Tag Archives: Banking

Can We have A world without debt?

Can we have a world without debt?


For anyone currently in debt, a world without debt probably sounds like a great solution. Some debts – like those between friends or family members – can easily be written off, or at least delayed. But what about debts from financial institutions or between governments? They may be a little more difficult to simply wipe the slate clean.

Is that even a position we want to be in? The whole concept of money is built around a model of debt. A world without debt would require a really drastic change, both economically and morally. It could spell financial ruin for smaller countries and would dramatically impact our everyday lives.

This Payplan infographic investigate the history of debt, the current position in the world and answer the question.



Do you think Debt itself is not evil.. ?

why this payplan infographic presenting Debt an essential system of modern economics. .?

Why they want to live your life in debts ?

Think and write 


source: https://www.payplan.com/can-we-have-a-world-without-debt/



Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015


Demonetized Indian Banking| What is this 5000 Rupees Deposit Rule

Demonetisation:  The new Rs.5000 rupees deposit Rule

Daily Labourers in India were accepting the demonetised currency as they can deposit them in banks till December 31.

Else in this cash crunch no where to go. 

In between The RBI on Monday has issued fresh guidelines on depositing demonetised high value currency notes of Rs. 1000 and Rs. 500. Here is what you need to know:

What is the new rule from RBI?

The Reserve Bank of India on Monday announced that deposits of more than Rs. 5000 of demonetised currency note will be allowed only once, till December 30. So if you have Rs.10,000 with you in Rs.1000 or Rs.500 notes, you will have to take it to the bank in one go. After that, you will not be able to make any more deposits of demonetised notes till December 30.

Does this mean I cannot deposit more than once?

If you have less than Rs. 5,000 in demonetised notes in your hand, you can spread it over any number of deposits.

Are there any new procedures for depositing more than Rs.5,000 in demonetised notes?

You will have to present your case of why you didn’t deposit them earlier, in the presence of at least two bank officials. If the officials find your response satisfactory, it will be accepted. But your bank account may be scrutinisied later at the time of audit.

What if I deposited Rs.4000 and later found two more Rs.1000 notes?

If the combined values of your deposits exceeds Rs. 5000, you will be subjected to the same procedure as when depositing more than Rs.5,000 once. And you will not be able to make any more deposits of demonetised till Dec.30 after that.

But how will a bank know if I have deposited Rs.4,000 earlier elsewhere?

Every time you deposit demonetised money, the bank alerts the CBS (core banking solution). If you deposit Rs. 4,000 as old notes today , you can deposit only Rs.1,000 more in old notes without being asked to give an explanation.

What is this KYC compliance clause?

The one-time deposits of over Rs.5,000 can be made only to KYC-compliant accounts. KYC, or Know your customer, is a business process to verify the identity of bank customers. Banks collect a valid identification proof and address proof and PAN card details of its customers periodically. Those who haven’t submitted these documents are KYC-non compliant. Such customers can deposit only up to Rs. 50,000 in demonetised notes.

I don’t have time to visit a bank. Can I send someone on my behalf?

Yes, you can. You have to provide suitable authorisation to the bank and the person depositing the amount should show approved identification. You still have to send a written explanation as to why you didn’t make the deposit earlier.

I have more than Rs. 5000 in cash. But they are not demonetised currency notes…

There is no restriction on currency notes that are legal tender.

I have unaccounted money worth more than Rs.5000 and I am planning to disclose it under the new declaration scheme. What should I do now?

These restrictions do not apply to deposits made under the government’s new income declaration scheme, the Pradhan Mantri Garib Kalyan Yojana 2016. You have to deposit 25 per cent of total declared unaccounted money to the Pradhan Mantri Garib Kalyan Yojana, a scheme with a four-year lock in period with no interest.

I lost track of all rules related to demonetised money. A quick recap please.

