demonetization-state-bank-of-india

(Even mannequins are queuing up outside banks)

Shameless self promotion: You should download our Digital Payments report here. No cash needed, because it’s FREE. (but you can patronise our work here)

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November 25th (yes it’s still 2016) – updates from Nikhil today.

 

17: 40: Reuters reports that last month, steel ministry officials met with PM Modi to find measures for bad loans and cheap Chinese imports. FM Jaitley then met with top lenders like SBI and ICICI Bank among shipping ministry officials and state owned companies to give them a list of 23 troubled steel, power and shipping companies who had bad loans of $14.5 billion.

17:30: What about the firecracker vendors?

17:25: And then you have Three Men In A Boat:

17:20: Janata Dal found documents where BJP purchased real estate before the demonetisation move:

Income from unknown sources from political parties

17:15: But the poorest labourers, farmers, small business owners and shepherds like Kokre appear to have been affected less by the demonetisation because they either earn too little to save or survive on what they themselves grow. IndiaSpend reports from the rural areas of Pune, Ahmednagar, Palghar districts and Mumbai and Navi Mumbai.

17:00:

 

16:49: So a little later than planned, but here’s our overview of changes in RBI policy since yesterday:

No more currency exchange except at RBI counters; More updates

15:13: A bit of an aside, or maybe not, but the one of the things that usage of digital money generates is data. The government of India has doubled the money NATGRID is going to receive in this financial year. So? Well, government agencies which hold 21 categories of citizen database “like bank account details, telephone records, passport data and vehicle registration details, will share data in real-time through the NATGRID with the 11 intelligence and investigative agencies.”

Cash is anonymous. Digital money is not.

15:12: Mobikwik announced that it is now accepted at 391 toll booths across India. Paytm has 40.

15:11: Avinash Raghava writes about how UPI has missed the demonetization opportunity, and why wallets are winning.

15:05: Meanwhile, the Sensex is doing all right today:
sensex-2016-11-25-at-3-04-58-pm

Although the last three months haven’t been that great.

sensex-3-months-2016-11-25-at-3-05-25-pm

13:35:

13:24: From Scoopwhoop:

““Modi thought it was a coup, a surgical strike against the Opposition. His bank nationalisation and privy purse moment like Mrs Indira Gandhi. From suit boot ki Sarkar he was recasting himself as the protector of the poor and the scourge of black money”. Adds the (BJP) leader, “as usual Modi got carried away by his own hype. He thinks he’s larger than life. Mrs Gandhi confined suffering to the princes and those affected by bank nationalisation, Modi has ensured the poor suffer”.

12:53: So if you were RBI Governor Urjit Patel, what would you? Tell us what you think. email: nikhil@medianama.com.
Some answers from Twitter:
– Sukhdeep Singh says “publish a post with current situation, what is plan and confirm if things are under control or in mess. Be transparent.”
– “Blame the government before they blame me”- says Ashwani
From Raju Rao: “emulate , at least in being communicative with the public and explain what is happenning”
– ‘”I would stop signing my name under “I promise to pay…” just in case something new suddenly happens”‘, says Firas Durri.
– Beatles song recommendations for Urjit Patel from Apar Gupta (Let it be) and Meghnad (With a little help from my friends)
– ‘”shut myself up in an anonymous apartment & bingwatch all shows on Netflix. Order food using Zomato under the name: “Raghuram Rajan”‘ says Meghnad. Zomato is a popular choice here.
– Abscond, says Zeeshan Mhaskar , Hide says Anand
– Resign say Junaid, Sherlock, Madhu Menon and Bobin James
– Call Raghuram Rajan, say Shibesh, @sagarDeoskar, @VcVindaloo and Biswarup Gooptu
– Find someone to blame, says Gaurav
– Change Name to Varjit Patel (I didn’t get this one), says Nirav Shah
– Grow a pair and look for my spine, says Fifi
– Hibernate, says Sandeep Kaul . Hide under the bed till December 30th, says Mahesh Murthy
– Eat some of the spare Rs 1000 notes lying around, says Ammar
– Party, saying there’s no problem, says Kushaldas. To which, Jugal Mody helpfully adds, in a very Wolf of Wall Street (Wolf of Dalal Street?) kind of way… :Champagne, cocaine, tub filled with R10 coins + champagne, bikini-clad hiphop leddis, 2000 notes flying, Kanye West, paneer tikka
 KN Ajit Narayan says “Quietly focus on fixing the challenges. And publicly air my independent views post the 50-day period. If not allowed, offer to quit.”
Annie Zaidi: take responsibility for this mess, tell the truth about consequences and resign immediately

