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It didn't even succeed at that. The same data shows that households are keeping more of their savings as cash, rather than less. Much of the impact of demonet
by Lazare 8y ago
It didn't even succeed at that. The same data shows that households are keeping more of their savings as cash, rather than less.
Much of the impact of demonetization was experienced as an acute cash shortage, with restrictions on accessing money in bank accounts and difficulty withdrawing cash from ATMs, whereas actual cash could be exchanged relatively easily on the black market. The lesson learned was, quite correctly, not "keep your money in banks where it'll be safe from future demonetization attempts", but "keep your money out of banks where it'll be safe from future demonetization attempts".
It was a failure on every level.
- jstanley 8y agoI don't know. If people learned that banks are not a safe place to keep money, I'd say it was a win on at least some levels.
- vinceguidry 8y agoYou don't want people distrusting banks. Banks provide essential financial services and access to credit that's extremely expensive and risky to obtain elsewhere. A big part of what drives the shady payday loan industry in America is the poor's lack of access to the regular banking system.
- jstanley 8y agoCoincidentally I just woke up today to find that my own bank account has been locked. The customer service number just hangs up within the first minute. Tell me again why I should trust banks?
- vinceguidry 8y agoI didn't say that you should trust banks. I'm saying it's not good for society if people don't. You're painting the lack of trust as a win. It's not. It's a net loss for society.
- jstanley 8y agoI don't see how that is internally-consistent. If (?) you agree that it's a bad idea to trust banks, why do you think it's a good idea for everyone to trust banks? If banks are not trustworthy, everyone who distrusts banks is making the right call. More people making the right call is a net win for society. After all, all society is is a bunch of people.
- vinceguidry 8y agoI don't know how this isn't being communicated. It's not a bad idea for you if you don't trust your bank. It's bad for society if you don't trust your bank. I don't think you have an obligation to fix banks or trust banks that shouldn't be trusted. Banks should act in a way that engenders trust from their customers. Banks are not ordinary businesses, this is why they're regulated so heavily. Society needs more bank regulation so that people can trust them more. That is what I am arguing that is good for society.
- jstanley 8y agoGot it, thanks.
- suckerburg 8y agoPeople received text messages claiming their bank accounts will be frozen if they don't connect them with Aadhaar, anecdotally this has also increased distrust in banks.