500 & 1000 rs notes stopped from tonight

[Tibarn]

I hope everyone realizes that people die during elections waiting in line to vote, that doesn't invalidate democracy as a form of government or voting as a method of government selection...

 

 

[G_B_]

46 minutes ago, BeautifulGame said:

Just curious.On what basis the NPA crisis is over ?

Jump in government revenues (pumping money into the banking sector)  + Increase in deposits ------> better balance sheet.

 

 

[moniker]

I hope everyone realizes that people die during elections waiting in line to vote, that doesn't invalidate democracy as a form of government or voting as a method of government selection...

 

 

You don't have to vote to bring bread to your family. These people are being forced to wait in lines to sustain their livelihoods. Cannot be compared to elections where you can choose to not exercise your right to vote.

I personally welcome this demonetization move wholeheartedly but feel that it could have been implemented better keeping our heavily cash based economy in mind.

[BeautifulGame]

Jump in government revenues (pumping money into the banking sector)  + Increase in deposits ------> better balance sheet.

 

 

It doesn't affect or change NPA situation much really imo

Also let's not forget the demonetization(paying staff overtime , Atm part replacements ,etc) have cost banks in total of more than 35000. Cores .

[mishra]

Btw , Anyone knows if the money caught at Delhi law firm belong to some close affiliate of some political party. It cant belong to just a lawyer?

I was really mad to see Congress spokeman Mr BL Punia speaking on demonetisation and questioning RBI , he used to be charge Rs 10 lakh per signature when he was heanding environment department. If you raid this guy, i can guarantee just diamond worth several crore will be caught in his possessions

Edited December 11, 2016 by mishra

[BeautifulGame]

Why cash crunch in PSBs(Public Sector Banks) in Tamilnadu?:

Please read this:

Tamilnadu has about 9000 branches in public sector (PSBs)and about 900 branches in private sector (about 10%of PSBs). Of which ICICI has 402 branches, AXIS has 200 branches and HDFC has 270 branches.

After 8th Novemeber, 2016 till a couple of days back, RBI gave these three banks alone having only 872 branches Rs.6100 crore new currency pbut to all the PSBs having 9000 branches were given only Rs.7800 crore.

- i.e Rs. 7.5 crore per branch to the said three private banks and only Rs. 85 lakh 😳per branch to the pPSBs.

On reading the above post, the question that ran in everyone's mind is how the RBI could become so heartless to expose the staff of PSBs to pubic ire due to huge shortage of cash.

It is an irony that banks (the three banks) whose customers have multiple plastic cards, net banking, mobile banking, mobile wallets etc received Rs. 7.5 crore per branch while the PSBs whose majority customers, majority are comman men, who do not have any such facility, received only Rs.85 lakh per branch from 9th November, 2016 till a couple of days back..

In the process, not only the customers of PSBs suffered but also the staff who faced the ire of the public, sometimes reaching life threatening proportion.

As a result, police has to be deployed at many places costing the dear money of the exchequer.

Also the ATMs of PSBs run dry soon forcing people to use the ATMs of these three banks and make the customers of PSBs pay more.

Why are the so called supportes of common public in the issue of demonitisation not protesting to Govt. or RBI and why should the politicians & media keep quiet against this loot by private banks enabled by RBI?.

This msg have been doing the rounds in social media .Considering that huge stacks of new currency have been recovered in TN (Coimbatore and Vellore) and private banks being raided by IT recently , you have to ask serious questions about the way govt and RBI gone about it , if true .

[G_B_]

7 minutes ago, BeautifulGame said:

It doesn't affect or change NPA situation much really imo

Also let's not forget the demonetization(paying staff overtime , Atm part replacements ,etc) have cost banks in total of more than 35000. Cores .

The issue was the lack of lending as banks wanted to firm up their balance sheets. This meant rate cuts were not passed on even if RBI cut the interbank lending rate. Dr Rajan already made the banks keep money aside to account for NPA's.

 

35,000 is a small price to pay. The bond yields of the government have fallen since demon which means that our debt can be refinanced at a much cheaper rate saving much more. That is a tangible benefit nobody can deny. A big chunk of the federal budge goes in refinancing debt. 

 

Not to mention with 1% of Indians actually paying direct taxes, this move has probably caused many more to pay taxes who show proof of lifestyle. Lets wait for government revenues in the budget. That will tell us the entire picture on demonetization. 

 

 

Keep in mind, unwise to view this move on notes alone. GST with its IT income tax reporting infra and even signing of the Indo Mauritius treaty means that the Modi government has been tightening the screw on BM long before demonetization. In the hoopla of the note ban we also signed a treaty with Cyprus which means BM money cannot be channels into shares from there. 

