War On Cash Strikes India: PM Scraps Large Bills, Limits ATM Withdrawals To "Fight Corruption"

Tyler Durden's picture

In a fiery address to the Indian nation, PM Narendra Modi just took a major step in the war on cash that is being waged worldwide. Talking tough on fighting corruption and the black market economy, Modi decreed that the INR500 ($7.50), and INR1000 ($15) bills will no longer be legal tender and that ATM withdrawals will be limited to INR2000 ($30) for some.

"Fake money and terrorism are ruining the nation's fabric,"  Modi exclaimed, adding that "it was very important to keep this news under wrap. Due to this, RBI and post office have a major task ahead and RBI has also decided that all banks will be shut for the public on November 9."

 

"Honest man cannot buy a house, cannot get proper education due to black money."

 

"Cash economy aides black money, corruption and makes life difficult for the poor."

 

"Government is imposing a limit on high denomination notes. In the history of nations, such a moment comes when you realise that you must be part of this historical moment. This, is one such day. Every common man who is tired of corruption and black money is welcome to contribute to this catharsis. It is very important to cleanse the nation of the corruption."

 

"Come, let's all celebrate the festival of honesty"

As Bloomberg details,

India decided to abolish currency notes of 500 and 1,000 rupees denominations to fight rampant tax evasion and corruption, Prime Minister Narendra Modi said in a televised address to the nation.

 

The notes will no longer be legal tender from Nov. 8, and will have to deposited in banks by end of December, he said in a late evening message broadcast on major national television networks.

 

Some concessions will be allowed for use of the currency notes in government-run hospitals until Nov. 11.

The Rupee is rallying on the news...

As Reuters reports:

  • INDIA PM MODI SAYS ENEMIES FROM ACROSS THE BORDER THROUGH FAKE MONEY ARE FUNDING TERRORISM
  • INDIA PM SAYS BLACK MONEY, CORRUPTION ARE THE BIGGEST OBSTACLES IN ERADICATING POVERTY

Somewhat shockingly, Modi further added that ID cards will be required to return money to banks.

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onmail1's picture

Modi is an honest & saintly figure who

also fights the evil of black money (& lslamic terror)

Soooooo many ppl in India especially

in the construction sector & political parties have

amassed huge cash in secret godowns

Thumbs up to PM Modi, keep it up

& throw these corrupt in jail

--------------------------

How Black money is generated in India:

1. Rich class only gets access to quality education

(rest sell tea to support themselves ;-)

2. Then they corner plum posts in govt. & in public sector cos.

by push & pull & make black money using influence

3. They buy palatial farmhouses, declare themselves as farmers and

declare their black money as tax free farm income(black becomes white).

4. These govt. & public sector execs also become key members

of foreign funded NGOs , get foreign money & influence govt. decisions

( may also leak key info to foreign govts)

and also travel abroad on several pretexts but actually

to stash their black money in secret foreign a/cs there

(Surprisingly many many top i.e. secretary level bureaucrats are

key members of foreign NGOs right beneath the nose of govt.)

5. In corp.sector like construction , public utility(eg. electricity etc)

they (rich class) get plum govt. contracts by push & pull ,

make big money by overquoting(eg. in infra or tech imports)

or by showing huge (fictitious) losses to income in public utility thus

causing huge rise in utility bills of common people (like tea sellers ;-)

6. Huge black money is transferred abroad by a system called hawala

(take local currency here & pay $ there for commision)

which is run by paki & terrorist entities

7. Rest of the black money is kept in india disguised as real estate in

several names, (real estate biz is done only in 1/3 or 1/4 as white)

gold, silver, diamonds and also in hidden cash godowns for

funding activities such as elections to grab political power after retirement

and the cycle goes on & on

hedgeless_horseman's picture

 

Coming soon to where I live.

LawsofPhysics's picture

Most ATMS already have a cash limit to how much you can remove in a day.

hedgeless_horseman's picture

 

So?

I honestly haven't used an ATM in more than 20 years.

LawsofPhysics's picture

Just pointing out the fact that it's already here.

ParkAveFlasher's picture

First they came for Gold Shirt Man.

hedgeless_horseman's picture

 

Then they came for all of our fat black toll booth operators, and now you can only use an RF tracking device, and pay by electronic means using a bank card, if you want to travel on many Texas highways.

ParkAveFlasher's picture

That's what you get for complaining about fat black toll booth operators.

Once you realize that someone with enormous sums of money sees you as a obsolescence target, everything else comes into perspective.  A century ago it was man-vs-machine, today it's man-vs-algorithm.