Last, but not the least:

12:41: Meghnad has all the dope from Parliament. Do go to his twitter feed to read his updates. Lok Sabha has been adjourned till Monday:

12:39: This is such a disaster. if we weren’t a largely submissive country, by now, there would have been a revolution.

12:33: The problem with issuing definitive statements is that, well, the Internet remembers.

12:30: Sanjay Sipahimalani has published a series of tweets, recapping demonetization notificaitons as in-flight notifications. Bumpy ride indeed.

10:33: This is facetious from Nirmala Sitharaman, who asks “where are the economists who said India was going to do very well, before demonetization?”

anyway, there are economists now who are saying this is all messed up. Here’s an incomplete list:

    1. Raghuram Rajan: much before demonetization was announced.
    2. Larry Summers on his blog.
    3. Jean Drèze in The Economic Times
    4. Ajay Shah (NIPFP) in Mint
    5. Kenneth Rogoff, the author of The Curse of Cash, on demonetization
    6. Amit Bhaduri: in the Caravan.

10:23: Not really the best way to do de-urbanization, but migrant workers at railway and bus stations are going home.

10:18: Tweet your favorite memes to me at @nixxin.

10:15: #pwned

10:11: A conversation at a get-together in Delhi yesterday, and a friend of mine said that shit will really hit the fan when salaries have to be paid on the 7th of December. Many get their salaries in cash. Even if they get paid via digital, many will rush to withdraw cash. The banks should brace for impact. If you’re a business, hope you’re prepared.

10:10: If there was one article that I would suggest that you read, about possible implications of demonetization, it is this one from Devangshu Dutta, about what happened when the Soviet Union removed 10-11% of its currency from circulation. Remember that India has removed 86%. Now you can facepalm.

10:06: This is whole “removing black money from the system” plan is going really well so far:

10:04:

The Banking industry in India has kept screwing up on something as basic as payment gateways over the years. It’s not prepared, but this shock should force some scaling up.

9:59: Someone inform the Ministry of External Affairs (i.e. the PMO):

9:57: Bank branches in Delhi and Mumbai have run out of cash, reports The Economic Times.

9:54: The nationalist of the week award goes to…

9:50: Demonetization could cost 400,000 jobs, reports the Financial Express.

9:43:

This is just whataboutery. One entire tenure of corruption (and I’m not justifying that) doesn’t cancel out a screw-up that could send this country into recession. One doesn’t make the other better.

9:40: This would be a great thing to say on Mann ki baat, broadcast across the nation. I highly recommend it.

9.33: As @slackerninja would say, “Good morning dear”: Ratan Tata, after praising demonetization, probably picked up a newspaper and asked someone to draft a tweet to make him seem more, erm, empathetic, and probably tweet it for him. I mean, which self-respecting billionaire handles his own twitter account?

November 22nd:

November 25th:

9:26: Gujarat’s Jewelry making districts have been hit hard and are laying off people. Some have downed shutters. More in the Telegraph.

9.22: TWO VARIANTS of the 500 Rupee note? This is now a screw up of monumental proportions. ET quotes the RBI spokesperson as saying “It is likely that notes with printing defect has got released due to the current rush. However, people can freely accept such a note in transaction or return it to RBI.”

Yeah, but how will people know which is the correct version?

9:16: What a difference  (almost) a week makes. November 17th, Bihar Chief Minister Nitish Kumar is “all for demonetization“. November 24th: The JD (U) has published information alleging that the BJP bought lots of land “worth cores” just before demonetization.

Title contendor for “Flip-flopper of the month”, won’t you say?

Here’s the thing about “demonetization”: It doesn’t impact those who have assets bought using black money. It only impacts those who were left with the cash.

