Yesterday RBI announced waving off of RuPay Credit and Debit cards transaction charges. This step was required to remove conflict of interest with bank disbursing money because they were not disbursing cash to promote electronic transactions on which they get commission. I don't know if this decision apply to VISA, MasterCard and American Express cards also. This decision should be enforced on all banks and cards.
Thursday, November 24, 2016
Monday, November 21, 2016
13th Day of demonetization of 500 and 1000 rupee notes
Today 21st November 2016 is 13th day of decommissioning of 500 rupee and 1000 rupee notes. Today I went to Kailash Hospital, Noida to see a doctor. The OPD charge was 500 rupee but they refused to take old 500 rupee note. Although hospitals are required to take old 500 rupee notes, Kailash Hospital( A private hospital) refused to take it. Luckily they were accepting payment by credit card and I paid by credit card. It is not like that Kailash Hospital is an isolated case. Refusal of private hospitals to accept old currency notes is in news also.
After visit to hospital I went to Kotak Mahindra Bank, Sector-18, Noida to withdraw 10000 rupee from my saving account. I reached the bank at 12:00 PM and I found that no one with withdrawal request was being allowed inside the bank because bank did not have any cash to dispense. None of the ATM were working. This place have more than 20 ATMs but none of them was working.
Banks are not dispensing the cash they are having with them to force people to use online transactions and debit card/credit card payments. Banks are charging commission to merchants as high as 5% for accepting credit/debit card payments. Banks are having conflict of interest with dispensing cash from bank for which they don't get any commission. Banks don't dispense cash so that they can make money by commission from electronic transaction merchants.
Today online wallet company Paytm has waved off transfer to bank account charge which was 4% till 31st December 2016. It is a welcome step but it came 13 days after demonetization. Government should make a law which prohibit banks and online wallet companies from charging commission to merchants. The merchants who are accepting credit/debit cards have increased price of the commodities because other shops who don't accept credit/debit card are not in competition. The merchants who have started accepting credit cards recently have increased price of commodities to cover for commission they need to pay to banks for transactions.
I was lucky enough to withdraw 2500 rupee from ATM from my two account because luckily I found one ATM which was being refilled and I happen to be a earlier few customers. After that I am not able to find a working ATM or a bank with cash to dispense. I am left with 200 rupee with me now.
After visit to hospital I went to Kotak Mahindra Bank, Sector-18, Noida to withdraw 10000 rupee from my saving account. I reached the bank at 12:00 PM and I found that no one with withdrawal request was being allowed inside the bank because bank did not have any cash to dispense. None of the ATM were working. This place have more than 20 ATMs but none of them was working.
Banks are not dispensing the cash they are having with them to force people to use online transactions and debit card/credit card payments. Banks are charging commission to merchants as high as 5% for accepting credit/debit card payments. Banks are having conflict of interest with dispensing cash from bank for which they don't get any commission. Banks don't dispense cash so that they can make money by commission from electronic transaction merchants.
Today online wallet company Paytm has waved off transfer to bank account charge which was 4% till 31st December 2016. It is a welcome step but it came 13 days after demonetization. Government should make a law which prohibit banks and online wallet companies from charging commission to merchants. The merchants who are accepting credit/debit cards have increased price of the commodities because other shops who don't accept credit/debit card are not in competition. The merchants who have started accepting credit cards recently have increased price of commodities to cover for commission they need to pay to banks for transactions.
I was lucky enough to withdraw 2500 rupee from ATM from my two account because luckily I found one ATM which was being refilled and I happen to be a earlier few customers. After that I am not able to find a working ATM or a bank with cash to dispense. I am left with 200 rupee with me now.
Friday, November 11, 2016
Currency change in India
On 8th November 2016 8:00 PM prime minister of India Narender Modi announced that old 500 rupee and 1000 rupee notes will be discontinued in 4 hours. I checked my wallet and found out that I had one hundred rupee note, a fifty rupee note and five 10 rupee note. So only 200 rupee with me. The banks and ATMs were shutdown for next day 9th November 2016 so I need to survive on 200 rupee only. Although patrol pumps, Hospitals and Medical Shops were allowed to accept 500 and 1000 rupee notes till 11th November 2016.
Luckily Mar car had enough patrol for next few days not everyone have a car to commute. Many people travel by auto and taxis for them 200 rupee will not be sufficient even for a day. This step of government was necessary for curbing black money and counterfeit notes so I thought that it is right step even if it create some inconvenience to people. Banks opened on 10th October 2016 but ATMs were closed. Banks were exchanging up to rupee 4000 per person. I asked my wife to go to bank and get the money exchanged but she could not go to bank due to heavy rush in the bank. I still thought that banks and government are doing their best to serve people and at least some people are getting money. But later I came to know that banks are giving two 2000 rupee notes for 4000 rupee. A 2000 rupee note is too big a denomination to bring liquidity into market. 500 rupee notes are already out of market and for converting a 2000 rupee note to change 20 hundred rupee notes will be required. If a person buy 200 rupee products from market he will get 18 hundred rupee notes in return. Shopkeeper will not be having that much change. So 2000 rupee notes are bringing no liquidity to market.