Government has demonetised Rs. 1000 and Rs.500 currency notes with effect from November 8 midnight. Though the government had earlier made some exemptions, these notes have ceased to be legal tender and are not being accepted anywhere from December 15. If you still have them, they can be deposited in your accounts in nationalised and private-sector banks till December 30. 

After that, the Reserve Bank will continue to accept these notes directly till March end after getting a declaration.. 

But there is a question  “who’s going to believe this”.

People have lost their trust in the Government, RBI and the Banks ironically in the matter of finance.

Read further:
Indian Government has No Clues of Black Money in India
Cashless Monetary System means Absolute Power over you



Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Indian Government must bring legal clarity to demonetization-masked compulsory deposits

Government must Bring Legal clarity to Demonetization-masked Compulsory Deposits


PROVIDE 100% insurance cover for bank deposits

The Scheme of compulsory deposit is somewhat novel and unorthodox, which we have had to undertake in the situation created by the Emergency.”


This is not a peek from our beloved Prime Minister Narendra Modi ‘s wished-for reply to Rajya Sabha debate on demonetization. This quote is from the speech given by Late Morarji Desai, Finance Minister, in Lok Sabha during April 1963 while moving the Compulsory Deposit Scheme (CDS) Bill.

The difference between the previous CDS’ (1963 & 1974 ones), and the present one, is as big as the gulf between democracy-cum-cooperative federalism and dictatorship-cum-State trickery.

Demonetization of Rs 500 and Rs 1000 notes is a fig leaf for unannounced compulsory deposit of citizens’ all savings, implemented without imposing emergency of any type. This open-ended CDS is not provided for by any law, unlike the two previous ones for which specific laws were enacted.

Moreover, the Government has inflicted a surgical strike of austerity that has left millions underfed. It has rendered millions jobless. It has reduced vibrant life to a battle for survival.


The Demonetization-induced deaths and injuries has no parallels in the modern history.

The cumbersome procedure for withdrawal of Rs 2.5 lakh for meeting marriage expenditure by either groom or bride family reeks of Guest Control Order of the sixties & seventies.

Imposition of austerity on masses under the garb of fighting black money is a masterstroke.

It has enabled Government to abdicate its responsibility to cut its own expenditure and delay further disclosure of reports of Expenditure Management Commission (EMC).

Modi Government has cleverly packaged informal CDS as an integral component of demonetization. This has emboldened its supporters like Baba Ramdev to dub any criticism of banking mess as anti-national, pro-black money and pro-corruption.

Demonetization-camouflaged CDS has put public savings at gravest risk in India’s history. If any bank where demonetized notes have been deposited fails or is de-registered by RBI, the depositor would get paltry refund of Rs 1 lakh, even if his all deposits including fixed ones aggregate to Rs 1 crore.

This ceiling applies to depositor’s different accounts in all branches of the same bank. This ceiling has not been revised since 1993!

Modi regime has not even implemented UPA Government’s belated decision to double the deposit insurance cover ceiling to Rs 2 lakh per depositor per bank. While maintaining deafening silence on this issue, NDA Government speeded up its agenda to sell dreams to Aam Aadmi, the latest being illusionary benefits that would accrue to poor because of demonetization.

The flaws in CDS, including its brutal assault on fundamental rights of citizens, can be grasped well by recalling the previous CDS’. During 22 years of CDS ending 1 April 1985, neither economic growth accelerated nor society got reformed. Nor poverty got eradicated. Nor people developed special saving habit.

Announcing the intent to introduce CDS in his budget speech for 1963-64, Mr. Desai stated: “Like taxation, compulsory saving will restrain demand in the immediate future; whereas unlike taxation, it would provide an earning asset to the people and generally help in inculcating the saving habit in the country.”

He added: “Once the Nation imbibes the habit of saving regularly, it would have laid the foundation for its future prosperity and well-being. In fact, I would seek savings not only as an individual but as a national virtue.”