9:14: So after all that fanfare during the launch yesterday (and yes, quips about how much Paytm spends to keep the media running), the company has withdrawn its “App PoS” after security concerns were raised. More on all that here

November 24th

13: 51: Aditya Kshirsagar deconstructs on who owns the Narendra Modi app. Is it owned by the office of the Prime Minister or the government or is it owned by Modi as a private citizen and the BJP. Points put all the flaws in data collection and the privacy nightmare for users signing up.

You’ve to compulsorily give your phone number, district, city, interests, DoB, profession and interests. In between all of these mandatory questions is Voter ID. Mind you, the question is optional but the placement does not make it obvious.

Read more on his Medium post.

13: 28: All foreign trips cancelled. The Rupee falls to its lowest.

13: 16: Today is the last to use Rs 500 and Rs 1000 notes at the following places.

13: 09: Execution is everything guys.

12: 59: Oh totally possible. Why the hell not?

12: 50: Rs 21,000 crore were deposited in Jan Dhan Yojana accounts since the demonetisation. Dinesh Unnikrishnan of FirstPost investigates if there could be large scale money laundering through these accounts.

12:39: Wise words from our former Prime Minister.

11:01: More missing money. And this time from Bangalore. A van carrying bank notes worth Rs 1.37 crore went missing after a driver drove away. The van was found abandoned and Rs 45 lakh and a gun was left  behind. Details in The Times of India. 

10:28: In Assam, old notes worth Rs 3.5 crore were being flown into Nagaland which was seized by security personnel on a tip off from the Intelligence Bureau. But the notes seem to have vanished after some confusion between the Income tax officials and security personnel. Read the details from The Times of India.

10:06: The results of the prime minister’s survey are in. All is amazing. There is nothing wrong. Carry on with your work.

Here are the things which needed to be asked in the survey. Just a suggestion from the post-mortem.

The Quint has a more detailed report on the same.

9: 59: “What ostentation? Is that something to do with bones or something?,” asked the groom.

9: 50: In Maharashtra, chief minister Devendra Fadnavis has asked private hospitals to cooperate with the patients seeking urgent medical attention and accept the old higher value notes. Read details at Indian Express.

9:35: The New Indian Express details how people will be able to launder black money through over drafts and NRI accounts. The publication spoke to various business men where they would open overdrafts and close the same after two weeks saying that receivables were paid in cash and convert black money.

9:30: The Opposition in Parliament is demanding that co-operative banks be let to exchange notes. Seems like a reasonable plea.

November 23rd

17:45: Sunil Jain, managing editor of the Financial Express, raises an important question.

 

16: 45: Well Godwin’s law had to be Modi-fied for the demonetization.

16:40: With the demonetization in swing, Airtel has struck first blood and has launched its payments bank in pilot mode in Rajasthan. Although it seems a little half-baked at the moment as customers don’t even have debit cards, it remains to be seen how it will pan out. Read our report here.

Meanwhile, a report emerged that Paytm is withdrawing its payments bank licence. A spokesperson for the company vehemently denied what was said in the report.

16: 32: Bloomberg has some worrying statistics regarding the ATM penetration in India. This is dreadful again.

13:42: We missed this earlier. A Deccan Chronicle report points out that there are some brokers who are selling photocopies of Aadhaar submitted for getting a mobile SIM or other services. These brokers furnish the photocopied ID card to people who they pay to stand in queues at banks to exchange the currency. Details here.

12:30: A petition in the Madras High Court took objection to the centre using the Devanagari script on the Rs 2000 notes as it violates the Official Languages Act, 1963. The petitioner also called on the court to declare the notes as invalid. The court, however, rejected the government’s counsel who said that it was a “design feature”. Read more here.

12:06: Updates from last night. Naxal supporters were arrested with old Rs 500 and Rs 1000 notes in Telangana.

11:56: Union minister DV  Sadananda Gowda faced the problems of the demonetiztion first hand as a hospital in Mangalore refused payment in old Rs 500 and Rs 1000 notes for the release of his brother’s body. The minister then paid the amount by cheque. He also added the he would order an inquiry into the matter.

