ThereAreNoSunglasses

American Resistance To Empire

Indian Banks Recall Large Denomination Bills In Fight Against “Black Money”

[There is a strong possibility that President Trump might follow India’s example and eliminate the $100 bill, forcing all of those black marketeers, thieves, cheats and hoarders to cash in their stashed loot, and pay the taxes that they have been avoiding.]

Banks go on a war footing to replace notes

The Hindu

Bankers said they will replace the present series notes in banks and automated teller machines on Wednesday due to which they will remain closed for public transactions.

Banks are going on a war footing to exchange all notes of Rs.500 and Rs. 1,000 denomination from Wednesday.

Bankers said they will replace the present series notes in banks and automated teller machines on Wednesday due to which they will remain closed for public transactions.

There will be no liquidity disruption in the markets that are regulated by the RBI such as bond and foreign exchange markets, Urjit Patel, Governor, Reserve Bank of India told the media.

“We have just now been advised by the government to demonetise current series of Rs. 1,000 and Rs. 500,” said Arundhati Bhattacharya, Chairman, State Bank of India. “We have handled demonetisation earlier and will do so again. (On Wednesday), banks will remain closed in order to withdraw these notes from counters and ATMs. We will strive to restock ATMs at the earliest and make them operational,” she said, adding that SBI will work round-the-clock to ensure that customer service is not disrupted.

RBI Deputy Governor R. Gandhi said banks will be opening additional counters for currency exchange and requested lenders to extend banking hours.

While bankers welcomed the move, they also said there could be logistical challenges in implementation.

“It is perhaps the most significant move ever taken to curtail the parallel economy. This move will give a sharp boost to all formal channels of payment which in turn will help the formal economy to grow,” said Ms. Chanda Kochhar, MD and CEO, ICICI Bank.

Short-term pain

“Any big move will have some degree of short-term pain, which has to happen, you cannot do anything without that,” said Keki Mistry, Vice Chairman, HDFC Ltd.

“The move is hugely beneficial from a GDP perspective and also for reducing inflation,” he added. The government has also said the step will also reduce inflation, he said.

The government said the proportion of high denomination currency notes had gone up sharply over the years.

The proportion of high denomination notes, that is Rs.500 and Rs.1,000, in terms of value had gone up to as high as 86 per cent from 69 per cent in 2007. “High denomination notes are most convenient for criminals, for people hoarding large amounts of unaccounted money and for terrorists,” the government said.

Advertisements
%d bloggers like this: