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December 2nd (Updates from Nikhil today (@nixxin, should you need to reach me). Shashi needs a break.)

17:42: Audit firm KPMG has a report on how people will be to launder money despite the demonetization move. This is not a guide on how to go about it.

17:32: Don’t know about you friend, but we’re not optimistic.

17:28: Another death in UP as a son could not get treatment for his mother as banks are rationing cash. What’s the count again?

15:36: Reminder! Today is the last day for people to use old Rs 500 notes at petrol pumps.

15:32: Javed Anwer argues that the need of the hour for the government is to bring in a strong privacy and user data law. But let’s hope the government doesn’t push it through like it did with the Aadhaar Act. Details at DailyO.

15:19: DailyHunt has done a dipstick survey regarding people’s support for the demonetization. The support for the move was strong in Maharashtra, Karnataka, West Bengal. The least support coming from Kerala and Tamil Nadu.

15:00: Remember the Madras HC court case on the Devanagari script on Rs 2000 note? The RBI needs to file a counter.

14:57: ….. and then there was the Rs 2000 note. And all was cashless. Thus spake Prime Minister Modi

14:51: So what’s the count now? An infant dies in a mother’s arms in Bihar as she kept waiting in line to withdraw money from a bank branch. When rushed to a medical centre, a doctor said that the infant died due to suffocation. Meanwhile, a hospital did not release the body of person as a family was unable to get new Rs 500 notes. Read the sorry details from the New Indian Express. 

14:44: Queues lining up at ATMs and branches on salary day.

14:41: All works of tender of Indian Railways will be on an e-platform by December 31st.

1:42: Make in India awardee making in India… fake currency notes, it would appears:

11:33: Telangana police caught a postmaster trying to convert Rs 12 lakhs for 15% commission. Initially wanted 30% it seems. What’s the going rate these days? (story in News18)

11:30: First they came for the gold…then the liquor.

11.24: The UIDAI is developing a mobile app that can be used by shopkeepers, merchants or individuals for receiving payments, wherein Aadhaar replaces the current PIN and password mechanism. More in the Times of India.

11.18: Nirmala Sitharaman tells Governance Now, on the Rabi crop: “till November 18, the acreage of wheat, pulses and oilseeds [in rabi] had increased substantially over last year’s corresponding period. These figures prove that the claims of those who are saying that ‘Oh, my god, farming has come to a standstill because of demonetisation’ are not true. On the basis of a system that involves reviewing the situation daily, exemptions have been given to farmers to use old currency.” Read the whole interview here.

11.11: Banks ran out of money yesterday, and pensioners had to stand in queue. News18 quotes multiple people asking, rhetorically, “Do you think I have black money?” Read it here.

11:10: Gold imports were high in November – the highest all year – which News18 suggests means that black money was converted into Gold. Read it here.

11:06: Niti Ayog CEO Amitabh Kant says that there’s a need to formalise India’s economy, and at the same time saying that “It’s revolutionary. It’s like John F Kennedy saying were going to put a man on the moon.” Not the right analogy, in my opinion.

11:02: Payday is here, and workers have to stand in queue to withdraw their money. Factory workers got money in cheques and old currency notes. Now they’re losing a days wage to get money they can use, writes Scroll. Read it here.

10.54: Just noticed in that Renault link that they’ve extended cashless payment options to Paytm, HDFC, Cheques, IMPS, NEFT etc.

10.46: We hope this doesn’t become a trend: Bajaj Auto (link) and Hero Motors (link) have both reported reduced sales. Remember that both are market leaders operating largely in small towns and villages. This may be a sign of things to come. Maruti (link) and Renault (link) sales are up, Honda sales are down (link). Remember that cars are relatively more expensive, so are more likely to be bought with loans. Payments, thus, would have been cashless in many cases already.

December 1st

16:28: Gold owners ahoy! The Amended I-T Act will not apply to tax jewellery/ gold purchased out of disclosed income or exempted income or reasonable household savings. It will also not apply to tax ancestral jewellery and gold, the ministry said. “There will be no seizure of gold jewellery up to 500 gm per married lady, 250 gm per unmarried lady and 100 gm per male in I-T searches,” the finance ministry said in a statement.

16:10: Meanwhile, the Indian Express reports the the Enforcement Directorate has been carrying out raids multiple hawala operators across the country who have operations to convert Rs 1000 and Rs 500 notes into white money. The ED carried out raids in Delhi, Mumbai, Kolkata, Hyderabad, Bengaluru, Ahmedabad, Chennai. Details from the Indian Express.

