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Even for those with bank accounts, it is a huge mess. ATMs are rarely filled, and when they do, empty in an hour. You can only withdraw about 35$ worth of money

Even for those with bank accounts, it is a huge mess. ATMs are rarely filled, and when they do, empty in an hour. You can only withdraw about 35$ worth of money a day from ATMs, and about 200$ worth per week by cheque. People have to wait (literally) hours to draw their daily 'allowance'or convert the old notes into new ones. Hundreds of thousands of ATMs need hardware (the new currency notes are different in size so the existing dispensers need to be replaced) and software (to dispense only fixed quantities of new notes). The latter is being programmed literally on the fly, and is quite buggy. Meanwhile politicians and others who've been sitting on huge piles of money are getting it 'washed'/converted into legal money through a mind boggling array of creative schemes. The people who are suffering are those with 'normal' cash flows, from salaries etc, on which taxes have already been paid. This may or may not have been a good idea in the abstract, but the implementation is a huge huge mess. [1] Public anger is beginning to rise [2], and many black jokes are going around that have the theme, "The Prime Minister made a dramatic announcement, then went to Japan to ride on high speed trains. We citizens are so screwed". This is being applauded by people of Indian origin who don't live in India. As I said above, the idea seems good in the abstract, but the execution is terrible. Personal Experience: I had to wait 3 hours + in Bangalore to get 35$ worth of small note currency. [1] From the same source as the OP http://www.firstpost.com/india/rs-500-rs-1000-ban-it-is-the-common-man-who-is-affected-and-his-anger-is-showing-3101862.html http://www.firstpost.com/india/rs-500-rs-1000-ban-it-is-the-... [2] a mainstream newspaper discussing how police is being deployed to protect bankers from the public http://indianexpress.com/article/india/india-news-india/delhi-police-deploys-more-forces-outside-banks-to-control-crowds-4371829/ http://indianexpress.com/article/india/india-news-india/delh...

fractalb 10y ago
> You can only withdraw about 35$ of money a day from ATMs, and about 200$ per week by cheque Dollars? in India? It should have been 'rupees' right?
- plinkplonk 10y ago
  expressed in dollars for easy understanding of the HN audience. I should have said 35 $ worth. Edited.
  - user5994461 10y ago
    Well, you just made it harder to understand. $35 is a pack of big macs in the SV. It could be days/weeks/months??? of revenues for a remote village in Indian. A dollar figure doesn't tell about the costs of living, it's misleading at best, manipulation at worst. And we don't know the exchange rate either. So how many Rs 500 note is $35... not a clue.
    - z92 10y ago
      > So how many Rs 500 note is $35... not a clue. From another comment, I assume 5 notes should make $35.
    - plinkplonk 10y ago
      exchange rate: 1 USA $ = approx 70 Indian rupees. fluctuates a bit. the point was that it is a small amount. I wrote in a hurry, sorry. had a long tiring day.
mandeepj 10y ago
> getting it 'washed'/converted into legal money through a mind boggling array of creative schemes. care to share these creative schemes ?
- kamaal 10y ago
  1. Go to your jeweler and ask them to sell gold with a predated receipt. 2. Pay loans to small time farmers at a discount and have change that at the bank. 3. Buy cars at pre dated receipts for your relatives etc. 4. Invest in innovative chit fund schemes/pygmies. etc etc. White wash jugaad's are plenty.
  - mandeepj 10y ago
    Nothing wrong with daydreaming or living in your own bubble because 1. Go to your jeweler and ask them to sell gold with a predated receipt. > Jewelers are getting raided now 2. Pay loans to small time farmers at a discount and have change that at the bank. > Too much labor work here and nothing much to gain 3. Buy cars at pre dated receipts for your relatives etc. > How many cars you can buy? 5? No benefits here. And, you think you can get predated receipts just like that? 4. Invest in innovative chit fund schemes/pygmies. > Also not much to gain here. Looks like you are thinking about common man here. Instead think about people who have at least 30 crores of black money. They are the ones who are hit hard by this govt plan. They are never going to go out and deal with peanuts.
    - kamaal 10y ago
      Its already happening full scale in Tier 2 towns with the help of Police and Income tax officials(who themselves have black cash). Indian Jugaad knows no bounds. For every lock there are keys.
- plinkplonk 10y ago
  >care to share these creative schemes ? no, because these were private conversations, by people who trust me to keep my mouth shut, about ongoing operations. Suffice to say many powerful people in the government are involved. Maybe sometime in the future, when all this madness is behind us.
shubhamjain 10y ago
It's apparent that execution left many things unconsidered. Having a high-denomination bill (Rs. 2000), which is practically useless for most purchases, and insufficient quantity of the low-denomination bills (Rs 100), is as bad as it gets; the transition is going to fairly painful for the whole population. That being said, I would avoid lamenting the troubles of middle-class and poor when the rich are going to be unscathed. It's true that some leaks would impossible to plug, and people would find clever ways to get some of their money through, a great deal of ill-gotten riches is going to affected by this. It'd be almost impossible to launder monstrous amount of cash that sits inside coffers of those who invariably assumed that they were immune; the mandated limits simply make it impractical. When you're buying a house in India, there is no way you can go about it in honest means. The seller would usually ask half the amount being handed in cash to avoid taxes. Almost everywhere, a large slew of businesses always avoid paying any kind of tax. The pattern is so ingrained that it's almost become a habit. And this is only tip of the iceberg — political donations, bribes, illegal trades, hawala all stem from the same thing. Maybe I am speaking from an ivory tower, but if this instills a good habit in minds of people — of being part of a transparent economy — probably the benefits would far outweigh the cons.
- webtechgal 10y ago
  > but if this instills a good habit in minds of people — of being part of a transparent economy... Noble thought but unfortunately, not likely to happen. At least, not at a scale large enough to make any difference. IMO, the only way that an effective change could come about is cleansing of the political/bureaucratic/governmental systems - and corrupt ways there of - and the current actions will only go to boost those (ways) even further.
agnivade 10y ago
> Personal Experience: I had to wait 3 hours + in Bangalore to get 35$ worth of small note currency. Not trying to argue about this. But I had Rs 75 in my wallet when the announcement was done, and since then I never had to go to an ATM. Didn't have any problems whatsoever. I have monthly account books running in vegetable and grocery shops. And they have given their account nos. The only time there was an issue was at the barber shop, where I offered to pay by paytm, but the guy said to pay later. So yea, I haven't had to go to an atm, and I don't think I need to unless there comes a pressing need. EDIT: grammar

