rs500. How long before these flow into the market and when can we see some mitigation of the situation? 
 
KCC: If they work very efficiently, it will take at least five to six months’ time before the situation stabilizes and they are able to supply all denomination notes. We need to print more Rs500 notes and Rs100 notes and distribute them swiftly. When anything is in short supply, even currency, there will be hoarding.
 
There are several issues in achieving this. I am privy to certain information so I can tell you that the second press is in a mess for the last two years. The Chairman and Managing Director of Security Printing and Minting Corporation of India (SPMCIL), which is under the central government, was sacked just a few months ago following a public interest litigation. This is in the public domain. There have been other problems earlier too.  How will you manage a crisis situation when you do not have a chairman of the company? A joint secretary, who does not understand issues involved in high security currency printing.
 
ML: How can the printing process be hastened? There are some estimates about the presses working in two shifts and there is talk about whether they can work in three-shifts. What is your view?
 
KCC: That is not possible. Do you have people even to work in two-shifts? If you try to push them to do more, there could be a breakdown because of wear and tear of old machines. What happens then? People must also understand that currency printing is done in a highly secure environment. Even if I entered the security press, I have to go through a series of checks. My pockets are also checked, even as chairman of the company. Therefore, you cannot simply put temporary people on the job in the printing press and ask them to produce more currency.
 
ML: What is your solution?
 
KCC: I believe that the banking system will not be able to deliver so you need a master plan to deliver currency – first to various hubs and then to the last mile.  You need to have a franchisee model where people pay for the cash. In rural areas, people have to travel 10 to 20kms to get cash, so they incur expenses already. 
 
It is a myth that you do not want to burden the poor- the reality is that they pay more for everything even today, if nothing else in terms of time and productive work hours lost. We are used to giving lip sympathy to the poor.  So the poor will not mind a charge if the system works and they get their money without hardship– you can always reimburse them by way of a direct refund into the accounts of the really needy.
 
Earlier we used to make foreign exchange available at bank counters. If they could make forex available, why cannot they do so with domestic currency?
Our public sector banks (PSBs) are not competent to ensure last-mile reach despite their network and non-public sector banks do not have a network. So it has to be done on a commercial basis. You may need to regulate the fee charged, but unless you create franchisees, you will not be able to reach currency through the banking system.
 
Do you know there used to be a flourishing business for procuring and distributing small change, small denomination new currency (Rs5, Rs10 and Rs20)? The business operates very close to Reserve Bank’s regional offices and RBI employees are fully aware of it. Go and check who are the people in the queue to procure new currency or exchange soiled notes—they are all touts.
 
When anything is in short supply (clean notes) there is a premium for it. RBI officers are fully aware of what is going on, that is why I had said, RBI should not distribute any currency at its offices; they should concentrate on banking supervision. However, my suggestion was opposed by the employee unions.
 
So my solution is that you need a franchisee model to ensure distribution of currency to the last mile – you can regulate the business, fix a price and give direct subsidies to the poor into their bank account, but initially everybody must pay. That is the only solution. Instead, today you have the Prime Minister’s Office (PMO) doing workshops on digital payments and mobile. That is not the job of the PMO.
 
ML: We are still not clear if this franchisee idea will be accepted.
 
KCC: As a deputy governor, I had recommended this in a report, sometime in 2013, when Dr D Subbarao was the governor (of RBI). I was heading a committee comprising to looking into the shortage of coins and notes in the system and how to improve the distribution.  My report is lying with the Finance Ministry. They have not even made the report public.  The report clearly said that you will not be able to improve last mile availability of notes and coins unless you have a franchisee model.
 
ML: You have been a big proponent of empowering those who do not have bank accounts.  A large number of no-frills accounts were opened during your tenure as deputy governor. Will demonetisation and the desperation for cash change things?  What are your thoughts on digital transactions? 
 
KCC: You have to bring down the banking transaction costs. The fact is that banking transaction costs are so high that people are afraid of going to the bank. This is true across the globe. Even in the US, 20% to 25% of the people do not use bank accounts because cost of banking transactions is very high. 
 