“If hospitals don’t accept old notes, then I can understand how much patients will suffer. I will decide what action to take, based on their written refusal to accept the banned notes from me”

Read full report here from NDTV.

11: 39: India has signed a declaration with Switzerland which will end the Swiss bank secrecy and allowing automatic exchange of financial information between the two countries. The hope among people that demonetization is just the starting step for cracking down on black money and corruption will get more credence with such moves. Read details here.

11: 30: Hmmm another committee? I thought that wasn’t your thing.

10: 53: Certainly a great move to help with cash shortage. You can tell your local medicine shop owner to stop charging an extra 2% on card payments. Also read our story on POS terminal penetration and how the split between interchange fee affects their spread. 

10: 47: The Kerala Assembly has passed a resolution asking the centre to remove its restriction on cooperative banks exchanging old Rs 500 and Rs 1,000 notes. This would certainly help the current cash crunch as people in rural areas would be more comfortable visiting a cooperative bank and the penetration of scheduled banks is quite low. Read the details at Scroll.in.

10: 44: The railways need to waive the service charges on digital transactions. Period. There needs to be parity between cash and digital transactions.

10:12:  IMPORTANT: The limit for wallets has been increased to Rs 20,000. And there are some changes for merchants as well:

– Merchants will have to give a self-declaration of their status as a merchant. In addition, they will give details of their bank account which will be kept by the wallet issuer.
– Merchant fund transfers to bank account from their wallet will not exceed Rs 50,000

More here.

 

9:45: There is tone-deaf, and then there is this. If I may coin a phrase here, this is a head-and-ass-in-the-sand kind of piece, which asks, “Are the poor really suffering?”

The authors ought to watch this video.

9:40: We missed this earlier: Exceptions it seems were carved out for tea estate workers in Assam, where . This from a PIB press release:

“…the state government got special permission to withdraw sufficient money to pay for the tea garden workers in cooperation with the private tea companies. The companies were asked to deposit their cheque in the state government account and equal amount was withdrawn by the state government and facilitated the uninterrupted disbursal of wages to the workers.”

9:27: We’re going to also surface some of our old work through the day. Two new key modes of digital payments are wallets and UPI. The UPI is run by NPCI, which is a bank led corporation. It’s remarkably simple (I’ve tried it), and is like an inter-bank money transfer system, and allows you to use services which are independent of the bank. It is bank-account-to-bank-account transfer. Wallets, on the other hand, largely allow payments between users who are not a part of the banking system. The UPI should allow banks to link to them, in order to make payments from wallets to bank accounts (and vice versa), and between wallets (which are not interoperable). But what does the NPCI do? Launches UPI and doesn’t allow banks to connect with them, because “Banks need time to catch up with wallets”. Read our interview with AP Hota, NPCI MD and CEO, from May this year: Part 1, and Part 2.
November 22

18: 48: I think someone needs to alert the authorities about this. An online service called Bookmychotu is letting people hire a helper to stand in queues in front of banks and ATMs to withdraw money.

18: 35: The Times of India reports fake Rs 2000 notes are in circulation in Chikkamagaluru, Karnataka! How did dastardly fiends get away with such a heinous crime? Well, they photocopied the Rs 2000 note. That’s it. We expect more reports such as this in the coming days.

That said, readers would be better educating themselves about the new notes and its features. There is a lot of information asymmetry at the moment. Better not to get burnt.

Meanwhile, I was reminded of this beautiful scene from the TV show The Wire where a couple of  junkies run a similar con:

18: 27: The Internet Freedom Foundation has sent a legal notice to Indore’s District Collector asking him to withdraw his recent order banning “misleading and objectionable” posts on social media related to demonetisation.

We have asked the District Collector to rescind the order and publish a copy of the withdrawal order on the Internet. Apart from this we have suggested that the District Collector use social media platforms to dispel rumours, as was done, for example, by the Bengaluru Police during the Cauvery water agitation a couple of months ago.

Read more here.

More updates from Shashidhar again. 

15:29: Minister of State for communications Manoj Sinha says that telecom operators have decided to waive USSD charges for mobile payments. Frankly, these charges should be paid by banks anyway, if they want parity between cash and digital payments.

