TRY FOR FREE

PM Modi's Surgical Strike on Black Money: A Great Push for Cashless India

Almost everyone (from the common man on the street to business houses to politicians) was taken by surprise with regard to yesterday’s decision by the government to withdraw old Rs. 500 and 1000 notes from the market. The prime minister said that such notes will become "mere paper." While I have been writing on this subject for last 8 months, this one step is truly a master stroke. So let’s look at what it means for all of us.

Mere Paper: This means that you cannot transact with old Rs. 500/1000 currency (except for emergency use cases like railway, bus tickets, Airport, Petrol Pump, etc. for next 72 hours) and they need to be deposited back to the bank till December 30, 2016, or maximum up to March 31, 2017.

So all those who currently hold huge piles of cash will be stuck in tough situation if:

  1. They deposit cash in a bank, it will be hard to justify it (considering the government recently closed the VDIS scheme) and can mean prosecution and tax implications. The IT department has already asked the banks to share the details of all those depositing money in excess of Rs. 2 lakh. Yes, there is absolutely no restriction on how much you can deposit in your account.
  2. They don't deposit it; it will be of no use.

Our Responsibility: Those who hold legitimate sources of income need not worry. However, we have an even bigger responsibility to educate and help the vulnerable (domestic help, security guard, driver, old parents living in other cities, etc.).

  • Help them exchange old notes. Help them understand that these notes can be deposited at the bank next door for their full value.
  • Give them extra cash for next two days till ATM queues get shorter.
  • Most importantly, talk to them why this change is important.
To continue reading, sign up for MEDICI Inner Circle and get free access for 30 days.
100,000+ FinTech professionals trust MEDICI Inner Circle to stay up to date on the latest in financial services.

RECOMMENDED