16:00: The Quint reports that JVR Arun, the BJP’s youth wing secretary was arrested with bundles of currency notes amounting to Rs 20.55 lakh. Most of them were new notes and denominations which are accepted.

15:38: Thinking of using your Paytm or any mobile wallet to pay for fuel? Think again and step away from the pump and then pay for fuel. The Economic Times has a report where petrol stations have been warning users not to use mobile phones close to fuel pumps as petrol fumes might get ignited static electricity from mobile phones radio waves. Yeah you’ve seen the signs in stations, but there is truth to it. Don’t believe me? Maybe this will help.

11:26: Demonetization should not come in the way of devotion.

11:06: More tales from the post-fact world of WhatsApp forwards:

10:58: Okay I need a break. Here’s Pink Floyd with Money. What? You thought I would stay off-topic?

10:54: Further gloom and doom.

10:44: More flip flops from the government.

10:17: Speaking on parallel currencies, Zimbabwe which is going through a period of hyper inflation, started using the US Dollar as currency. However, with the Dollar being devalued, a $100 bill is now worth $102. Go figure. Check out this Wall Street Journal report for more information.

10:09: The road transport and highways ministry has proposed to introduce high security coupons of denominations ranging from Rs 5 to Rs 100 to serve as currency for toll on national highways and for return as change to motorists after toll deduction.

Here is our editor Nikhil’s take on the fiasco.

Read the full report on Indian Express.

9:44: Stories on salary day blues:

NewsMinute reports that Andhra Pradesh and Telangana governments have asked banks to pay Rs 10,000 in cash to employees.

–  Hindustan Times reports on how bank branches in Delhi are suffering from an acute shortage of cash.

FirstPost reports that customers of public sector banks have been able to withdraw more money compared to their private sector counterparts.

9:37: Scroll paints a depressing picture in Bihar where cauliflower is selling at Rs 1 at mandis. Vegetable prices have tanked from when the demonetization was announced. Prices had stagnated as there was a lot of uncertainty since the move was announced. But it looks like normal demand and supply economics have started again.

Baingan (aubergine) fell from Rs 15 per kilo to Rs 2-Rs 3. Patta gobhi(lettuce) has slumped from Rs 15 per kilo to Rs 5. And saag (spinach) has dropped from Rs 10 to Rs 2.50 per kilo.

Full report in Scroll. in

9:30: Well this seems accurate.

9:20: Impatience is growing in Uttar Pradesh due to cash crunch as a mob resorted to stone pelting and burning effigies as banks said that they could not dispense cash. In Meerut, customers resorted to violence when a Syndicate Bank branch announced it was left with no cash to dispense. In Agra too, police had to use lathis to scatter an angry crowd outside a branch of Oriental Bank of Commerce. Times of India has the details.

November 30th

17:45: In a two-part series, MediaNama’s Salman SH takes a look at some permissions digital wallets take. Some of the apps can even read web bookmarks and senstive log information such as MAC ID, IMEI no, saved WiFi networks info

By collecting WiFi network information, including network name (SSID), an app developer can employ data analytics and identify a cluster of users connected to the same network. This allows the developer to determine that the cluster of users could be users in the same office/home/public location, according to security expert Akash  Mahajan.

Read the first part here.

17:39: Mint’s Vishwanath Nair argues that the RBI’s limits on Jan Dhan account withdrawals are discriminatory.

According to data available on the PMJDY website, as on 23 November, there are 256.8 million bank accounts under the scheme which was introduced in August 2014 as part of a financial inclusion drive launched by Prime Minister Narendra Modi. Among these, nearly 100 million accounts, or 39%, have been opened in urban areas.

This means that a Jan Dhan account holder in a city will be allowed to withdraw far lesser than the Rs24,000 per week allowed to other bank account holders, even though they have been standing in the same queue.

Read the full report here.

17:34: Toll collection on National Highways to resume from December 2 midnight.

17:31: State Bank of India says that 39,000 ATMS have been recalibrated. Will that be enough on salary day?

17:28: And now Parliament gets a dose of cashless India as well.

17:22: Kiran Bedi, the lieutenant governor of Puducherry wants to make government departments accept digital wallet payments . Question is which wallet?

13: 23: I am proud patriot. Is Doctor Strange still in cinemas for me to show love for my country?

13:13: As salary day arrives, banks have to brace for long lines for withdrawals. ABP News has an excellent report on how many transactions can take place in an ATM before being refilled.

12:51: Speaking of weddings, a temple in Odisha saw more than 22o couples tying the knot following the demonetization as more and more people opt for low cost weddings. Read more from The New Indian Express.