14:53: Well at least someone is having fun…

14:47: This is going to further exacerbate issues: Traders in Kerala are shutting shop in protest, reports The News Minute.

14:43: Hi It’s Nikhil, taking over from Shashi. Looks like all that talk about “security features” was hogwash. ANI reports that terrorists have been caught with Rs 2000 rupee notes in Jammu & Kashmir.

13: 20: Reminds me of the Indulgence certificates the Catholic Church used to give to absolve a person’s sins. You might even get a discount in this one.

12: 27: Damnit. The only Coldplay song that I really liked is ruined.

Here’s the song that most of our younger readers would not be familiar with

Just hope this part of the lyrics don’t come true: So I’m gonna buy a gun and start a war. If you can tell me something worth fighting for

12: 07: Prime Minister Narendra Modi is taking a survey on his decision to remove Rs 500 and Rs 1000 notes from circulation. You can take the survey from the official Narendra Modi app. However, we aren’t too impressed by the quality of the questions on the survey.

For example, the first two questions are whether Indians think that there is black money in India and whether we need to fight corruption and black money. Both are truisms and there is no one who will disagree to this. More granular questions on the implementation is needed.

Take the survey with a pinch of salt as many of the questions may be designed for participants to agree with the decision. To explain this, watch this scene from the British TV comedy Yes, Prime Minister:

11: 56: Technology lawyer Mishi Choudhary has an important point on surveillance.

11:47: Reports coming in from Muzaffarnagar as farmers are protesting outside a bank branch over cash crunch.

11: 30: Business Standard reports that 75,000 ATMs in the country have been recalibrated. There are currently 202,801 ATMs in the country. The task force headed by deputy governor SS Mundra have a mammoth task ahead of them. Read here.

10: 35: Watch an NDTV report on how Chennai Tricolour is helping the bank officials during the demonetization by assisting queues and providing information.

10:21: The Gujarat Cooperative Milk Marketing Federation (GCMMF), which operates the Amul Brand for milk products, said that it will be opening bank accounts for producers who do not have them. It added 60% of payments are done through bank account transfers and is in the process increasing it. The Press Trust of India reports.

10: 12: Updates from the government and the Reserve Bank of India (RBI). The central bank allowed banks, non-banking financial companies (NBFCs) including micro financial institutions (MFIs) and district central co-operative banks (DCCBs) to retain ‘standard’ asset classification on loans up to Rs 1 crore for another 60 days. These would be otherwise classified as non-performing assets (NPAs). This will apply to home, agriculture and working capital loans among others and dues payable between November 1 and December 31. Read the RBI order here.

10: 08: The tables have been turned.

9: 56: The Arthakranti Pratishthan, the Pune-based think tank which claims credit for pitching the idea of removing high value notes to the prime minister, is not happy with the current demonetization drive. “The Rs 500 and Rs 1,000 currencies account for close to 85% of notes in circulation… If you ban the entire lot in one go, how you will manage the flow of currencies?” , Anil Bokil, founder of Arthakranti told the Economic Times. “They’ve lost the transition plot completely. They should’ve stuck to our transition plan at least,” he added.

9: 43: Trying to withdraw money from an ATM? Good luck. Tinu Cherian Abraham tried 23 machines in Bangalore and still no luck.

9:14: A few days old, but this video from the Wire in Narela indicates that people are divided over demonetization:

9:07: In Bloomberg, blockchain engineer Elaine Lou says that the war against cash is misguided. “Crime creates demand for physical money, not the other way around”. Read it here.

9:01: Former US Treasury Secretary Larry Summers, along with Natasha Sarin, a PHD from Harvard University, on demonetization (while recommending phasing out high denomination notes):

Most free societies would rather let several criminals go free than convict an innocent man. In the same way, for the government to expropriate from even a few innocent victims who, for one reason or another, do not manage to convert their money is highly problematic. Moreover, the definition of what is illegal or corrupt is open to debate given commercial practices that have prevailed in India for a long time.

8:55: In Uttar Pradesh’s district of Deoria, a senior citizen died in a stampede outside a bank. More in The Hindustan Times

8:50: 17 rollbacks so far, says Trinamool MP Derek O’Brien:

8:03: High security? Rs 4 lakh in fake currency notes seized in Orissa

7:20: More brutality from the Police

7:17: Baba Sehgal has done a…erm… music video on demonetization.

7:07: There’s been a lot of talk about fake news in the US, post the Trump election. We should probably do a Fake Whatsapp Forward of the day series. Make sure you check out the last screenshot, which gives it all away.

7:05: IndiaSpend has analysed RBI data: Deposits are five times as large as withdrawals. This shouldn’t surprise us, though, with the withdrawal limits.

7:03: In more sobering news, Bloomberg Quint went to Sassoon docks to speak with people at a fish market about how they’re dealing with it. Fewer people selling fish, people being sent back because of old notes. Watch the video

7:00: Start your demonetized Tuesday with the Quint, which has spoof Shah Rukh Khan movie posters/names with a demonetization context. Not very funny, though. Didn’t LOL at even one of them.

November 21 (Updated by Nikhil Pahwa today. Tweet the best reads and opinions to me here, and to Shashidhar here)

21:18: I really don’t know what to say:

20:17: Lol. Google translation needs work.

20:09: The question being asked (here and here) about the update below (about marriages), and rightly so, is how do you prove that someone doesn’t have a bank account?

19:40: Any of you getting married? The RBI has finally published rules for withdrawing Rs 250,000 in cash. Details here. Some excerpts:
– Withdrawals can be made by either of the parents or the person getting married. (Only one of them will be permitted to withdraw).
– Since the amount proposed to be withdrawn is meant to be used for cash disbursements, it has to be established that the persons for whom the payment is proposed to be made do not have a bank account. (Edit: this pretty much screws things up for people looking to withdraw money).

The following documents are required:
This form

– Evidence of the wedding, including the invitation card, copies of receipts for advance payments already made, such as Marriage hall booking, advance payments to caterers, etc.
– A detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account. The list should indicate the purpose for which the proposed payments are being made

19:38: I don’t know about you folks, but I’m sitting down, not standing:

19:35: Updates from the RBI:

“i. For farmers
Farmers may be allowed to draw upto ₹ 25000/- per week in cash from their loan (including Kisan Credit Card limit) or deposit accounts subject to their accounts being compliant with the extant KYC norms.

ii. For traders registered with APMC markets / mandis
At present all current account holders are allowed to withdraw, in cash, ₹ 50,000/- in a week from their current account subject to certain terms and conditions and the same is being now extended to the traders registered with APMC markets/mandis. Such traders will be permitted to draw up to ₹ 50,000/- from their current accounts provided that such accounts are compliant with the extant KYC norms and are operational for the last three months or more.

19:33: A bank in Meerut ran out of money, and locals weren’t very happy:

19:30: Over Rs 1 crore in (supposedly useless) Rs 1000 / Rs 500 currency notes have been stolen from a bank in Odisha. Mint has the details.

17:57: Farmers can now buy seeds with old Rs 500 notes. The government has allowed “farmers to purchase seeds with the old high denomination bank notes of Rs.500 from the Centres, Units or Outlets belonging to the Central or State Governments, Public Sector Undertakings, National or State Seeds Corporations, Central or State Agricultural Universities and the Indian Council of Agricultural Research (ICAR), on production of proof of identity.”

17:47: “Others are thronging jewelry stores and designer boutiques, carrying suitcases of banned currency notes, begging to buy something with backdated receipts.” Fun stuff from the New York Times.

16:47: This just in from Mobikwik: it has seen a 400% increase in transactions across Gujarat, especially from Ahmedabad, Vadodara and Surat, and merchants like “Big Bazaar, Croma, Pantaloons, Big Basket, Food Panda and Grofers and “seen significant increase in transaction volumes”. Around 10% of Mobikwik’s user base is from Gujarat.  “MobiKwik also has a cash pick up service in Surat and plans to launch the same in Ahmedabad by next year.”

16:40: Daily wage earners are skipped a meal a day, reports Business Standard.

16:28: In an “how black money is being spent” update:

16:07: She has probably recently completed sensitivity training:

15:58: The Bank officers union has called for the resignation of new RBI Governor Urjit Patel.

