Banks gear up for pre-2005 note exchange rush
-Business Standard
This is a good initiative as it will help remove fake currency which are in circulation,
Banks are gearing up to meet the expected customer rush for exchanging
currencies after the Reserve Bank's decision to phase out notes issued
prior to 2005.
"There will be some pressure, but we are confident that we will handle it. We have cash depositing machines in large numbers which will help ease pressure. By end of February, we will around have 1,000 cash depositing machines," State Bank of India Deputy Managing Director P K Malhotra told PTI.
This is a good initiative as it will help remove fake currency which are in circulation, he said, adding that notes which are printed after 2005 have more security features.
According to Oriental Bank of Commerce CMD S L Bansal, the bank will adhere to all the directions of the Reserve Bank of India (RBI) regarding withdrawal of notes.
"I don't feel there would be a great rush for exchange of notes because most of such currency would be out of system," he said, adding that generally notes have shelf life of 10 years only.
A senior official of Punjab National Bank said their branches are fully geared up to meet the rush for currency exchange.
The Reserve Bank on January 22 decided to withdraw all currency notes issued prior to 2005, including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently aimed at curbing black money and fake currencies.
The public are required to approach banks for exchanging these notes.
The RBI had also said the volume of such notes that were being withdrawn from circulation was not significant.
The removal of older currency notes from circulation is a standard international practice, RBI had said.
From July 1, 2014, persons seeking exchange of more than 10 pieces of Rs 500 and Rs 1,000 notes will have to furnish proof of identity and residence to the bank.
The notes printed prior to 2005 will continue to be legal tender even after July 1. Any number of these old series notes can be exchanged by people at bank branches where they have accounts, RBI had said.
As per RBI data, 7,351 crore pieces of currency notes were in circulation on March 31, 2013. Of this, 14.6 per cent were Rs 500 notes and 5.9 per cent were Rs 1,000 notes
"There will be some pressure, but we are confident that we will handle it. We have cash depositing machines in large numbers which will help ease pressure. By end of February, we will around have 1,000 cash depositing machines," State Bank of India Deputy Managing Director P K Malhotra told PTI.
This is a good initiative as it will help remove fake currency which are in circulation, he said, adding that notes which are printed after 2005 have more security features.
According to Oriental Bank of Commerce CMD S L Bansal, the bank will adhere to all the directions of the Reserve Bank of India (RBI) regarding withdrawal of notes.
"I don't feel there would be a great rush for exchange of notes because most of such currency would be out of system," he said, adding that generally notes have shelf life of 10 years only.
A senior official of Punjab National Bank said their branches are fully geared up to meet the rush for currency exchange.
The Reserve Bank on January 22 decided to withdraw all currency notes issued prior to 2005, including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently aimed at curbing black money and fake currencies.
The public are required to approach banks for exchanging these notes.
The RBI had also said the volume of such notes that were being withdrawn from circulation was not significant.
The removal of older currency notes from circulation is a standard international practice, RBI had said.
From July 1, 2014, persons seeking exchange of more than 10 pieces of Rs 500 and Rs 1,000 notes will have to furnish proof of identity and residence to the bank.
The notes printed prior to 2005 will continue to be legal tender even after July 1. Any number of these old series notes can be exchanged by people at bank branches where they have accounts, RBI had said.
As per RBI data, 7,351 crore pieces of currency notes were in circulation on March 31, 2013. Of this, 14.6 per cent were Rs 500 notes and 5.9 per cent were Rs 1,000 notes
Baba Ramdev could be the next Adam Smith-Business Standard
Ban all currency notes of Rs 500 and Rs 1,000. People can't take a bribe of Rs 100 crore in Rs 20 notes
Think of a world where people begin their mornings with yoga, cure all
ailments — AIDS too — with herbal medicine and — most important — pay no
income tax. Too good to be true? Wait till Baba Ramdev,
or one of his followers, becomes the country’s prime minister. The
new-age yoga guru, healer of the ill, enemy of corruption and black money,
television star, homophobe, friend of the Bharatiya Janata Party is now
also an economist. His prescription to rid India of all economic pain:
abolish all taxes (except customs duty that can be used to collar the
unclean videshi) and replace them with a banking transaction tax.
While the government will lose almost Rs 10 lakh crore in tax revenue,
the new tax will fetch it Rs 15 lakh crore. The government will be happy
because it will have more money in its coffers — with which it can
build yoga schools in India and abroad — and people will have higher
disposable incomes with which to buy Ayurveda dietary supplements.