12:39:Delhi HC Dismisses Plea to Ease Wedding Withdrawal Limits

12:15: Meanwhile, Aditya Puri, CEO of HDFC Bank, says that economists are full of hogwash when it comes to the decline in GDP. In the long run, Puri feels that economy will benefit from the move. He also added that the worst is behind us in terms of long queues and inconvenience.

Errr, Mr Puri, I beg to  differ with you. I am a customer with your bank and I have been told by your bank emplyees many times that there is a shortage of cash and that they could only give a limited amount of cash.

Read the interview at Business Standard. (paywall)

11:48: ICYMI, you have to read Nikhil’s story on why it is difficult for India to go cashless. We simply do not have the infrastructure to handle over a billion people. Some of the highlights:

– The teledensity of mobile phones is concentrated in urban areas.
– The number of smart phones is still low compared to the population.
– There are not many active Internet users in India.
– Card acceptance networks in India is woeful. This is us being generous.
– There are further hurdles for merchants in terms of costs.
– The number of Internet shutdowns in the country.

Do read and let us know if you have a counterpoint to the piece. Email nikhil@medianama.com

11:38: Captain of business and chairman of the Godrej Group, Adi Godrej  has his doubts on India going cashless and expressed some concern about the lack of cash in the system. Godrej said that if within the next 2-3 weeks the government cannot make sure sufficient cash is not available, it should print notes abroad and bring them to India. But if cash is not available at an early date, he says “there will be a long damage to the economy.”

Read the full report on NDTV.

11:10: Prime Minister Narendra Modi attends Parliament while MPs debate the demonetization.


10: 59: More reports of money laundering. IANS news reports that employees of a college in Vijayawada received  messages about deposits and withdrawal of amounts from their bank accounts. The money was deposited into 43 accounts of the staff members.Police said Rs 20,000 to Rs 40,000 were deposited

Read the full report here.

10:56: ….. Alright then.

10:51: Owing to the increased number of instances of money laundering through Jan Dhan accounts, the RBI has placed withdrawal limits on them. Fully KYC accounts can withdraw Rs 10,000 in a month while non KYC accounts can withdraw Rs 5000. Read out report here.

10:45: Angry customers vandalized a State Bank of India branch in Manipur University two days ago as they were not able to withdraw Rs 24,000 weekly limit. The North East Today reports that bank officials only allowed customers to withdraw Rs 2000. Read the full report.

November 29th

16:25: The Lok Sabha passes the bill to amend the Income Tax Act.

15:41: Mamata Banerjee makes an important point.

14:18: Ecommerce marketplace Snapdeal will now bear all logistics and packaging costs for all cash on delivery orders (worth more than Rs 500) which have been returned by users in the week following demonetization (November 9th -15th)

Snapdeal, India’s largest marketplace, today announced additional measures to support its sellers, some of whom had Cash on Delivery (CoD) orders returned after the recent demonetization announcement. In its communication to sellers, Snapdeal informed that any such charges, which are in normal course, borne by the seller, will be paid for by Snapdeal.

14:10: Stories such as these only weaken our faith in the banking system and people would rather keep cash at hand.

14:07: An interesting theory:

12:15: ICYMI, the government has waived off central excise duty for POS machines and goods required for their manufacturing.

 11: 57:  A teenager in Madhya Pradesh was arrested for criticising the demonetization drive, prime minister Narendra Modi and chief minister Shivraj Singh Chouhan. Police registered an FIR under section 469 of Indian Penal Code (IPC) and 66C of Information Technology Act, 2000 against him at the cyber crime cell. Read the details at Hindustan Times.

Note the district collector of Indore has passed an order which forbids people from criticizing the demonetization. The Internet Freedom Foundation has sent a legal notice to the collector to withdraw his order.

11: 50: Three postal officials were booked by the police in Hyderabad for converting Rs 36 lakh from old bank notes to new ones without proper documentation. Details from PTI.

11:19: Reports coming in from Press Trust of India (PTI) which says Prime Minister Narendra Modi has asked all BJP members of Parliament and members of legislative assembly to submit their bank account details to Amit Shah.

10: 55: CNN Network 18 has a report which shows that some private bank employees are helping people who wish to launder black money by opening different accounts. The video shows an Axis Bank employee in Sonipat who is advising an undercover reporter to open multiple accounts and deposit Rs 2.5 lakh to avoid the tax radar. He further advises the undercover reporter not to use an Aadhaar card for opening the account as it can be traced by the government.

Watch the video here.

10:29: Updates on the number of notes exchanged.