For first few days government should issue only 100 rupee notes and new 500 rupee notes in market to restore liquidity into market but it is doing opposite of it. This is wrong and government should have planned better. It is issuing 2000 rupee notes into market. 2000 rupee notes should be issued later on when government raises withdrawal limit on bank accounts. Some people are saying that great economists have taken this decision and I don't understand economics so I should not criticize decision of great economists. But I feel that these economist who feel that 2000 rupee note with curb black money and 500 rupee note will encourage corruption are fools. Economics is not rocket science which only few people know and kept a top secret. Economics is something which everyone understand. Issuing 2000 rupee note for first few days is a bad decision and it is producing liquidity crunch in market.
Now few thing on how I am surviving with 200 rupee. I borrowed 600 rupee from my son's piggy bank. One of our neighboring shopkeeper is still accepting 500 rupee note and we are buying milk from him. This might be illegal but it is necessary for maintaining liquidity in market. I support government's decision to change the currency note but government should infuse liquidity in market by issuing 100 rupee and 500 rupee notes instead of 2000 rupee note.
Luckily Mar car had enough patrol for next few days not everyone have a car to commute. Many people travel by auto and taxis for them 200 rupee will not be sufficient even for a day. This step of government was necessary for curbing black money and counterfeit notes so I thought that it is right step even if it create some inconvenience to people. Banks opened on 10th October 2016 but ATMs were closed. Banks were exchanging up to rupee 4000 per person. I asked my wife to go to bank and get the money exchanged but she could not go to bank due to heavy rush in the bank. I still thought that banks and government are doing their best to serve people and at least some people are getting money. But later I came to know that banks are giving two 2000 rupee notes for 4000 rupee. A 2000 rupee note is too big a denomination to bring liquidity into market. 500 rupee notes are already out of market and for converting a 2000 rupee note to change 20 hundred rupee notes will be required. If a person buy 200 rupee products from market he will get 18 hundred rupee notes in return. Shopkeeper will not be having that much change. So 2000 rupee notes are bringing no liquidity to market.
For first few days government should issue only 100 rupee notes and new 500 rupee notes in market to restore liquidity into market but it is doing opposite of it. This is wrong and government should have planned better. It is issuing 2000 rupee notes into market. 2000 rupee notes should be issued later on when government raises withdrawal limit on bank accounts. Some people are saying that great economists have taken this decision and I don't understand economics so I should not criticize decision of great economists. But I feel that these economist who feel that 2000 rupee note with curb black money and 500 rupee note will encourage corruption are fools. Economics is not rocket science which only few people know and kept a top secret. Economics is something which everyone understand. Issuing 2000 rupee note for first few days is a bad decision and it is producing liquidity crunch in market.
Now few thing on how I am surviving with 200 rupee. I borrowed 600 rupee from my son's piggy bank. One of our neighboring shopkeeper is still accepting 500 rupee note and we are buying milk from him. This might be illegal but it is necessary for maintaining liquidity in market. I support government's decision to change the currency note but government should infuse liquidity in market by issuing 100 rupee and 500 rupee notes instead of 2000 rupee note.
Friday, November 4, 2016
Suicide by ex-army man and OROP row
Retired Army man Ram Kishan Grewal committed suicide on November 2, 2016 because he was getting less pension.
The 70-year-old ex-serviceman was involved in a protest for implementation of the promised OROP scheme. He was leading a protest and reportedly reached Delhi on Monday to meet the defence minister with an application stating that despite the implementation of the OROP, the soldiers have not received the increased pension as per the sixth and seventh pay commission along with the due arrears.
He committed suicide by ingesting “Sulfas”, a pesticide, while he and 10 others were returning to Jantar Mantar on Tuesday after failing to meet Lok Sabha Speaker Sumitra Mahajan and defence minister Manohar Parrikar over the non-implementation of OROP. He died later that day at RML Hospital.
Grewal was working for social welfare and had won several accolades for his contribution to social service and for changing the face of his village ‘Bamla’ in Haryana. He was also awarded the ‘Nirmal Gram Puruskar’ by the then President, Pratibha Patil, in 2008.
Bamla village became the first few ‘Nirmal Grams’ in Haryana. The government of India had launched this award for fully sanitised and open defecation-free Gram Panchayats in 2003 and gave away the first awards in 2005 as a component of its flagship scheme ‘Total Sanitation Campaign’.
It is difficult to believe that such a man will commit suicide without fighting for his rights. His suicide shows that he lost all hopes for getting his dues. Government is coming up with excuses that it was calculation error on part of State Bank of India. But why did it happen? Why was error not corrected even after repeated requests from ex-serviceman? Why was bribe demanded from ex-serviceman for correcting calculation error? Why did ministers of Modi government refused to meet ex-serviceman? Why have government not taken any action against officials responsible for calculation mistake? These are some questions which needs to be answered. Why should we not hold prime minister responsible for this calculation mistake which took life of an ex-serviceman when we give credit of any street being cleaned by sweepers? We don't say that street was cleaned by sweepers and PM have nothing to do with it, we say that PM has put all procedures in place to force sweepers to do their duty instead. Now if PM has not put any check on corrupt officials of government and State Bank of India and allowed them to get bribe from ex-servicemen by doing deliberate calculation mistakes and correcting them only after getting bribe then why should he not be held responsible for it.
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