The Big Reverse

by Meera Sanyal

  a law was passed in 2015 for disclosure of foreign black money;

  agreements with many countries, including the USA, have been made to add provisions for sharing banking information;

  a strict law has come into force from August 2016 to curb benami transactions, which are used to deploy black money earned through corruption;

  a scheme was introduced for declaring black money after paying a stiff penalty;

  My dear countrymen,

  Through all these efforts, in the last two and a half years, we have brought into the open nearly 1 lakh 25 thousand crore rupees of black money belonging to the corrupt. Honest citizens want this fight against corruption, black money, benami property, terrorism and counterfeiting to continue. Which honest citizen would not be pained by reports of crores worth of currency notes stashed under the beds of government officers? Or by reports of cash found in gunny bags?

  The magnitude of cash in circulation is directly linked to the level of corruption. Inflation becomes worse through the deployment of cash earned in corrupt ways. The poor have to bear the brunt of this. It has a direct effect on the purchasing power of the poor and the middle class. You may yourself have experienced when buying land or a house, that apart from the amount paid by cheque, a large amount is demanded in cash. This creates problems for an honest person in buying property. The misuse of cash has led to artificial increase in the cost of goods and services like houses, land, higher education, health care and so on.

  High circulation of cash also strengthens the hawala trade which is directly connected to black money and illegal trade in weapons. Debate on the role of black money in elections has been going on for years.

  Brothers and sisters,

  To break the grip of corruption and black money, we have decided that the five hundred rupee and thousand rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016. This means that these notes will not be acceptable for transactions from midnight onwards. The five hundred and thousand rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper. The rights and the interests of honest, hard-working people will be fully protected. Let me assure you that notes of one hundred, fifty, twenty, ten, five, two and one rupee and all coins will remain legal tender and will not be affected.

  This step will strengthen the hands of the common man in the fight against corruption, black money, and fake currency. To minimise the difficulties of citizens in the coming days, several steps are being taken.

  Persons holding old notes of five hundred or one thousand rupees can deposit these notes in their bank or post office accounts from 10th November till close of banking hours on 30th December 2016 without any limit.

  Thus you will have 50 days to deposit your notes and there is no need for panic.

  Your money will remain yours. You need have no worry on this point.

  After depositing your money in your account, you can draw it when you need it.

  Keeping in mind the supply of new notes, in the first few days, there will be a limit of ten thousand rupees per day and twenty thousand rupees per week. This limit will be increased in the coming days.

  Apart from depositing your notes in your bank account, another facility will also be there.

  For your immediate needs, you can go to any bank, head post office or sub post office, show your identity proof like Aadhaar card, voter card, ration card, passport, PAN card or other approved proofs, and exchange your old five hundred or thousand rupee notes for new notes.

  From 10th November till 24th November the limit for such exchange will be four thousand rupees. From 25th November till 30th December, the limit will be increased.

  There may be some who, for some reason, are not able to deposit their old five hundred or thousand rupee notes by 30th December 2016.

  They can go to specified offices of the Reserve Bank of India up to 31st March 2017 and deposit the notes after submitting a declaration form.

  On 9th November and in some places on 10th November also, ATMs will not work. In the first few days, there will be a limit of two thousand rupees per day per card.

  This will be raised to four thousand rupees later.

  Five hundred and thousand rupee notes will not be legal tender from midnight. However, for humanitarian reasons, to reduce hardship to citizens, some special arrangements have been made for the first 72 hours, that is till midnight on 11th November.

  During this period, government hospitals will continue to accept five hundred and thousand rupee notes for payment.

  This is for the benefit of those families whose members may be unwell.

  Pharmacies in government hospitals will also accept these notes for buying medicines with doctors’ prescription.

  For 72 hours, till midnight on 11th November, railway ticket booking counters, ticket counters of government buses and airline ticket counters at airports will accept the old notes for purchase of tickets. This is for the benefit of those who may be travelling at this time.

  For 72 hours, five hundred and thousand rupee notes will be accepted also at Petrol, diesel and CNG gas stations authorised by public sector oil companies

  Consumer co-operative stores authorised by State or Central Government

  Milk booths authorised by State governments

  Crematoria and burial grounds.

  These outlets will have to keep proper records of stock and collections.