In India, at the very least we should have a proper consumer protection system in place. You may push a person to do digital transaction, but once a person has lost money at an ATM or in a digital transaction, he will stay away for 10 years. All over the world, unless the bank can prove that the customer is at fault, his money should first be credited to his account. That is a global rule. This is not yet implemented in India – there is only a draft notification. So you have to make things cheaper and safer for people. When the rich lose money, it makes news, but when the poor lose money, especially in a remote rural area, they have nobody to turn to and it is lost forever.
 
ML: Would you have any specific thoughts on how to tackle black money?
 
KCC: There are three sources of black money in our country – 
election, religion and administration. So first, you make all political donations cashless. The second source is religion. If you put money in a hundi at the temple, the minute they put it in the bank account, it becomes white. There is no know your customer (KYC) for that, but in a JanDhan account you are going to investigate all deposits above Rs250,000. The third is administration. All the perquisites enjoyed by government officials, members of Parliament (MPs), ministers and judges must be taxed at market value and valued on the basis of cost-to-company or country. Our ministers stay in a free residence, that is tax-free – why should it be priced at market value? Same goes for telephone calls and travel. You can pay them Rs1 crore as salary, but ensure that everything is taxed and priced at market rates. 
 
(Disclosure: Dr KC Chakrabarty is on the board of trustees of our sister entity Moneylife Foundation, a not-for-profit organization engaged in advocacy for savers and spreading financial literacy
 
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COMMENTS

Mahesh S Bhatt

2 years ago

Excellent Dada Chakraborty.Enjoyed Namskar
Mahesh

Rajesh Gupta

2 years ago

the views and suggestions by KCC are valid and holds true in the context of indian economy which is eventually based on agri and poor rural citizens. who is responsible for the death of poor standing in queues to get their own hard earned tax paid money. just only some sympathetic words & responsibility over. short term pains for long term gains for what???? why no compensation announced for all those murders while crores of rupees are wasted on the unproductive issues. right said for taxability of income of all politicians, MPs, MLAs, ministers, etc.

tikku

2 years ago

I fully agree and add that India is not pro poor if not Anti poor. Successive Gov have done nothing concrete for them except announcing packages, not ensuring that it ever reaches them. Enact laws, without ever checking back if it is implemented. And --if not implemented, never check back why. If at all reality and responsibility for failure is known, Govt does its best to hide its failure. Demonetisation has only troubled the poor people. Why are the rich never seen standing in a queue?

Gurudutt Mundkur

2 years ago

If Dr Chakrabarty believes that the Rs 500 rupee will be welcomed by the "poor", then India is a very rich country. Just imagine, the roadside vendor deals only in rs 500 rupee note, or the village kirana shop owner does business in Rs 500 rupee notes, we are living in paradise.

Doctor Prait

2 years ago

A few notable points and responses to them -
When KCC says : Our public sector banks (PSBs) are not competent -
- what did you (KCC) do in office as Dy.RBI Gov. to ensure that these PSBs are made competent ?
- can the evil of competency Vs. in-competency be dealt with overnight ?
- who hired those people as - Bank Employees with just 25% marks (just because they enjoy constitutional reservation) - to be competent enough to run the bank ?
- you (KCC) might come under fire for issuing such statements - as incompetent Bank staff of the PSBs. Well, there are things people can throw up on you - e.g. you are from Upper Caste and you are insulting the reserve castes !

Now on the case of when KCC says - my suggestion was opposed by the employee unions - who allowed these unions or formulated them ?

All in all - I did NOT see such articles OR interviews from KCC years ago - what was he doing during those days - 15.06.2009 to 25.04.2014 ( 1776 days OR 253 weeks and 5 days OR 42,624 hours )

REPLY

Adarsh Dogra

In Reply to Doctor Prait 2 years ago

The way i see the ideas (i don't understand all of those entirely) shared in this article, "The land has turned fertile (thanks to demonetisation drive) after few decades and hope more ideas will pour in." May be the top ex-bureaucrats have realized the 'INHERITED MERITS' are not significant in changed (read intolerant India) environment, hence to sound rank (even EX) worthy, something REAL need to be proposed.

Ashok m Rane

2 years ago

It is easier to say many things when u r out of d office. The charges on ATM transactions a were in force when Mr. Chakrabarty was in Office as Dy. Governor of RBI.

