Thank God such issues are not rampant in India. I guess the Indian central bank the RBI is to thank for it.
109 karma · joined June 26, 2014
Not true. I am from India. Developing country. There are 5 working people in my family. None of us can replace our notebooks with our phones. For all of us phone is for communication and notebook for work.
1. If someone has cash in hand for emergencies then he/she has to stand in a bank queue for 2-3 hours to deposit it into a bank account. 2. One has to stand in a bank queue for 2-3 hours to exchange old currency for new or to withdraw Rs 10,000 from one's account. Rs 10,000 is sufficient money to take care of basic needs for about 15 days.
3. There is a shortage of lower denomination notes. RBI received 5 million Rs 500 denomination notes yesterday. It will heal ease the problem.
I live in the National Capital Region. I have faced no problem at all. I am doing my grocery purchase online. Urban India pays it's utility bills online. There are a number of e-wallet solutions which have made online transactions easy.
I am not aware about the inconveniences faced by Indians living in rural areas. Economy in rural India is cash based. But since I have my roots in rural India I have seen many transactions happening through informal credit channel. It is not uncommon for a worker to get paid once every 3-4 months. Migrant workers often get payed by contractors at the end of their contract. The actual impact is not earth shattering.
There is a high decibel political noise around the whole thing. But as someone who has paid his taxes honestly his entire life, I welcome and support this move.
1. The Zamaindari (Zamin = Land ZaminDar = Big Land Owner ZaminDari = A system of exploitation set-up by British now dismantled.) system is over. Period. There are some big land wonders left but I am not going into it. 2. Poor borrow from money lenders who may or may not be big land owners. But in almost all the cases these money lenders are local muscle men, like everywhere else in the world. This is how parallel money lending works all over the world. The local moneylender lends money. Charges exorbitant rates. In case of non payment the life is made hell for the debtor. In many cases the debtor borrows money and spends it on gambling and alcohol and ends up loosing all his wealth to the money lender. BTW the money lender also accepts deposits. But they don't usually pay interest on the deposits. Many times these deposits work in an interesting way - what is called a "committee" in some parts of the country. Lets say there are 1000 contributors in the "committee" each depositing Rs 500 every month. Let's say duration of the committee is 2 years. Each month a lottery is conducted with one winner. The winner gets Rs 24 x 500 = 12,000 and stops contributing. The remaining members keep contributing. At the end of 24 months each remaining member gets 12,000 each. If a member misses a payment his/her contribution till date is forfeited. These moneylenders also accept deposits for safekeeping. Usually no interest is paid. Government's scheme plans to break this. 3. Government owned banks lend billions of Rupees every year to poor farmers and other economically/socially weaker sections. These loans were usually waived off by the Central (Federal) government. Populism over economics. 4. Opening of bank accounts is first step towards financial inclusion. 5. The number 15 million should be taken with a pinch of salt. Some banks like Bank Of Baroda were opening zero balance accounts and many who already had accounts opened another one with such banks. Branches were given targets and many opened accounts for family and friends who already had bank accounts.
1. Black money will not solve all our problems and make us a superpower overnight. 2. Bringing the black money back will be a watershed event. 3. This will send a message that government is serious about corruption. 4. Less incentive for politicians to loot in future.
Better articles are expected from Bloomberg.