Re: [IAC#RG] Public Query on Demonetisation of Rs. 500 and Rs. 1000 OHD

While I hope and pray that the PM's exercise bears the much needed fruits, I agree with Shri Sarabjit that there is a process for remonetization, that is followed in developed countries. Sweden is currently under remonetization and have clearly spelled the schedule. You can send the bank the old money by post for exchange, which they do deducting some adminstrative expenses. 

Counterfeit notes is a serious problem which the remonetization move in the country can solve, but I sure it will restart soon, if our new currency notes do not have adequate security built in, which, from what I read in the news, is the case. I would like to be assured that I am wrong on this.

Money earned for which tax has not been paid, also known as 'unaccounted money' is present in all economies, though the percent varies. In India, it is large because of our attitude to not pay taxes, and our traditional cash based economy. In this context, unaccounted money will resurface in a very short while. 

The cash based economy has also exists because we don't like to pay our dues in time, persons who issue bouncing-cheques are not punished promptly. I doubt if this attitude will go with one remonetization! We may need regular demonetization. In that case currency with an expiry date may be a solution so that no one will hoard it. All this anxiety, long queues, man-hours lost .

MGR Rajan

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From: indiaresists-request@lists.riseup.net <indiaresists-request@lists.riseup.net> on behalf of Sarbajit Roy <sroy.mb@gmail.com>
Sent: Friday, November 25, 2016 11:25:57 AM
To: indiaresists
Subject: Re: [IAC#RG] Public Query on Demonetisation of Rs. 500 and Rs. 1000 OHD

 

Dear CA Chitranjan

Thanks for your courtesy.

Incidentally, we have about 2,000 CAs (also about 5,000 doctors, 3,000 engineers/scientists, 5,000 'faujis', 2,000 media persons)  on this mailing list, so we very greatly value contributions of subject experts.

There can be no 2 views that some very firm and prompt action was needed to be taken on the menace of Fake Indian Currency Notes (FICN) which was affecting the purchasing power of poor people, destabilising the economy, and affecting our national security.

The problem starts when people begin confusing this aforesaid noble objective with "black" money (ie. unaccounted money) and begin invoking patriotism for a purely routine technical currency flushing exercise.

I especially direct you to the BANK OF ENGLAND'S procedures for "remonetisation"

They give 8 months prior notice and accept anonymous bearer exchange, including by post.

The Bank of England also clarifies that genuine notes retain their face value for all time and can be exchanged free of cost by note holders, in post.

http://www.bankofengland.co.uk/banknotes/Pages/about/faqs.aspx#50

When IAC had approached RBI on 6.April 2015 (and even earlier also) requesting demonetisation of Rs. 500 notes and Rs. 1,000 notes of Mahatma Gandhi series, we did so because for FICN menace and for no other reason. We were promptly assured (repeatedly) by RBI that our demand was being seriously considered.

We are shocked to hear today that apparently Govt has filed some affidavit in SC that only Rs.400 cr of FICN are in circulation. If true, this is a completely untrue statement on part of Govt because around 15% of OHDs circulating in 'dehaat' (where banking is poor or non-existent) were very high quality fakes as per their own secret intelligence reports. Incidentally the Rs. 400 cr FICN estimate emanates from a completely unscientific study done in April-May 2016 by Indian Statistical Institute Kolkata essentially based on fake currency detected by 3 Private URBAN Banks - ICICI,  HDFC and Axis.

The other question is who is actually printing India's notes, and why they lack vital security features ?

It is common knowledge that today the civilised world is switching over to engineered polymer notes and all the paper based currency presses are lying under-utilised. I can very easily allege with basis that somebody high up in the present Govt has corruptly ordered the printing of notes by some international security printing cartels to exploit this artificial currency crisis they have created and will be earning thousands of crores by virtue of their monopoly supply over "legal tender" currency notes which are being routed through "mafia" of 4 banks in this racket, SBI, ICICI, HDFC and Axis.

Your views and those of our other CA members to my submissions will be appreciated.

sincerely

Sarbajit Roy

On Thu, Nov 24, 2016 at 2:18 PM, CA Chitranjan Bharadia <chitranjan@bharadiamaheshwari.com> wrote:

Dear Sarbajit

 

Thanks for your reply, I have not impugn your honesty/ integrity/ patriotism, however I admire you for your good work and salute you.

 

What forced me to write you that legally its correct and right that RBI has to pay to the bearer of the HDN, however if any person goes to RBI with 100 Cr, and ask for exchange or pay then also RBI will give, however he/ she has to give their identify / proof so that later various department can ask them, about how they received these currency, whether income tax was paid ? whether it was generated from illegal means etc... so its logic about it,

 

Yes, law is very much right that RBI has to pay, however I am not with you in this matter, whereby you wrote that you will not give your identify as it will motivate the people, who are having black money and they can move to the court, so I write you not to raise such issue

 

Thanks with Best Regards

 

CA Chitranjan Bharadia