REPLY

Govinda Warrier

In Reply to Ashok m Rane 2 years ago

Nothing like that. He used to make experiments and failure was built in, in some of his projects like recruitment of Executive Interns,messing up a funded pension scheme and making suo moto observations criticizing RBI decisions to which he was also party. Mostly, it was others who "got punished" For some time, he enjoyed the freedom from work, when Subbarao was Governor.

Simple Indian

2 years ago

As I have mentioned earlier, I am appalled that even an ex-Dy Gov of RBI hasn't raised the issue of why 86% of high-value notes (Rs. 1000, 500) were printed by RBI over the years ? Is there any rule/policy to restrict printing of high-value notes at all ? About time there is, as circulation of such high-value notes only aid black-money hoarders, who find it lot more convenient to hoard their illicit income in high-value currency. With the introduction of Rs. 2000 notes, this will get compounded over time. Besides, it's hard enough to get change for Rs.500 in daily life, so it's inexplicable the Govt/RBI introduced the Rs. 2000 notes in the first place.
I disagree with ex-Dy Gov on charging people to withdraw their own money from Banks/ATMs. Instead, well before (or even now) demonetization was done, the Govt & Banks ought to have promoted UPI-based Apps aggressively for adoption atleast in urban areas, which would have eased the pressure on cash supply in these areas. The rural areas have different set of issues, so they will remain a cash economy for now. Hence, though this demonetization exercise is believed to help the economy in the long run, the shoddy manner in which it was hastily done will make it ineffective to a great extent. Also, unless this is followed up with a series of other major reforms in other areas like real estate purchases, election funding, donations at religious places, etc. this supposed fight against black-money will yield few gains, if at all.

B. Yerram Raju

2 years ago

Wonderful interview with an experienced banker. In one vein he says transaction costs should be least and on the other he says cash withdrawals should be charged!
I agree with the view that all digital transactions shall be free of any costs. I also agree with the view that cash transactions from the accounts, say above a threshold limit above the ATM draw by a couple of thousand rupees should be charged. All ATMs shall dispense cash below Rs.500, because most people draw cash for meeting their day to day cash pay-out and in small sums. All Banks having small coin depots should have coinage bags of value of Rs.1000 for dispensing to the public. His Report lying in the Ministry of Finance should be taken out of the cupboard for implementing all feasible suggestions. Franchisee model suggested by him is infeasible in India in so far as cash delivery from the RBI is concerned. It is fraught with high security risk. We have the glaring examples of Cash Vans for ATM-fill escaping with cash!!
Over and above all these, all the existing printing presses other than the latest in Mysore need upgradation of technologies with least possible delay.

Rahul Pande

2 years ago

Besides election,religion,administration,I would add discretionary power vested in so called demigods who consider their action sacrosanct .

DINESH KOTECHA

2 years ago

Dr K C Charkrabarty, an experienced campaigner of RBI has shared his insightful understanding. Been there, Done that, so he knows the logistics of the problem and it
solution. Has the government taken care of the problem from the facets explained by Dr.
highly improbable?

Shrikant Dattatraya Sahasrabuddhe

2 years ago

Great interview in present context.Must reach the same to PM immediately.

vswami

2 years ago

OFFHAND
As rightly said, his being an insider account, see no reason whatsoever in strictly following /implementing his quite valuable suggestions.

On tax - free perqs., was not the suggestion to be read, - why should it NOT be priced at market value?

Incidentally, to quickl recall, according to information, the Singapore government, regarded /spoken of as a role model by our men in power whenever that suits, as a matter of rigid policy never provides any tax-free perqs., to any government servant , in any form (or substance)- is that not true !

REPLY

Govinda Warrier

In Reply to vswami 2 years ago

Really. Now we should think in terms of a wage structure and social security systems comparable with Singapore across government, public and private sectors and at all levels. This should be possible once all resources come to the mainstream and corruption reduces to manageable levels.

vswami

In Reply to vswami 2 years ago

my, my ! in opening sentence, to read - "..., see no reason whatsoever in NOT strictly following /implementing...."