 

Whats disappointing to see if that Indian media seem to take demon as the be all end all. Its not. Its one step (a major step) in a series of steps to come. The Indian mauritius treaty was one of the main route via which BM was invested in shares. Just as demon it was a surprise to the markets and they feel for about a week before recovering. 

 

http://in.reuters.com/article/india-nse-idINKCN0Y208T

 

[Tibarn]

28 minutes ago, moniker said:

You don't have to vote to bring bread to your family. These people are being forced to wait in lines to sustain their livelihoods. Cannot be compared to elections where you can choose to not exercise your right to vote.

I personally welcome this demonetization move wholeheartedly but feel that it could have been implemented better keeping our heavily cash based economy in mind.

The posts are regarding whether demonetization is causing death by forcing people to wait in line.

 

We don't know if those that did die while waiting in line are the extremely poor, who are forced to wait in line to "feed their family." They could just as well be middle class people. In fact, many of the cases I have read of deaths waiting in line are due to  heart attacks, which are usually a result of heart disease, something that the middle class is more likely to have in India.   I'm not saying it's okay that middle class people die, but I'm only attacking the narrative of demonetization causing death. If many/most of the deaths are via heart attacks, then the people who died had heart disease/heart problems that they themselves caused via poor eating habits. We don't know if/when they would have had a heart attack if not for demonetization, and we certainly have no evidence that waiting in line is what caused the deaths, therefore we can't say that demonetization/waiting in line is the cause of the deaths. This is poor journalism/ jumping to conclusions/ fear-mongering.  

 

In terms of implementation, everyone is agreeing that there should've been better implementation, but, the question is if there was a trade-off between secrecy and implementation.  If, as the government predicted, secrecy would be compromised, they made the tough decision that the secrecy was more important to the success of the scheme than speedy implementation. For instance, some rumors said that the scheme was supposed to start on Dec 1, but the information began to leak and thus was pushed forward. 

 

7 hours ago, Singh bling said:

http://thewire.in/86086/modis-note-ban-may-spell-catastrophe-bjp/

 

This is one of the dumbest articles I have ever seen, not unexpected from a clown like PS Jha. It looks like he wikipedia'ed the QTM equation to impress people. 

 

He lies that the money supply is close to zero, not very honest of the clown.

 

He claims that Niti Aayog and RBI weren't consulted on the move and tries to use that as an argument against the move, yet the members of Niti and the RBI governor both support the move.

 

The creme de la creme of the ridiculous article is this excerpt:

7 hours ago, Singh bling said:

What Modi has inflicted on India, therefore, is far worse than a natural calamity or a recession. For the first hits only parts of a country, while the second often spares agriculture and exports. But demonetisation has hit every part of a country and every sector of an economy at the same time.

The idiot tries to establish his credibility in economics by pointlessly quoting Keynes and arbitrarily using the QTM equation adn then says the move is worse than a recession. 

 

The move is predicted to reduce the nominal GDP growth rate to varying degrees. The puppet former PM quotes Ambit capital's extremist view that it will shave 2% off the growth rate, while others have predicted as low as .25%. Either way, a weakened growth rate is not anywhere close to being as bad as either a natural calamity or a recession. 

 

A natural calamity can result in GDP contraction via loss of productive assets and capital.

 

A recession is literally negative economic growth for successive quarters, ie contraction of total GDP. 

 

This Jha fellow is illiterate of basic economics to say that a slower expansion of an economy is worse than sustained contraction of GDP. 

 

[mishra]

Any local delhite? @Singh bling who is this Delhi law firm and on the run Rohit Tandon with 160 crore of unaccounted money seized from him so far. I have suspicion that this guy has connection to some media darling party of delhi like AAP or Congress.  Else they would be putting more details

[Singh bling]

Quote

Rs 40 lakh in new currency notes seized from ‘anti-corruption society’ president’s car

Police reportedly confiscated the large sum of money from a white-coloured Innova car with a fancy number plate, bearing the registration number MP04 BC 2505.

http://indianexpress.com/article/india/rs-40-lakh-in-new-currency-notes-seized-from-anti-corruption-society-presidents-car-4417601/

Looks like apart from common man every corrupt has got hand on new currency

[Singh bling]

7 minutes ago, mishra said:

Any local delhite? @Singh bling who is this Delhi law firm and on the run Rohit Tandon with 160 crore of unaccounted money seized from him so far. I have suspicion that this guy has connection to some media darling party of delhi like AAP or Congress.  Else they would be putting more details

Don't have any knowledge about it

[BeautifulGame]

You have to ask also why more 2000 notes are printed rather than 500 or 100 rupees ..

Whatever the excuse , some aspects of the process has been badly handled

[Haarkarjeetgaye]

3 hours ago, BeautifulGame said:

Just curious.On what basis the NPA crisis is over ?

banks have written off the loans, now that they have cash in deposits

[BeautifulGame]

hmm

 

only time will tell for sure, but in bypolls held across the country post demonetization BJP has performed extremely well.

