In yet another massive transformational move, PM Modi has done it again. His decision to withdraw the old 500 & 1000 notes from the market on November 08, 2016 late evening came as a shock and left the masses with no choice than losing out on their night’s sleep.
With long queues outside the ATMs to deposit the old 500 & 1000 notes till late night to Business Tycoon Mukesh Ambani’s announcement of having their retail chains open till midnight accepting the old 500 & 1000 notes – all has led to a swarm of reactions arising out from various sectors of the economy.
The latest announcement of ceasing old 500 & 1000 notes as legal tender in PM Modi’s address to the nation, as an attempt to root out black money, corruption and terror financing is yet another chapter in the history, PM Modi plans to write for the country.
Only a common man knows whether PM Modi’s statement “Your money will remains yours. You need have no worry on this point” will do any good to them or not. There is no need to panic for the public, provided, all their money is accounted for.
The old 500 & 1000 notes are already withdrawn as legal tender from the market since midnight and has no value attached to it however that no where means that your liquid assets are all zero. The legal ways have been rolled out to assist general public to get their old 500 & 1000 notes exchanged for the new ones.
Considering the rush, the banks, ATMs and Post Offices are bound to encounter in the coming days, the news of all three not operational on November 9, 2016 is no surprise for all. With a long weekend ahead for the banks, hopefully all will be streamlined once the back becomes operational after this long weekend ahead.
What you can do?
First and foremost, don’t panic. If you are not holding any black money then you have all your money safe however it is just the transition phase where your routine activities would be affected for next few days till the time all falls in place. On the other hand, if you have been holding black money then for sure you must have already become an insomniac.
Following is a comprehensive pictorial representation of what happens ahead:
Highlights of this announcement
- Payment in denomination of 500 and 1000 rupee notes for hospital bills, medicines on valid prescription at govt. hospital, purchase of train, bus, and airline tickets, supplies at govt. cooperatives and milk booths and fuel pumps is allowed till November 11.
- There is no limit on payment through cheque, debit/credit cards, NEFTs, RTGS, IMPS, Internet Banking or mobile wallets.
- Any person can tender his old Rs 500 and Rs 1000 note through any bank or office of Reserve Bank of India and obtain credit into his respective bank account without any limit from November 11 till December 30 (50 Days).
- Notes of value upto Rs 4000/- cash can be exchanged over the counter of any bank or post office branch after showing valid ID proof.
- If a person himself cannot visit the branch (also applicable if the person is currently outside India) he may send his representative with a written authorisation with valid id proof of his representative while tendering the notes.
Valid ID proof can be any of the following:
- Aadhaar Card
- Driving License
- Voter ID card
- Pass Port
- NREGA Card
- PAN Card
- Identity Card issued by Government department or PSU’s to its staff.
- On Nov 9 and in some places on Nov 10, ATMs will not work. Banks will be closed to public on Nov 9.
- Further information is available at website rbi.org.in and control room telephone no. 022-22602201/022-22602944.
Impact on Economy
- Economy to take a hit as the demand in market will be reduced for short period of time
- Black money will be swiped from the economy
- Fall in property prices
- E-wallet apps will attract more users
- Down in demand of expensive wedding and parties
- Construction of new houses and commercial buildings will be affected
- Increase in VAT and Excise collection
- Inconvenience for common man for a few days
A lot more still to follow since when the macro level economy is involved, the things don’t settle down so soon.
PS: Parallel Black Money Market to curb this black money has already started– As the news have started pouring in, currently the Rs 500 denomination note is going at discount of Rs 100 in many cities as Chandigarh, Ambala. In Ludhiana the going rate has dipped to Rs 380 per Rs 500 note. As the trends appear to be pouring in, this market is going to be there till 30th December 2016 and the discount on face value may go up as the deadline approaches near.
In certain cities, jewelers are selling gold worth Rs 70000 at Rs 1 lakh against old notes