Mohan Krishnan

2 years ago

I really don't know if this demonitization will be successful because as I hear in TV Channels various nefarious activities are taking place post announcements;
1. Magicbricks TV channel exposed that even now Real Estate transaction are taking place with Black Component as high as 60% and can be paid in old notes.
2. CNBC Awaaz says hawala rate for old notes is about 82 per USD.
3. Many rich Indians have been making short trips after announcement. (Hawala deposit into Foreign account?)
4. Petrol Pumps are making hay because they can easily convert Rs. 100 and below notes paid by some customers to be exchanged for old notes. Same with Railway Counters.
5. Banksters are working to help their rich customers via various means.

Watching various TV channels on this topic I am skeptical if this demonetisation is worth the effort and sacrifice of Citizens.
If all of above are true then I expect almost all the demonitised notes should come back making mockery of the whole exercise.

REPLY

Govinda Warrier

In Reply to Mohan Krishnan 2 years ago

Last paragraph first. On this, clarity will emerge by April 2017. As regards corrupt practices being reported, I look at them as a positive, because earlier people accepted them as "part of the game". Now some protest, some investigation, some follow up, is happening. Whatever be the criticism about missing backward and forward linkages, my perception is that there is general acceptance and net effect will be positive.

Mohan Krishnan

In Reply to Govinda Warrier 2 years ago

We have about 80,000 ITOs and much smaller ED force. How can they manage such a huge operation?
Further due to slowdown in economic activity, various states will demand from Centre for compensation due to loss of Tax Revenue?
Seems it will be complicating and trying time for the Centre.

Govinda Warrier

2 years ago

Those who are in charge of governance and policy formulation should keep these ideas in view while planning for the future. The 2013 report the Ex-Deputy Governor mentioned(lying in the Finance Ministry) also should be examined by the ministry on a priority basis. In view of the disclosure at the end, no comments on the general criticism of the system. The Privatisation of currency distribution may not be in the best interest of the nation at this stage.

Govinda Warrier

2 years ago

Those who are in charge of governance and policy formulation should keep these ideas in view while planning for the future. The 2013 report the Ex-Deputy Governor mentioned(lying in the Finance Ministry) also should be examined by the ministry on a priority basis. In view of the disclosure at the end, no comments on the general criticism of the system. The Privatisation of currency distribution may not be in the best interest of the nation at this stage.

Withdrawal from Jan Dhan accounts cut to Rs 10,000 a month
In view of reports of Jan Dhan accounts being used to hoard unaccounted money, the Reserve Bank of India has curtailed the withdrawal limit from such accounts to Rs10,000 per month.
 
"Fully KYC compliant account holders may be allowed to withdraw Rs10,000 from their account, in a month," RBI said on Wednesday.
 
"The branch managers may allow further withdrawals beyond Rs10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank's record," it said.
 
For non-KYC compliant accounts, the withdrawal limit has been fixed at Rs5,000 per month from the amount deposited after November 9, with an overall ceiling of Rs10,000.
 
"The decision has been taken to protect the farmers and rural account holders of Pradhan Mantri Jan Dhan Yojana from activities of money launderers and legal consequences under the benami property transaction and money laundering laws," it said.
 
Earlier, the government had warned people from letting their Jan Dhan accounts being used by people to park their unaccounted cash.
 
The Finance Ministry had set an upper limit of Rs50,000 for deposits into Jan Dhan accounts.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

tikku

2 years ago

Tikku, is a common ex soldier, can only think on what is happening on the ground to the common people. Cannot think like learned people and the financial experts. As they say, only 6% of black money is involved in this demonetization drive, and most part of which may be the money hard earned and not Black, is not worth the action to cause the death of 70 people., let alone the pains suffered by the common mass. We must not think that others life is cheap except yours own. Rickshaw puller standing in queue for Rs 2000/- instead of pulling his rickshaw to earn for another day to feed his family and yet saying, we are doing it for the betterment of tomorrow, must not be taken on face value. Why only poor people must suffer as they are even after 69 years from our independence? Why are those on the Governing seat are not ashamed of it instead of blaming each other and getting fatter themselves everyday? Now since the move is on, reversal will be foolish and very damaging. Govt now on is requested to spare the common man and go after the real big fishes instead, even though they have already made their ill gotten wealth very legal in shape of Land, Resorts, Big schools, and other real states. Also the money stashed away by them in other countries,--as promised by Modiji during his election campaigns.

Ashok m Rane

2 years ago

It appears that All d decisions r being taken on trial and error basis on various problems created by Demonetisation.

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