 

That is an actual quantitative guideline as compared to an opinion.

 

India has a first past the post system. So long as 30% firmly believe in what Modi has done the BJP will sail through. The opposition is scattered on this issue be it Nitish or Patnaik. The assumption is the remaining 70% will vote for one party against the BJP which is just not the case.

 

Take UP, once again if there are no major alliances this effectively means BJP needs about 30% to form government or to do well. If India had a presidential system where every vote mattered then Modi was probably in trouble, assuming demonetization does not clear up.

 

The Samajwadi themselves are looking to extend the UP elections from Feb-March to March-April and have done this by announcing board exams in Feb-March period. By then demonetization will not be an issue.

 

In terms of medium term effects this will shave off 0.5-1% of growth in this financial year as per most reports I have read. However this can easily be recouped based on government spending which means the budget for 2017-2018 is probably going to define the long term gains. The NPA crisis is effectively over as well which means banks are going to start lending.

 

 

It's an interesting perspective for sure .

There was a poll few days back in a Tamil magazine(Vikatan) few days back .

On the question of whether they support demonetization nearly 75% people said yes they support .

But on the question of whether they will vote BJP because of this the answer was

7% percent said yes

Nearly 60% said no and rest said will decide come election time .

Now obviously TN is a state with not support for BJP and also heavily urbanised .So you can say for sure at least among the urban section of the country at least for the moment it is still very popular regardless of party affiliations or neutral.

The real impact will be if it doesn't yield long term befinits as BJP claims (2019 will be a fair reflection of that ) and how much it has affected the rural population (which UP could be a pretty good indicator).

[Haarkarjeetgaye]

1 hour ago, Tibarn said:

The posts are regarding whether demonetization is causing death by forcing people to wait in line.

 

We don't know if those that did die while waiting in line are the extremely poor, who are forced to wait in line to "feed their family." They could just as well be middle class people. In fact, many of the cases I have read of deaths waiting in line are due to  heart attacks, which are usually a result of heart disease, something that the middle class is more likely to have in India.   I'm not saying it's okay that middle class people die, but I'm only attacking the narrative of demonetization causing death. If many/most of the deaths are via heart attacks, then the people who died had heart disease/heart problems that they themselves caused via poor eating habits. We don't know if/when they would have had a heart attack if not for demonetization, and we certainly have no evidence that waiting in line is what caused the deaths, therefore we can't say that demonetization/waiting in line is the cause of the deaths. This is poor journalism/ jumping to conclusions/ fear-mongering.  

 

In terms of implementation, everyone is agreeing that there should've been better implementation, but, the question is if there was a trade-off between secrecy and implementation.  If, as the government predicted, secrecy would be compromised, they made the tough decision that the secrecy was more important to the success of the scheme than speedy implementation. For instance, some rumors said that the scheme was supposed to start on Dec 1, but the information began to leak and thus was pushed forward. 

 

 

This is one of the dumbest articles I have ever seen, not unexpected from a clown like PS Jha. It looks like he wikipedia'ed the QTM equation to impress people. 

 

He lies that the money supply is close to zero, not very honest of the clown.

 

He claims that Niti Aayog and RBI weren't consulted on the move and tries to use that as an argument against the move, yet the members of Niti and the RBI governor both support the move.

 

The creme de la creme of the ridiculous article is this excerpt:

The idiot tries to establish his credibility in economics by pointlessly quoting Keynes and arbitrarily using the QTM equation adn then says the move is worse than a recession. 

 

The move is predicted to reduce the nominal GDP growth rate to varying degrees. The puppet former PM quotes Ambit capital's extremist view that it will shave 2% off the growth rate, while others have predicted as low as .25%. Either way, a weakened growth rate is not anywhere close to being as bad as either a natural calamity or a recession. 

 

A natural calamity can result in GDP contraction via loss of productive assets and capital.

 

A recession is literally negative economic growth for successive quarters, ie contraction of total GDP. 

 

This Jha fellow is illiterate of basic economics to say that a slower expansion of an economy is worse than sustained contraction of GDP. 

 

are you sure the 0.25% is overall GDP reduction. From what I have heard in interviews it is 0.25% per month. it will multiply by the numbers of months till atleast 60% of the currency is restored back and that is a minimum 6 months. GDP, FDI etc all should translate into jobs, which is very bleak at this moment and the government has no magic wand to correct that.

 

also supporting the move does not mean it will achieve the objective. This may impact sitting black money but in no way stalls black money generation. All parties are sitting on undisclosed party funds, max being BJP and congress, that is where black money originates from. Unless tax reforms are introduced, black money will generate within no time.

Edited December 11, 2016 by Haarkarjeetgaye

[BeautifulGame]

banks have written off the loans, now that they have cash in deposits

That's simply not true .