Wait a second, the ignorant might say: not all monetary transactions go through the banking channel. So a lot of people, especially those who deal in black money, will go untaxed. Similar experiments in South America show that people opt out of the banking system whenever such a tax is levied; they even gave a name to the phenomenon: disintermediation. Such loopholes haven’t been overlooked by the learned one. Ban all cash transactions above Rs 2,000, he says. But only 50 per cent of the country’s population is banked at the moment, the ignorant might persist. But what are the banks there for? Get them to expand till they cover every man, woman and buffalo in the country. Bank expansion is actually that simple. Wonder why they never thought of it.
Most of us will rejoice once income tax gets axed. The only problem here is that income tax is progressive: you pay more as your income goes up. There are slabs for different categories. But the learned one hasn’t forgotten slabs — the most important point in the whole debate. That’s why he wants six or seven different slabs for the banking transaction tax: one each for manufacturing, trading, retailing, services, luxury and liquor and tobacco. The highest rate of 30 per cent would apply to the sin sectors of liquor and tobacco. Where will you slot ITC? Or Nokia: manufacturing or luxury? These are mere irritants which can be ironed out by bureaucrats and lesser economists.
It is another great idea whose time has come. The learned one’s sage counsel has found takers in BJP. With his massive following in middle India, the party can hardly afford to disagree with the learned one. BJP heavyweights like Rajnath Singh, Arun Jaitley and Nitin Gadkari have been adequately briefed on the subject. The last named has, in fact, already expressed his support to the radical, but farsighted, proposal. Everybody panned it; but then most people first thought Isaac Newton was mad.
Tax reform is just one part of the learned one’s reform agenda. Nothing draws his ire more than black money. In 2010, he had suggested that the government should replace the existing currency with a new one — all the black money stashed away in watertight vaults abroad will come back. He had estimated that as much as Rs 300,000 crore is the extent of unaccounted Indian money. He subsequently told this newspaper that 30-40 per cent of this money is outside, while the rest is in India, “invested in gold, mining, real estate, infrastructure and Naxalism et cetera”. Foreign investment, he had thundered, “is a key source of black money”. There is a slight tweak in the prescription now: ban all currency notes of Rs 500 and Rs 1,000. The simple and elegant logic is that people can’t take a bribe of Rs 100 crore in Rs -20 notes. It would be a good idea to ban extra-large trunks as well.
Wait a second, the ignorant might say: not all monetary transactions go through the banking channel. So a lot of people, especially those who deal in black money, will go untaxed. Similar experiments in South America show that people opt out of the banking system whenever such a tax is levied; they even gave a name to the phenomenon: disintermediation. Such loopholes haven’t been overlooked by the learned one. Ban all cash transactions above Rs 2,000, he says. But only 50 per cent of the country’s population is banked at the moment, the ignorant might persist. But what are the banks there for? Get them to expand till they cover every man, woman and buffalo in the country. Bank expansion is actually that simple. Wonder why they never thought of it.
Most of us will rejoice once income tax gets axed. The only problem here is that income tax is progressive: you pay more as your income goes up. There are slabs for different categories. But the learned one hasn’t forgotten slabs — the most important point in the whole debate. That’s why he wants six or seven different slabs for the banking transaction tax: one each for manufacturing, trading, retailing, services, luxury and liquor and tobacco. The highest rate of 30 per cent would apply to the sin sectors of liquor and tobacco. Where will you slot ITC? Or Nokia: manufacturing or luxury? These are mere irritants which can be ironed out by bureaucrats and lesser economists.
It is another great idea whose time has come. The learned one’s sage counsel has found takers in BJP. With his massive following in middle India, the party can hardly afford to disagree with the learned one. BJP heavyweights like Rajnath Singh, Arun Jaitley and Nitin Gadkari have been adequately briefed on the subject. The last named has, in fact, already expressed his support to the radical, but farsighted, proposal. Everybody panned it; but then most people first thought Isaac Newton was mad.
Tax reform is just one part of the learned one’s reform agenda. Nothing draws his ire more than black money. In 2010, he had suggested that the government should replace the existing currency with a new one — all the black money stashed away in watertight vaults abroad will come back. He had estimated that as much as Rs 300,000 crore is the extent of unaccounted Indian money. He subsequently told this newspaper that 30-40 per cent of this money is outside, while the rest is in India, “invested in gold, mining, real estate, infrastructure and Naxalism et cetera”. Foreign investment, he had thundered, “is a key source of black money”. There is a slight tweak in the prescription now: ban all currency notes of Rs 500 and Rs 1,000. The simple and elegant logic is that people can’t take a bribe of Rs 100 crore in Rs -20 notes. It would be a good idea to ban extra-large trunks as well.
No comments:
Post a Comment