  Arrangements will be made at international airports for arriving and departing passengers who have five hundred or thousand rupee notes of not more than five thousand rupees, to exchange them for new notes or other legal tender.

  Foreign tourists will be able to exchange foreign currency or old notes of not more than `5000 into legal tender.

  One more thing I would like to mention, I want to stress that in this entire exercise, there is no restriction of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.

  Brothers and sisters,

  In spite of all these efforts there may be temporary hardships to be faced by honest citizens. Experience tells us that ordinary citizens are always ready to make sacrifices and face difficulties for the benefit of the nation. I see that spirit when a poor widow gives up her LPG subsidy, when a retired school teacher contributes his pension to the Swachh Bharat mission, when a poor Adivasi mother sells her goats to build a toilet, when a soldier contributes 57 thousand rupees to make his village clean. I have seen that the ordinary citizen has the determination to do anything, if it will lead to the country’s progress.

  So, in this fight against corruption, black money, fake notes and terrorism, in this movement for purifying our country, will our people not put up with difficulties for some days? I have full confidence that every citizen will stand up and participate in this ‘mahayagna’. My dear countrymen, after the festivity of Diwali, now join the nation and extend your hand in this Imandaari ka Utsav, this Pramanikta ka Parv, this celebration of integrity, this festival of credibility.

  I am sure that all political parties, all governments, social services organizations, the media and indeed all sections of the society will take part in this with enthusiasm and make it a success.

  My dear countrymen,

  Secrecy was essential for this action. It is only now, as I speak to you, that various agencies like banks, post offices, railways, hospitals, and others are being informed. The Reserve Bank, banks and post offices have to make many arrangements at very short notice. Obviously, time will be needed. Therefore, all banks will be closed to the public on 9th November. This may cause some hardship to you. I have full faith that banks and post offices will successfully carry out this great task of national importance. However, I appeal to all of you to help the banks and post offices to meet this challenge with poise and determination.

  My dear citizens,

  From time to time, based on currency needs, the Reserve Ba
nk with the approval of the Central Government brings out new notes of higher value. In 2014, the Reserve Bank sent a recommendation for issue of five thousand and ten thousand rupee notes. After careful consideration, this was not accepted. Now as part of this exercise, RBI’s recommendation to issue two thousand rupee notes has been accepted. New notes of five hundred rupees and two thousand rupees, with completely new design will be introduced. Based on past experience, the Reserve Bank will hereafter make arrangements to limit the share of high denomination notes in the total currency in circulation.

  In a country’s history, there come moments when every person feels he too should be part of that moment, that he too should make his contribution to the country’s progress. Such moments come but rarely. Now, we again have an opportunity where every citizen can join this mahayajna against the ills of corruption, black money, and fake notes. The more help you give in this campaign, the more successful it will be.

  It has been a matter of concern for all of us that corruption and black money tend to be accepted as part of life. This type of thinking has afflicted our politics, our administration, and our society like an infestation of termites. None of our public institutions is free from these termites.

  Time and again, I have seen that when the average citizen has to choose between accepting dishonesty and bearing inconvenience, they always choose to put up with inconvenience. They will not support dishonesty.

  Once again, let me invite you to make your contribution to this grand sacrifice for cleansing our country, just as you cleaned up your surroundings during Diwali.

  Let us ignore the temporary hardship

  Let us join this festival of integrity and credibility

  Let us enable coming generations to live their lives with dignity

  Let us fight corruption and black money

  Let us ensure that the nation’s wealth benefits the poor

  Let us enable law-abiding citizens to get their due share.

  I am confident in the 125 crore people of India and I am sure country will get success.

  Thank you very much. Thanks a lot.

  Namaskar.

  Bharat Mata Ki Jai.

  Appendix 2

  SBI Ecowrap, 7April 2016

  Source: SBI website (https://www.sbi.co.in)

  Appendix 3

  RBI Circulars on Specified Bank Notes (SBNs)

  List of RBI Notifications Pertaining to Demonetization

  8 Nov 2016–30 March 2017

  Original Notifications can be viewed at: https://www.rbi.org.in/Scripts/NotificationUser

  No Date Circular No Contents

  1 8 Nov 16 RBI/2016–17/111 ATM closure/ restarting on 11 Nov

  2 8 Nov 16 RBI/2016–17/112 Demonetization announcement and Instructions to banks

  3 9 Nov 16 RBI/2016–17/113 Tourists can exchange up to `5000 at airports

  4 9 Nov 16 RBI/2016–17/114 Banks to remain open on Sat Nov 12 and Sun Nov 13

  5 9 Nov 16 RBI/2016–17/115 RBI sets ATM withdrawal limit at `2,000 per day per card up to 18 November 2016.