fractalb 10y ago

> You can only withdraw about 35$ of money a day from ATMs, and about 200$ per week by cheque Dollars? in India? It should have been 'rupees' right?

plinkplonk 10y ago
expressed in dollars for easy understanding of the HN audience. I should have said 35 $ worth. Edited.
- user5994461 10y ago
  Well, you just made it harder to understand. $35 is a pack of big macs in the SV. It could be days/weeks/months??? of revenues for a remote village in Indian. A dollar figure doesn't tell about the costs of living, it's misleading at best, manipulation at worst. And we don't know the exchange rate either. So how many Rs 500 note is $35... not a clue.
  - z92 10y ago
    > So how many Rs 500 note is $35... not a clue. From another comment, I assume 5 notes should make $35.
  - plinkplonk 10y ago
    exchange rate: 1 USA $ = approx 70 Indian rupees. fluctuates a bit. the point was that it is a small amount. I wrote in a hurry, sorry. had a long tiring day.

mandeepj 10y ago

> getting it 'washed'/converted into legal money through a mind boggling array of creative schemes. care to share these creative schemes ?

kamaal 10y ago
1. Go to your jeweler and ask them to sell gold with a predated receipt. 2. Pay loans to small time farmers at a discount and have change that at the bank. 3. Buy cars at pre dated receipts for your relatives etc. 4. Invest in innovative chit fund schemes/pygmies. etc etc. White wash jugaad's are plenty.
- mandeepj 10y ago
  Nothing wrong with daydreaming or living in your own bubble because 1. Go to your jeweler and ask them to sell gold with a predated receipt. > Jewelers are getting raided now 2. Pay loans to small time farmers at a discount and have change that at the bank. > Too much labor work here and nothing much to gain 3. Buy cars at pre dated receipts for your relatives etc. > How many cars you can buy? 5? No benefits here. And, you think you can get predated receipts just like that? 4. Invest in innovative chit fund schemes/pygmies. > Also not much to gain here. Looks like you are thinking about common man here. Instead think about people who have at least 30 crores of black money. They are the ones who are hit hard by this govt plan. They are never going to go out and deal with peanuts.
  - kamaal 10y ago
    Its already happening full scale in Tier 2 towns with the help of Police and Income tax officials(who themselves have black cash). Indian Jugaad knows no bounds. For every lock there are keys.
plinkplonk 10y ago
>care to share these creative schemes ? no, because these were private conversations, by people who trust me to keep my mouth shut, about ongoing operations. Suffice to say many powerful people in the government are involved. Maybe sometime in the future, when all this madness is behind us.

shubhamjain 10y ago

It's apparent that execution left many things unconsidered. Having a high-denomination bill (Rs. 2000), which is practically useless for most purchases, and insufficient quantity of the low-denomination bills (Rs 100), is as bad as it gets; the transition is going to fairly painful for the whole population. That being said, I would avoid lamenting the troubles of middle-class and poor when the rich are going to be unscathed. It's true that some leaks would impossible to plug, and people would find clever ways to get some of their money through, a great deal of ill-gotten riches is going to affected by this. It'd be almost impossible to launder monstrous amount of cash that sits inside coffers of those who invariably assumed that they were immune; the mandated limits simply make it impractical. When you're buying a house in India, there is no way you can go about it in honest means. The seller would usually ask half the amount being handed in cash to avoid taxes. Almost everywhere, a large slew of businesses always avoid paying any kind of tax. The pattern is so ingrained that it's almost become a habit. And this is only tip of the iceberg — political donations, bribes, illegal trades, hawala all stem from the same thing. Maybe I am speaking from an ivory tower, but if this instills a good habit in minds of people — of being part of a transparent economy — probably the benefits would far outweigh the cons.

webtechgal 10y ago
> but if this instills a good habit in minds of people — of being part of a transparent economy... Noble thought but unfortunately, not likely to happen. At least, not at a scale large enough to make any difference. IMO, the only way that an effective change could come about is cleansing of the political/bureaucratic/governmental systems - and corrupt ways there of - and the current actions will only go to boost those (ways) even further.

agnivade 10y ago

> Personal Experience: I had to wait 3 hours + in Bangalore to get 35$ worth of small note currency. Not trying to argue about this. But I had Rs 75 in my wallet when the announcement was done, and since then I never had to go to an ATM. Didn't have any problems whatsoever. I have monthly account books running in vegetable and grocery shops. And they have given their account nos. The only time there was an issue was at the barber shop, where I offered to pay by paytm, but the guy said to pay later. So yea, I haven't had to go to an atm, and I don't think I need to unless there comes a pressing need. EDIT: grammar