But you must have faith, nothing replaces that.

hedgeless_horseman's picture

 

I have never complained about fat black toll booth operators.  

I have complained that the toll road authorities no longer remove the tolls once the roads are paid for, as once promised.

Toll roads are actually very libertarian.

ParkAveFlasher's picture

"You" figuratively. 

How about this: task-based government. 

New_Meat's picture

h_h:

"I have complained that the toll road authorities no longer remove the tolls once the roads are paid for, as once promised."

In random free moments, check in on Howie Carr.  His rants in HIGH Dungeon are extremely amusing when he gets on to the Mass Turnpike (bonds were paid off 4 or 5 times over).  After all, the hackarama promised, promised I say, to drop the toll booths once the bonds were paid off.

That might have been the start of my awareness that politicians were very economical of the truty.

- Ned

Bay Area Guy's picture

The same thing was promised for the Golden Gate Bridge.  It would be free to travel on once the bonds were paid off.  But, bridge district directors were afraid of losing their cushy positions and, so, to further lining their own pockets, they decided to get into the transit business.  The Golden Gate Transit District, fully under the authority of the Bridge District, now operates at a staggering loss each year, so, of course, not only is the bridge not free to cross, tolls are constantly being raised to fund the deficit in the transit agency.  About two years ago, they eliminated toll takers, requiring the use of a FasTrak RF device to pay tolls.  Naturally, since many tourists cross the Golden Gate Bridge in rental cars, they don't have the RF device and the rental companies get the bills, then promptly sock the renter with not only the cost of the toll, but with a healthy "penalty" to boot.

hedgeless_horseman's picture

 

http://goldengate.org/board/members.php

Mother Nature does love her leeches, parasites, and bottom feeders.

Luc X. Ifer's picture

Religion is killing India. Same like in the Middle East  and Murica,  religion is poisoning everything but with different flavors. The specifics of the flavour of the religion in India is that you can do watever you want in life because anyway your fate - Karma, is not of your doing but the doing and the will of the imaginary rulers - the gods.

enfield0916's picture

Religion is not killing India, the fake religious merchants are. Just like pedo pastors and fake gurus in the west teaching fake yoga that does nothing for the spirit and mind. Just makes people sweat their balls off in weird positions and the hot ass yoga teached charges $100 a month for people to look at her fine toned ass and keep coming back for more bullshittery!

How do I know? I was born in India and my guess you have never been there, but I may be wrong about the you not being there part.

Luc X. Ifer's picture

Because your fellow atheist Indians tell it. And because rational people all over the world know it - that there is no such thing like 'true religion' and 'fake religion', that's an oxymoron, there is only one religion - a fabrication of the con man to take easy advantage of the ludicrous imbeciles who are roaming the face of this planet, the genial, greatest and most successful creation of intelligent minds to  use for their benefit the ones born not so intelligent, basically shepherd aristocrats and stupid human cattle.

Luc X. Ifer's picture

And BTW I love the hot ass yoga teacher at least :)

 

RaceToTheBottom's picture

Outlaw H1B migrants to do away with Corruption!!!!!

silverer's picture

That's to protect the banks against fraud. Hahahahahaha

shamus001's picture

Abolish taxes and now you no longer have a problem with fraud. :)  There that was far easier!  (I should be PM) Next issue?!

asteroids's picture

Should such stupidity come to North America, I would instantly stop using banks!

enfield0916's picture

What and who is stopping you now from kiccking the banks in the ass?

Just go to a local credit union, they know you by name, send you greeting cards for the holidays and cannot legally charge over 15% interest on anything.

MrFriskles's picture

Agreed, but its not a hard limit. You just have to ask them and the limit will be removed. I hardly call that a capital control. I have raised it to pull 3 grand if I want. Same fraud protection available. Given that most people have less than a couple grand in their account, I bet they rarely come up against that 300 dollar limit.

xythras's picture
xythras (not verified) LawsofPhysics Nov 8, 2016 11:27 AM

You can go to your bank and increase the ATM daily limit.

I had to in order to take out all my savings in record time and not be bothered by paperwork. And I found a nice old bank clerk that would always exchange large amounts of cash into EUR500 bills with no questions asked.

Now let's see how to change all those EURO into CHF1000 notes. If Trumps win, that's the move.

Euro will be worthless in notime.

rp2016's picture

ZH, beware of creating panic.

This is not the same war on cash that comes from the NIRP...

A lot of people in India do not put any money in bank ... all the black money.. it is to get that things straightned up.