  6 10 Nov 16 RBI/2016–17/116 Payment systems to remain open on Sat Nov 12 and Sun Nov 13

  7 10 Nov 16 RBI/2016–17/123 Cash withdrawal limits of `10,000 per day/ `20,000 per week

  8 11 Nov 16 RBI/2016–17/124 Govt departments permitted to draw more than `10,000

  9 11 Nov 16 RBI/2016–17/125 Daily Reporting Formats for Bankers – 6 A

  10 11 Nov 16 RBI/2016–17/127 Issue of pre-paid instruments to foreign tourists

  11 12 Nov 16 RBI/2016–17/128 Modification of Daily Reporting Formats for Bankers 6 A revised

  12 13 Nov 16 RBI/2016–17/129 Modification of limits to 4500 exchange; 2500 ATMs, 24,000 OTC

  13 14 Nov 16 RBI/2016–17/130 Prohibiting Exchange at District Central Cooperative Banks

  14 14 Nov 16 RBI/2016–17/131 Expanding distribution locations for deposit and withdrawal of cash

  15 14 Nov 16 RBI/2016–17/132 Waiver of customer charges for ATMs till Dec 30, 2016

  16 15 Nov 16 RBI/2016–17/133 Indelible ink on the finger of the customers – Procedures

  17 16 Nov 16 RBI/2016–17/135 Insistence on PAN card for deposits > 50,000

  18 16 Nov 16 RBI/2016–17/136 Daily reporting requirements on SBNs

  19 17 Nov 16 RBI/2016–17/139 Exchange of cash limited to `2,000, only once per person

  20 18 Nov 16 RBI/2016–17/140 Limit on withdrawals at Point of Sale – `2,000

  21 20 Nov 16 RBI/2016–17/141 ATM withdrawal limit revised to `2,000

  22 21 Nov 16 RBI/2016–17/142 Current A/C and Overdraft A/C limits revised to `50,000/ week

  23 21 Nov 16 RBI/2016–17/143 60 days additional time to repay loans for small borrowers

  24 21 Nov 16 RBI/2016–17/145 Wedding withdrawal guidelines, procedures and documents

  25 21 Nov 16 RBI/2016–17/146 Revision of withdrawal limits for farmers and traders

  26 22 Nov 16 RBI/2016–17/147 Warning regarding fraudulent practices

  27 22 Nov 16 RBI/2016–17/148 Advisory to DCCBs to make cash available for Rabi crop

  28 22 Nov 16 RBI/2016–17/149 Wedding Circular modification

  29 22 Nov 16 RBI/2016–17/150 Instructions on limits for Pre-Paid Instruments (PPIs)

  30 23 Nov 16 RBI/2016–17/151 Stop accepting SBN deposits in Small Savings Schemes

  31 24 Nov 16 RBI/2016–17/153 Deposit of SBNs with RBI under Guarantee Scheme to decongest the storage facilities at banks

  32 24 Nov 16 RBI/2016–17/154 Instruction to meet Cash requirements of pensioners and Armed Forces Personnel

  33 24 Nov 16 RBI/2016–17/155 No further exchange of SBNs w.e.f. 24 Nov midnight

  34 25 Nov 16 RBI/2016–17/157 Foreign tourists limit for exchange `5000/week till Dec 15

  35 25 Nov 16 RBI/2016–17/158 Weekly limit of withdrawals incl. from ATMs `24,000/ week

  36 26 Nov 16 RBI/2016–17/159 Incremental CRR of 100 per cent on incremental deposits

  37 27 Nov 16 RBI/2016–17/160 Currency Chest Guarantee scheme

  38 28 Nov 16 RBI/2016–17/162 Extension of Chest Guarantee Scheme

  39 28 Nov 16 RBI/2016–17/163 Relaxation of cash withdrawal limits for those depositing new notes