Deposits and writing off NPA loans have simply no correlation.What deposit does is as GB said increase the funds with banks to give fresh loans .

[Haarkarjeetgaye]

9 minutes ago, BeautifulGame said:

That's simply not true .

Deposits and writing off NPA loans have simply no correlation.What deposit does is as GB said increase the funds with banks to give fresh loans .

They do. Writing off without the deposits could have shut down the banks. If Loan installments would have been written off on the asset side, then retained earnings go down on the liability side.  banks could shut down or be saved by the government. Now that cash deposits have come, the Loan installments which are receivables on the asset side, can easily be written off. Cash is also an asset on balance sheet. So one asset going up , gives you the ability to write off the bad asset.

Edited December 11, 2016 by Haarkarjeetgaye

[BeautifulGame]

They do. Writing off without the deposits would have shut down the banks. If Loan installments have been written off on the asset side, then retained earnings go down on the liability side.  banks would shut down. Now that cash deposits have come, the Loan installments which are receivables on the asset side, can easily be written off.

Firstly no Indian bank is going to shot down anytime neither for lack deposits or nor for NPA in India .This isn't USA .

And NPA aren't written off based on the deposit .It is written of based on the profit and more importantly the provision banks keep .That's why Basel II was introduced and for every NPA ,provision is kept based on the risk factor .

You just cant written of based on the increase in deposits .Also deposits are a liability in bs and can be withdrawn at any time .You don't write off assets based on increase in liabilities .

[Haarkarjeetgaye]

8 minutes ago, BeautifulGame said:

Firstly no Indian bank is going to shot down anytime neither for lack deposits or nor for NPA in India .This isn't USA .

And NPA aren't written off based on the deposit .It is written of based on the profit and more importantly the provision banks keep .That's why Basel II was introduced and for every NPA ,provision is kept based on the risk factor .

You just cant written of based on the increase in deposits .Also deposits are a liability and can be withdrawn at any time .You don't write off assets based on increase in liabilities .

In this case you can because the increase in deposits is going to sustain till currency is back in circulation. Here writing off assets in based on increase in assets for a period. Yes liability increases on the balance sheet, but with controlled withdrawal, the liability is for the future, not immediate. Also imagine writing off without the deposits, was it possible. what is the other source of revenue for the bank. The new loans from these deposits as you said.

 

If banks had strictly conformed to Basel reforms, Indian banks would have never ensued a bad loans or NPA problem.

Edited December 11, 2016 by Haarkarjeetgaye

[Tibarn]

8 minutes ago, Haarkarjeetgaye said:

are you sure the 0.25% is overall GDP reduction. From what I have heard in interviews it is 0.25% per month. it will multiply by the numbers of months till atleast 60% of the currency is restored back and that is a minimum 6 months. GDP, FDI etc all should translate into jobs, which is very bleak at this moment and the government has no magic wand to correct that.

Let's take the worst number presented, 2% from PM Singh and Ambit Capital. That number is presented as GDP growth reduction, so instead of 7.5% GDP growth from the last year, it would go down to 5.5 % growth. This is different than a contraction of our GDP by 2 % where it would mean the GDP would lose $ 40 billion USD.  The drop in growth rate is definitely something that is a valid and fair criticism, but some are spreading misinformation that our economy is going to contract, which no one serious has predicted.

 

Yes this is probably a multiple month event. I personally predicted that it will be 2 quarters of effects on the GDP, not sure at what percent, which translates to 6 months of effects. Again, this is a valid criticism, whether it is a worthwhile trade-off to effect multiple months of GDP growth.

 

Yes, there should be better job creation, but I don't think highly of the FM, and the PM is showing no signs of replacing him. Even last year, when we had a 7.5% GDP growth, job creation was middling. We still have not been able to boost manufacturing so far, but there is a lag effect before the reforms the government has put into place come into effect, so one shouldn't expect immediate job creation.

 

The FDI is a different issue, as, although we are getting record FDI input, much of it is going into already better off states like MH, GJ, HR, TN, TG, AP, etc. The places where FDI would have the greatest effect ie WB, UP, BH are run by goons who have no idea what they're doing and thus attract no FDI.

 

24 minutes ago, Haarkarjeetgaye said:

also supporting the move does not mean it will achieve the objective. This may impact sitting black money but in no way stalls black money generation. All parties are sitting on undisclosed party funds, max being BJP and congress, that is where black money originates from. Unless tax reforms are introduced, black money will generate within no time.

Agree, but it's hard to even know what the objective is, as the PM first talked about Black Money and then switched to Cashless Economy. 

 

I personally supported the move for two reasons: 1) It hit the Maoists and Kashmiri terrorists hard, and 2) It looks to me like the PM may be doing the ArthaKranti reforms, which is a big deal IMO.

 

If he doesn't do (2), then I will be disappointed.