 

http://just-a-thought-from-thinair.blogspot.com/2016/11/the-fundamental-...

http://just-a-thought-from-thinair.blogspot.com/

EhKnowKneeMass's picture

Yeah, right, to get things straightened up! Give me whatever you are smoking.

By the way, times of india is reporting that they are not just abolishing INR 500 and 1000 notes, but releasing new INR 500 and 2000 notes. So, how is the new INR 500 and 2000 notes going to prevent accumulation of black money?

This is another way to control inflation, which will rise when GST is rolled out.

xythras's picture
xythras (not verified) EhKnowKneeMass Nov 8, 2016 11:21 AM

I think they had a problem with counterfeit money so that's why the move.

an_indian's picture

@Tyler Durden. I do wish you get your basic facts correct first before force-fitting every event to suit your hangups and pet peeves.

The Rs 500 and 1000 notes are NOT being ABOLISHED as you claim in BOLD text.

They are merely being replaced with newer notes that supposedly provide stronger security against counterfeiting and one more thing.

Money which has evaded taxes in India is called Black money and the black economy is supposedly at least as large (or even larger) than the "White" economy. I'm sure using cash to remain anonymous and evade taxes happens everywhere.

There is also an endemic problem of fake currency in the 500 and 1000 denominations and we have an elaborate system of checking notes to determine whether they are genuine or fake. Even our currency counting machines are enabled to show up fake notes. When we are saddled with fake notes banks don't replace them and we bear the loss.

This has become a serious problem with everyone inspecting notes you have given them during each transaction. Besides loss of time it also leads to loss of confidence in the system. It is also a serious sink of resources all around.

So, this is a master stroke which, all at once brings sudden death to black money held in high denominations, puts paid to fake notes and helps Govt track money held by individuals all at once and given the size of the population its brilliant.

Its funny no other Govt thought of doing this.

While I do understand the issue of Govt tracking the population and taking control of their money it does not mean that every Govt action has to be fitted to your pet peeve. There may be other, more urgent issues that needs addressing.

The averae Indian is not as foolish as the people in the West and has a healthy disregard for the real intent behind Govt actions. Therefore we see a huge buying up of gold and silver with people buying gold at between 33% to 100% premium over today's rates (between 40 to 60 thousand rupees per 10 gms against prevailing market rate of 31000 rupees), provided they are able to tender old currency and there is no paper trail (here you need to provide identity and PAN - Income Tax related number - details to buy gold as well).

The logic is, if you deposit this money into the bank Govt will start tracking you and present a notice to you to explain source of income, failing which they can impose anywhere from 30% to 120% s taxes and penalties, apart from harassing you endlessly.

Therefore, why not save all that pain, pay a premium to the gold merchant and keep wealth in "Real Money" away from the prying eyes of Govt. This is millenia-old logic in India and this is why saving in gold (held in the form of jewellery thus enabling daily use of money as well as holding it as an investment) is a deep part of our culture.

Finally, this move is not going to abolish tax evasion since it does not address the root cause (people feeling taxes to be too high and culture has gradually eroded into "evade tax at any cost") but merely addresses the symptom of black money. In a few months, evasion will re-start with new currency.

There is a radical proposal reviewed by the Prime Minister which suggests abolishion of every type of tax (there are 56 types of direct and indirect taxes in this country), completely abolishing the 1000, 500 notes (since a large part of India lives on less than Rs 100 per day per family, why do they need large notes), forcing routing of all transactions through the bank and levying a 0.7% - 2.0% transaction tax on each transaction, which, according to calculations, could net the Govt an even larger amount than all the taxes collected under the current system.

The effects count be spectacular. No counterfeiting as no large denomination notes in circulation. No Income Tax, thus no black money (this alone could double our GDP). More money in the hands of people so spending could increase leading to improvement in economic activity. etc, etc.

The average Indian is a docile creature, until you ouch his money. t that point he can be murderous and extremely violent. No politician or political party will do a stupid thing like bail-ins with people's money otherwise their lives are in danger. Unlike the sheeple in the West I don't think we fac serious risk of loss of money via bail-ins. And in any case we store a lot of money as gold (India perhaps holds 10% of all gold in the world in private hands) which cannot be bailed in.

I also believe that this provides an opportunity to corrupt politicians of all colors to act as brokers in converting old into new currency while taking a cut, thus providing huge funds to help their election campaigns. This move is also timed well as it also kills the huge amount of money held by opposition parties to be used in the upcoming elections in India's most populous state. But it could backfire as most small business people use cash for their transactions and its a huge pain at present.

Please try to understand an alien country and topic before writing up on it. It might sully an otherwise great reputation you have.

cheers

 

LawsofPhysics's picture

LOL!!!!