  • From November 10, 2016 upto November 27, 2016 amounted to Rs 8,44,982 crore (exchange amounted to ₹ 33,948 crore and deposits amounted to Rs 8,11,033 crore).
  • The public have withdrawn, during this period, Rs 2,16,617 crore from their accounts either over the counter or through ATMs.

Source: The RBI 

10:19: ICYMI, the Reserve Bank of India has relaxed withdrawal limits, but has not specified from how much. The RBI found that people are hesitant to deposit monies considering the withdrawal limits.  We have been getting a lot reports that banks are rationing the amount of cash people can withdraw from an account. Personally, I visited an HDFC Bank branch and the bank officers there said that I was only allowed to withdraw Rs 4,000. The current weekly limit for cash withdrawal is Rs 24,000.

10:12: Reuters has a great fact box which has kept track of all the changes and announcements on the demonetization. Check it out here.

November 28th (updates from Shashidhar again) 

16:58: My thoughts exactly.

15:32: Death count attributed to the demonetization now stands at 82. Here is a list of all of the people including the reasons for death.

15: 25 Ground realities. Despite there being a Rs 24,000 weekly withdrawal limit, many banks including ICICI Bank and HDFC Bank are rationing how much people can withdraw in cash. ICICI Bank’s managing director and CEO avoided answering questions that cash was being rationed out to customers in a recent call with the press. Publically, most banks have gone on record that there is no need for panic and that there is ample amount of cash in bank branches.

14:48: Amendments to the Income Tax for undisclosed income and undeclared wealth.

 

12:46: White label ATMs are shut following the demonetization as banks are prioritising their own ATMs. The Economic Times reports that players have approached the RBI asking them to make sure cash is made available to them. Note that White label ATMs are supposed to source cash from commercial banks.

12:39: An interesting observation.

12: 37: Opposition in Parliament is growing.

12: 30: Former finance minister P Chidambaram talks about how he would have handled the demonetization process. He said that he would start with stopping printing Rs 1000 notes and gradually phase out Rs 500 notes over two years. In the mean time he would impose a banking cash transaction tax to keep track of high value transactions. Read full report at Financial Express.

11: 33: State Bank of India (SBI) chairman Arundhati Bhattacharya says that banks will find it hard to cut interest rates despite the the excess deposits following demonetization. This is due to the an RBI circular which says that banks have to maintain a 100% cash reserve ratio (CRR) from September 16, 2016 to November 11, 2016.

Translation for humans: The RBI has told banks that they cannot use the excess deposits in the banking system and has to reserve them 100%. It was widely believed that the excess deposits in the system would allow banks to cut interest rates on loans but the RBI has not allowed banks to touch this money.

Bhattacharya also added that the Reserve Bank of India will have to compensate banks for the 100% CRR.

10: 45: ICYMI, Prime Minister Modi called on small traders to start using digital methods of payments including wallets, UPI and debit cards.

“I want to tell my small merchant brothers and sisters, this is the chance for you to enter the digital world,” Modi said in his monthly radio address. “It’s correct that a 100 percent cashless society is not possible. But why don’t we make a beginning for a less-cash society in India? We can gradually move from a less-cash society to a cashless society,”

There are still some things the Prime Minister must consider if he wants citizens to move to completely digital. For starters:

Note that MediaNama is hosting an event  to discuss  the Impact of Internet Shutdowns in partnership with Facebook. Read details here.

10:35: More reports of protests across the country as political parties led by the Left. In Bihar, trains are being stopped.

10: 29: Protests against the demoentization in Tamil Nadu as DMK workers take to the streets.

10: 17: Read an interview with professor Arun Kumar from the Jawaharlal Nehru University (JNU) regarding the demonetization. Here is an excerpt:

Yes, black income, black money and black wealth, all three are different.

This is the common mistake that people make. They think the three are same. Black money is only one percent of your black wealth. So suppose you are completely successful in eliminating three lakh crore, you are only eliminating 1 percent of your black wealth and three percent of your black income.

10:10: Quartz puts the losses of the demonetization into perspective.

10: 07: The Hindu reports that Rs 20.55 lakh was seized by the police in Salem, Tamil Nadu. The money was being transported by a BJP functionary. The money was in denominations of Rs 2000 and Rs 100 notes. Read the report here.

9:57: Good morning. Shailendra Singh (Sequoia Capital), Kunal Shah (FreeCharge) and Amrish Rau (PayU) had an interesting discussion on debit card usage. Reminder, debit cards are going to be crucial for adoption of digital payments considering that they are the second largest payment instrument after cash with 755 million debit cards.