  40 29 Nov 16 RBI/2016–17/164 Chest Balance Limit / Cash Holding Limit

  41 29 Nov 16 RBI/2016–17/165 Accounts under PMJDY – Precautionary limits

  42 1 Dec 16 RBI/2016–17/166 Advisory to banks to ignore Information from Unauthenticated Sources

  43 2 Dec 16 RBI/2016–17/169 Advisory on even Allocation of banknotes

  44 6 Dec 16 RBI/2016–17/173 KYC and Records for re-activation of Dormant accounts

  45 7 Dec 16 RBI/2016–17/174 Withdrawal of the Incremental CRR w.e.f. 10 Dec 16

  46 8 Dec 16 RBI/2016–17/176 Amendment to Master Direction (MD) on KYC guidelines

  47 8 Dec 16 RBI/2016–17/177 Amendment to Master Direction Circular 176

  48 9 Dec 16 RBI/2016–17/178 Technical Audit of Prepaid Payment Instrument issuers

  49 12 Dec 16 RBI/2016–17/179 Reporting guidelines for counterfeit notes detected

  50 12 Dec 16 RBI/2016–17/180 Reporting requirements for New notes received

  51 13 Dec 16 RBI/2016–17/181 Preservation of CCTV recordings

  52 15 Dec 16 RBI/2016–17/183 Compliance to Master Direction (MD) on KYC guidelines

  53 16 Dec 16 RBI/2016–17/184 Rationalisation of Merchant Discount Rate (MDR) for transactions up to `2,000/-

  54 16 Dec 16 RBI/2016–17/185 Reduction of charges for IMPS, USSD and UPI transactions

  55 16 Dec 16 RBI/2016–17/186 Foreign tourists limit for exchange `5,000/week till Dec 31

  56 16 Dec 16 RBI/2016–17/187 Notification of Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016

  57 16 Dec 16 RBI/2016–17/188 Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 – Operational Guidelines

  58 19 Dec 16 RBI/2016–17/189 Only one deposit >`5000, till Dec 30, to be accepted only after
questioning by 2 bank officers

  59 21 Dec 16 RBI/2016–17/191 Reversal of Circular 189, for KYC compliant accounts

  60 29 Dec 16 RBI/2016–17/200 Additional Working Capital Limits to Micro and Small Enterprises (MSEs)

  61 30 Dec 16 RBI/2016–17/201 Closure of SBN scheme – Accounting guidelines

  62 30 Dec 16 RBI/2016–17/202 Permitting White Label ATM Operators (WLAOs) to source cash from retail outlets

  63 30 Dec 16 RBI/2016–17/203 ATM withdrawal limit revised to `4500 per day

  64 3 Jan 17 RBI/2016–17/208 Foreign tourists exchange limit extended till Jan 31

  65 16 Jan 17 RBI/2016–17/213 ATM withdrawal limit revised to `10,000 per day, current accounts to `100,000 per week

  66 30 Jan 17 RBI/2016–17/217 Limits on ATM and Current account withdrawn, but not on Savings bank accounts

  67 8 Feb 17 RBI/2016–17/224 Limits on Saving Bank Accounts raised to 50,000 per week and withdrawn w.e.f. March 13, 2017

  68 30 Mar 17 RBI/2016–17/263 Foreign tourists limit for exchange withdrawn

  Appendix 4

  Source: Chief Minister of West Bengal, Ms Mamata Banerjee

  Courtesy: Derek O’Brien

  Notes

  Introduction

  1.‘Shun Independents, PM urges Mumbai’, The Indian Express dated 14 April 2009, https://indianexpress.com/article/cities/mumbai/shun-independents-pm-urges-mumbai/; ‘Independents are a spoiler: Manmohan Singh’, Hindustan Times dated 14 April 2009, https://www.hindustantimes.com/india/independents-are-a-spoiler-manmohan-singh/story-015B0fLQ5TV4TLrYqkLcqK.html

  2.RERA or The Real Estate (Regulation and Development) Act, 2016 is an act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector, to protect the interest of consumers in the real estate sector, and to establish an adjudicating mechanism for speedy dispute redressal. The RERA Bill was first introduced by the UPA II government in 2013. It was approved by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. Citation Act No 16 of 2016, Parliament of India.