The scheme was applied to different sections of society including the ones with income below the threshold income tax level. The citizens were thus required to deposit a small part (3% in most cases) of monthly income in CDS accounts. The 4-percent interest bearing CDs were fixed deposits of five-year duration.

The Centre shared proceeds of CDS with the States, which were consulted in advance for their approval for the proposed scheme.

The Congress Government even sought Attorney General of India’s (AGI’s) opinion on CDS. In his opinion dated 28 th April 1963, the then AGI C. K. Daphtary, steered clear of issue regarding breach of fundamental rights by limiting his conditional opinion only to compulsory acquisition of money by the Government as violation of the Right to Property.

AGI appeared in Lok Sabha to answer questions put by MPs but was not invited to appear before Rajya Sabha, where some MPs from legal profession wanted to grill him.

The issue here is not AGI’s outdated opinion but the fact that the Government of the day followed democratic procedures and conventions before launching CDS.

The 1974 CDS was introduced through two diktats – The Compulsory Deposit Scheme (Income-tax Payers) Ordinance and The Additional Emoluments (Compulsory Deposit) Ordinance.

The later Ordinance was dubbed as “most obnoxious” by BJP veteran, L.K. Advani during July 1974 while condemning ordinance spree resorted to Mrs. Indira Gandhi Government. When will Mr. Advani speak on Mr. Modi’s informal CDS, which is hurting law-abiding citizens thousand times more the pain caused by legal CDS.

This brings us to core issue: Which law the Government has invoked to introduce deemed CDS and public expenditure control? All gazette notifications relating to banking restrictions and rationing of people’s hard-earned money to public have been issued “In exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934.”

This sub-section reads as: “On recommendation of the Central Board the [Central Government] may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender.”

This provision does not envisage rationing of depositors’ money. There might be other provisions under different banking laws under which such restrictions could be imposed.

This and several other legal complexities are expected to be clarified by the Government in its submissions to the Supreme Court and High Courts that are flooded with petitions against botch demonetization.

Meanwhile Indian Government also imposed restrictions on gold holding by individuals. Government want the public to hold paper gold.

Coming back to demonetization-enhanced risk to public’s savings, the percentage of protected bank accounts to total accounts has declined from record 96.5% in 1991 to 92.35% in 2015-16, according to RBI subsidiary, Deposit Insurance and Credit Guarantee Corporation (DICGC).

It is surprising that neither Mr. Modi nor Finance Minister Arun Jaitley have spoken on the need for providing full protection to all bank accounts during their regular sermons on financial inclusion.

NDA Government must explain to the Nation its reluctance to double the insurance cover cap to Rs 2 lakh, a decision taken by UPA in 2012-13.

NDA washed its hands off from this decision. Answering a question in Lok Sabha on 8 th May 2015, the Minister of State for Finance stated: “At present, there is no proposal to increase the existing deposit insurance cover of Rs.1 lakh.”

Keeping in view grave danger posed to banking system, Modi Government should enhance

deposit insurance cover from present ceiling of Rs one lakh to 100% insurance cover for the deposit of any value.

The issue of hiking insurance cover for hapless depositors has been studied by a few committees over the years. The last panel named Committee on the Differential Premium System for the Banks in India, observed: “In India, there has been a persistent demand from stakeholders and public representatives in the recent past for a hike in deposit insurance cover from the current level of Rs.0.1 million.”

In its report submitted during September 2015, the Committee stated: “A hike in cover without calibrating the premium rates to the risk profile of the insured banks only exacerbates the moral hazard. Recognizing this, it has been felt that introduction of RBP may be taken up to make ground for considering raising the insurance cover from the present ceiling of Rs 0.1 million.”

Let the Government walk the talk on Demonetization’s benefits for the poor by providing for 100% deposit insurance cover.