15:43: We missed this earlier: Scroll.in has a story which details how Chartered Accountants are converting black money into white, but are struggling to convert all of it into white. Read the post here.

13:45: Here’s Meghnad, who works with MP Tathagata Sathpathy, tweeting about withdrawing money from an ATM in Parliament. Click on the tweet to read the series of tweets.

13:35: ICRIER’s Ashok Gulati has more ideas: “It is time that BJP-ruled states take the lead in announcing that commission agents in all agri-mandis must have EDC machines (Electronic Data Capture machines, used to swipe credit/debit cards) compulsorily and transactions should be only through these machines, else their licences will be cancelled.”

13:05: It’s not like digital payments don’t have their challenges

13:01: How is demonetization impacting remittance businesses which labourers often use to send cash home, across state lines? MoneyOnMobile CEO Harold Montgomery says:
“it’s made it harder for our agents to deposit their own operating cash. At the same time, it provides an opportunity for them to help consumers transfer money into bank accounts and digital payment means and avoid long lines at banks”…”Now, the longer-term affect could more consumers willing to put money into digital wallets and performing digital transactions themselves as they understand now that cash is a difficult medium to transact.” More on this in our report here.

There is still no clarity from the Reserve Bank of India (RBI) regarding cash loading with old denominations in digital wallets and wallets which offer money transfer service.

12:33: This is hilarious!

12:29: Any of you getting married in the next few weeks? There’s a documentary to be made on “Marriage in the times of demonetization”.

12:26: Meanwhile, you can use Paytm at toll plazas now, it seems. I don’t know about you, but I think that would really slow down clearances at toll plazas. RFID tags are better.

12:24: You’ll see more QR codes in stores now. Mastercard is rolling out its QR code platform in India. Meanwhile, Paytm CEO Vijay Shekhar Sharma, had told us a couple of months ago about why Paytm is going down the QR code path:

Consumer has a dumb device called card, and what merchants carry is a smart device called POS with Internet connection. So, we are changing that structure. We are saying that merchant will not have a smart device or Internet connection, and consumer will have that. So payment happens via a QR code and the processing happens on the consumer side.

11:54: The Attorney General Mukul Rohatgi told The Supreme Court that “demonetisation would take its legal form once the RBI Act is amended, in due course, after the last date for exchange of old notes is over, so as to make it an offence to keep the illegal tender.” More on the court arguments in The Wire.

11:53: It isn’t that money laundering has ended, or that black money isn’t being exchanged. Times of India reports that two Tamil Nadu state corporation staffers were caught laundering money, for a 20-30% commission.

11:51: Ankur Bhardwaj from The Economic Times went to a village in Uttar Pradesh to speak with villagers supporting demonetization. The story ends with: “It is not economics that makes them stand with “Modiji” – it’s jealousy, patriotism, and at times rank ignorance

11:46: Anyone has an answer to this question? You go to jail if you don’t have the cash, right?

Btw, have traffic cops stopped taking bribes?

11:45: This is from yesterday:

11:42: Some men are more equal than others. State Bank of India’s Rajya Sabha and Lok Sabha secretariats have been asked to make Rs 5 crore available in cash by November 21st (today), to pay advanced salary to their staffers. Meanwhile, queues continue outside bank branches for many.

11:40: Callers to Maharshtra’s emergency ambulance services helpline are complaining about pharmacies and hospitals not accepting cash. Read about it here.

11:36: In Mint, its Executive Editor Anil Padmanabhan writes about the political fallout of demonetization. Lets face it: no one has a clear idea of how this will play out

While the economists can slug it out on the impact on the Indian economy, it has undeniably left a feel-good moment with most Indians—precisely because, in popular perception, the corrupt and the elite are at the receiving end. Probably why, despite the provocations from some political parties, we have, so far, not seen things descend to chaos as people queue up outside banks to withdraw cash.

But every political action has its consequences. In this case, the trader class, particularly among jewellers, who normally conduct their business in cash, have been severely hit. They have also been a constant factor backing the BJP. They are unlikely to forgive Modi or the BJP very soon.

Read it here.