Because preventing people from accessing THEIR MONEY makes them trust their government even more...

Fucking morons.

cwsuisse's picture

Interesting contribution. However it does not deal with the combination of exchange of notes and calls by Modi to avoid cash. The call to avoid cash in India seems to indicate that Mr. Modi might have lost  contact to reality. You write: "It is funny no other government thought of doing so". Well, it is the central banks not the governments that are pondering about it. If the central banks push too hard they might be closed by the will of the people.

Jeffersonian Liberal's picture

True.

But it's worse than that.

To all those who thought Modi would bring the "hope and change" that would save India, I said back then that he had no plans of throwing the parasite of Central Banking off his country's neck and everything he said was therefore bullshit.

Clamping down on cash is just doing the bidding of the central banks.

Modi is just another puppet for the central banks and the people will suffer under him just as they have under all other puppets.

Oh regional Indian's picture

As an Indian, I could not have said it better. The man is a stooge. In fact, he is a stooges stooge.

Ugh and bah and fuck politics and politicians....

India going cashless AND identity proofs for everything....

 

LawsofPhysics's picture

Yep, a real thriving black market for many things in India already.  Good to see you are still alive ORI!

Offthebeach's picture

The people will be beaten, until the elite quit stealing.

NoDebt's picture

"Modi decreed that the INR500 ($7.50), and INR1000 ($15) bills will no longer be legal tender"

I'm guessing you can buy a nice house there for like $1400, then?  No "big" $15 bills for you, son.

 

 

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) NoDebt Nov 8, 2016 10:29 AM

I Thought the same thing! Like WTF? The daily limit from an ATM is $30. Jeezus. Someone needs to tell this guy about the little word I like to use when busybodies like this fuckwad are running around being busy: NUNYA.

Blankone's picture

Someone is making $$$ off the repeated, every day ATM transacions.  Those people put money in his pocket.

Dubaibanker's picture

Bring it on! The curse of the rich and no benefit to the masses!

Business and property will drop massively which are already very weak!

EhKnowKneeMass's picture

And most Indians will lap up this draconian measure like a curry. This BJP led government is a totalitarian regime. In the name of terrorism and corruption, they are going to pass more measures that will destroy whatever democracy exists in India. These people are dangerous and most Indians are ignorant about the threats they pose.

shamus001's picture

This guy is a complete IDIOT.  Government script (fiat at that) is the GREATEST CRIME EVER FORCED ONTO MANKIND.  The perfect scheme to hand a man a worthless piece of paper for his daily labor. (Vs something of actual value like food or gold or silver)

Once currency has been decimated in India, that country will be reduced BACK to complete ashes and poverty.  People who arent walking around with baskets on their head, soon will be.  Markets on the streets will be transacting in OTHER NATIONS CURRENCIES (which can be spent on goods) or gold/silver coinage.

The COMPLETE DIGITAL MONEY SYSTEM IS A FALLACY THAT WILL NEVER COME INTO FRUITATION.  Because it's one thing to con a man by saying "here, take this paper, it has value" but a step to far to say "Here's nothing. Your imperial majesty SAYS there are some marks on a screen, but you hold NOTHING in hand, and therefor you will STARVE or be ROBBED at the snap of my fingers! Mua haha! Now labor the fields your toady!!!"

Get where I'm going with this?  At least a man can HIDE notes!  Men inherantly DO NOT TRUST EACHOTHER- and for good reason.  We have always killed one another for eachothers stuff, and governments have always oppressed it's people at the behest of those RUNNING THE GOVERNMENT. 

Therefor NO MAN will accept NOTHING IN HAND as payment.  If if by some miracle a country is naive enough to, the WORLD will soon see the disaster unfold in that countries markets and wealth!

AlexCharting's picture

Cash is covered in urine, slime, faeces, boogers, bacterias, viruses, drugs etc. 

Erek's picture

If the "national fabric" is ruined, how are they going to make the clothes for the rest of the world?

silverer's picture

You forgot cocaine. It's not a drug, it's a lifestyle! lol

Jeffersonian Liberal's picture

Digital currency is covered by NSA perverts watching your every transaction and then shutting you down if you dare to utter a protest against tyranny.

RaceToTheBottom's picture

"Cash is covered in urine, slime, faeces, boogers, bacterias, viruses, drugs etc. "

Wait, you just described my Bankster....

Miffed Microbiologist's picture

What doesn't kill you makes you stronger.

Miffed;-)

Panic Mode's picture

Stupid. They won't deposit the money for your generous negative interest rate. They will use the notes to buy something more tangible.