NDA also needs to separately explain why it has reduced the serious challenge of tackling black money to a cat-and-mouse game. It has to realize that it is doing the same mistake that Vajpayee Government did by amending High Denomination Bank Notes (Demonetisation) Act, 1978 to reintroduce Rs 1000 notes.

The Act says: “Whereas the availability of high denomination bank notes facilitates the illicit transfer of money for financing transactions which are harmful to the national economy or which are for illegal purposes and it is therefore necessary in the public interest to demonetise high denomination bank notes.”

(The Act in its ordinance form had demonetized Rs 1000, 5000 and 10,000 notes).

In 1998, several MPs had cautioned the Government to not to re-introduce Rs 1000 notes as Rs 500 notes were already been counterfeited in Pakistan and elsewhere and flooded into Indian economy.

As put by P.C. Chacko in Lok Sabha during December 1998, “What is the security of our monetary system? Now fake notes are being printed outside and then smuggled into India.The Government does not have any account. The Government does not have any control. The Heavens are not going to fall if Rs. 1,000 notes are not printed (read re-introduced) tomorrow; and no common man will die of starvation.”

Modi Government has now introduced Rs 2000 note, which would benefit more the corrupt and tax evaders in India and printers of fake notes than Aam Aadmi.

Good governance and common sense requires the authorities to first explain to the public all dimensions of hydra-headed black economy and corruption. The Government should have listed all options required to attack the twin malaise that have not been eradicated so far in any country.

The Government should tone down its political rhetoric on dubious benefits of demonetization. It ought to set up an independent commission to compute the net benefit/loss of demonetization-cum-CDS-cum-public expenditure control to common man and economy.

Simultaneously, it should make public UPA-commissioned three studies on black money and complete five reports of Justice Shah panel on black money. The Government should complement these efforts by issuing an action not taken report on recommendations of various committees on black money and corruption.

The Government should realize that the high moral ground, on which it is standing , would ultimately turn out to be sand, if not quicksand.

excerpts taken from the article of:

Naresh Minocha, Consulting Editor


  more to come..

Rupee Falls To Near Record Low


Supreme Court of India To Hear Challenge To Demonetization On December 2


The Trouble With India’s Demonetization Gamble


Demonetization and Freakonomics




Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Supreme Court of India To Hear Challenge To Demonetization On December 2

Supreme Court of India will Hear the Challenge To Demonetization On 2nd December 2016

To remind the Government and the Policy Makers that the Constitution and the right to justice is alive in India, the Supreme Court of India accepted the petition and will Hear Challenge To Demonetization On December 2, 2016.
It will be a double blow for the BJP Government after former Prime Minister Manmohan Singh‘s Speech in Parliament denouncing the government’s ban on 500 and 1000 rupee notes as a “monumental management failure”,  he also warned that the move will drag down the country’s GDP growth by 2 per cent.
The Supreme Court will hear on December 2 the challenge to the constitutional validity of the demonetization decision and the inconvenience caused to the people due to it.
A bench of Chief Justice T.S. Thakur and Justice D.Y. Chandrachud initially said it would first hold a hearing on the inconvenience faced by the public and steps taken to address them.


It said that hearing on the validity of the note ban could take place later. The the apex court later agreed to hold hearing on both the aspects.

Earlier the former prime minister, who is also a noted economist warned “The GDP of the country will decline by about 2 per cent by what has been done. And this is an underestimate and not an overestimate.” 

“What has been done can also weaken our people’s confidence in the currency and banking system,” added Dr Singh, a former chief of the Reserve Bank of India, stating that small businesses, farming and cooperative banking have been affected the most by demonetization.

Now the time has come when the people of India will hear a fruitful official debate on demonetization, so wait for December 2, 2016.

Read further:

Why BJP Govt’s Demonetization Move Is An Absolute Disaster


Demonetisation Loot And Plunder Says Manmohan Singh


The cash crunch may paralyse economic activities in India


Demonetization may leads to Riots On The Streets in India


Rupee Falls To Near Record Low




Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015