11:34: Kenneth S Rogoff, the author of The Curse of Cash and Cabot Professor of Public Policy and Professor of Economics at Harvard University, writes on why cash ought to be eliminated, but gradually.

11:30: Mint spoke with the person (of Arthakranti Pratishthan who gave PM Narendra Modi the idea of demonetization: “We have proposed compressing the currency so much that the Rs50 note becomes the highest denomination in circulation”…”We are not saying we go completely cashless. Some cash will have to be there, but we need to set the bar at Rs50. For a country like us where 70% of the population survives on just $2 per day, why do we need currency notes upwards of Rs100?”

11:24: BJP politician Uma Bharti, aside from talking about Clean Ganga and the Ram Mandir, talks about demonetization as a Marxist idea (which she supports). In the Economic Times.

11:21: Reuters has quotes from businesses about how they’re being impacted (read it here):

“Sales at Somani’s aluminium foil maker, Rockdude Impex, have fallen by roughly a quarter in the past week, and the cash shortage that followed the “demonetisation” drive has left his supply chain in tatters: his trucks are stranded with no money for fuel, workers won’t load goods for free, and distributors can’t pay up”…”but fixed costs continue, including wages. These are paid online, but his staff cannot get access without being given time off to queue at the bank.”

11:15: How will demonetization impact the relationship between the center and the states?

11:12: Anupam Gupta writes in favor of institutional reforms as opposed to shock therapy.

“Reform that results in the overhaul of the machinery that supports corruption and bribes that breed the black economy? Reform of taxation to make paying taxes an easier and a better alternative than hiding them?”

Read it here in Scroll.

11:10: 70% of the value of rupees was in circulation

10:42: “If you want to encourage digital transaction, you must make it cheaper and cash transactions costlier. You must say customer has to pay for each cash transaction and digital transaction should be free. Government made cash transaction free and digital transaction costlier. You’re discouraging digital. And now only you have made it free.”

Dr. KC Chakrabarty, former deputy governor of the Reserve Bank of India is scathing in his remarks on demonetization, also saying. “There’s no benefit to the economy”…”If a person is not paying tax, then it’s black. If a person is not paying tax, that person has to be tackled. You’re after innocent people. There’s no logic in that”

A MUST READ, so read it here

10:33: The Times of India, catering to all types, as usual, tells us that Online Astrologers got more business after notes ban. I know you’re going to click on this link. You are. No one is watching. You can do it. Go on. Click it. You want to. No one is judging you. (Gotcha!)

10:30: In the Guardian, a piece on why we should fear a cashless economy. It’s from March 2016, but is being shared widely now:

“In Japan, the central bank has imposed negative rates and you are charged by banks to store money. This is to try and goad people into spending, rather than saving. So much cash has been withdrawn from banks that there are now reports that the country has sold out of safes.
These are all quite legitimate reasons to want to exit the system. I’m not saying we should all take our money out of the bank, but that we should all have the option to. Cash gives you that option. Why remove it? It’s our money. Not the banks’.”

10:26: Amit Varma doesn’t have nice things to say about Demonetization. In a Sunday Times of India column, he points towards unintended consequences Mao’s great leap forward, before giving four reasons for why this move isn’t an attack against black money and corruption. Read his column here.

10:00: What next? Twitter user V. Vinay points us towards a potentially scary development. Pune based think-tank Arthakranti Pratishthan, in a November 10th update had said about the new currency notes:

*These new notes are just a stand-by or stop-gap adjustment and can be demonetized /  withdrawn after a smooth transition from current cash-based, non-transparent system to a well-banked, transparent economy.”

9:50: We’re back, kinda hoping for a fresh start, and for things to get better from here on, with this new liveblog. No day like Monday to start afresh. I love Mondays, don’t you? I’m unnecessarily cheerful on Mondays, I’m told. Today’s going to be a great day. The best. The absolute best. We’ll have the best updates for you. The best. (<– Donald Trump impression, in case you missed it)

Hope you did your patriotic duty and spent your weekend in a bank queue. I’m kidding. Anyway, in case you were wondering, this is Nikhil and I’ll be serving up the updates for you today…copy-pasting tweets and videos, while Shashidhar does some real work.

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Demonetization updates till November 19th 2016 are here.