Posts tagged "cashless"

50 (ish) Things I Learned After Demonetisation

It’s been 50 days since Indian Prime Minister Narendra Modi appeared on TV and gave the nation a collective heart attack. Demonetisation took out 86% of the cash value from circulation. Imagine that. All the money you had at home turned into worthless paper until you went to a bank and deposited it all, declaring everything you have to the income tax department. Since then, exactly zero rioting has broken out and the political opposition is still figuring out how it feels about this whole thing.

I, on the other hand, have experienced many highs and lows from demonetisation. Here’s 50 (ish) things that I have learned since 8th November.

1. Not everything circulated on Whatsapp groups is a baseless rumour

Oh I get so mad when people forward stupid rumours and conspiracy theories on Whatsapp. They don’t bother taking a quick moment to consider whether what they are forwarding is true or even do a quick Google search to see if any respectable media outlet has reported the ‘news’ that’s been forwarded.

Imagine my surprise when I found out that it was real and happening (and the humble pie I had to eat having first berating people for sharing such nonsense).

2. News spreads fast, like, seriously fast

Whatsapp aunties and uncles1 as I like to call them – you know the ones, they know a friend who has a cleaner who has a brother who works as a driver for the secretary of a politician in that party and they have it from the source that she was poisoned! It’s all a conspiracy.

Well, this Whatsapp aunty and uncle network wasted no time disseminating the news far and wide to the 300 groups they are a part of. We were eating in a restaurant at the time the announcement was made and within minutes things turned to a hushed silence as the news reached each table.

1 Aunties and uncles generally means someone middle aged in India – or anyone who is significantly elder to you.

3. Jewellery shops don’t always stay open ’till gone midnight, but when they do, you can be sure that it’s because of demonetisation

Had you visited T-Nagar or Cathedral Road in Chennai at midnight on the day of the demonetisation announcement, you could be forgiven for thinking it was peak Diwali time. Crowds were thronging the stores to buy gold with their soon to be worthless notes. You can’t buy much with gold, but one Government sure as hell can’t declare it to have no value overnight.

4. I really miss those 500 rupee notes

Before demonetisation it was really annoying when you withdrew 500 rupees from an ATM and you got a single note. Now I long for those happy, carefree times because the auto driver, restaurant or shop is more likely to have change for a 500 than a 2,000 note.

5. It’s all about a war on black money2

These scoundrels hoarding all their ill gotten money are sucking the liquidity out of the money system, we were told. And in addition are denying the Government its due in the form of taxes. Demonetising all this cash saved under mattresses across the nation is going to strike a fatal blow to all those horrible, corrupt, anti-national people.

2 Black money in India means money that has been paid but not declared to the tax department so you don’t have to give away part of it to the taxman.

6. And a war on terrorists (haha, take that, bitches!)

And all these terror attacks are being funded by state sponsors who are printing large amounts of fake notes. Militancy is being funded by all these fake notes so it’s also a surgical strike against this nefarious activity. Except the terror attacks haven’t quite stopped and freshly minted 2,000 rupee notes have been found on the bodies of dead terrorists. Bugger.

7. And there’s going to be a massive cash dividend for the Government

With all these black money hoarders unable to deposit their money without drawing the attention of the taxman, tens of millions of rupees that have been printed would be wiped from the balance sheet. This difference between what was printed and what is now back in the banking system will result in a huge dividend payment that the Government can use for the betterment of the nation.

8. Or maybe there won’t be any dividend after all

As the value of currency being deposited reached 90% of the total value that was thought to be in circulation, it was clear that people with black money had found loopholes to deposit their cash. Or, what’s more likely, they had already converted their cash into assets such as gold and property. As the total amount of money being deposited approached the amount that was in circulation the RBI has quietly stopped reporting these numbers as it hurts the original narrative of black money being the reason for demonetisation and it’s clear that corrupt officials and business owners have not been adversely affected.

There is another explanation of course: People who hoard black cash eventually return it to the economy by way of grossly opulent weddings costing millions of dollars.

Oh, and as almost all the money in circulation has been returned, the opportunity for a dividend bonanza has been significantly reduced.

9. Hmm, actually it’s more about a drive to get the nation to go cashless

Now, demonetisation is an opportunity for the country, where just 5% of transactions are cashless, to go cashless. It’s a very noble aim because even Bill Gates said so. Others haven’t been quite as forthcoming with their praise though, with Forbes calling it sickening and immoral.

10. Wait, give us a minute, we’re still trying to figure out the narrative for demonetisation

As the Government is criticised for forcing people to adopt cashless payments, it has been struggling in recent weeks to keep up the new narrative of why demonetisation was ordered and what it hopes to achieve.

11. Indian people have had a lifetime of bending the inflexible rules of byzantine bureaucracy, your demonetisation rules hold no fear for them

Seriously? India is where it is despite everything successive Governments have done. Where the Government has fallen short on most areas, the enterprising people of the country have navigated rules, licenses, processes and corruption with aplomb and built a nation that could soon boast one of the largest economies of the world. Indeed, even journalists are able to come up with a dozen ways to convert your old black money in to white money – the industrialists and bureaucrats of India are far more scheming than this and can probably add three dozen more ways to convert their money.

Even in Tamil Nadu, there are unconfirmed rumours that colleges across the state were paying salaries in cash several months in advance. Other businesses that had business on books from before demonetisation suddenly received all their dues, paid in cash, in demonetised notes.

12. Modi is loved beyond human comprehension

People talk about what Trump could possibly say to cause outrage that would politically hurt him. Those people should take a look at Modi. How else can one man cause so much misery, inconvenience and heartache and remain the most popular politician in the world. It would appear that as a politician, if whatever you do or say is as bold, brazen, counter-intuitive or audacious as possible, people will be so confused or stumped that they simply stand back and wait for someone else to point out the terrifying implications of what has been said or done.

13. The political opposition in India is about as effective as a jelly hammer

RaGa was handed this initiative on a silver platter and what came of it? A nationwide bandh that he couldn’t even get his Mom to attend. Has there ever been such an ineffective, impotent opposition leader? It would be better if he turned that sabbatical in Thailand into a permanent move. Ouch.

14. India really, really loves its cash

As noted earlier, according to one bank in India, 95% of all transactions are done in cash. Compare that to the UK where less than half of all payments are now done in cash.

15. My watchman doesn’t have a bank account

On the day of demonetisation, we told the watchman that he couldn’t spend 500s or 1,000s any more. He got really worried because he had secretly saved a few thousand rupees at home and didn’t have a bank account to deposit those notes. Nor did he have any ID on him to take the notes to a bank or post office to get them exchanged for new ones. His ID was in his home town, hundreds of kilometers away and since he couldn’t spend his savings, he couldn’t afford a bus ticket home to get his money. Furthermore, he didn’t trust his son to deposit the cash in his bank account because he said he would spend it all on alcohol.

It was a very worrying time for my watchman as he didn’t know what to do with all his cash savings.

16. No one is sadder than my Uber driver who has yet another customer paying by PayTM

Before demonetisation, Uber drivers never asked about the payment method – they were happy with PayTM payments. (Ola drivers on the other hand almost always insisted on cash payments because it seems Ola isn’t quite as efficient at transferring earnings as Uber is). After November 8th, the first question the Uber driver would ask was if I was paying by cash.

One Uber driver was so sad because he had done four trips before he picked me up and everyone paid by PayTM. He now had no money to buy lunch and didn’t have a debit card with his bank account so couldn’t fill up with more diesel to continue working. I was going to be his last passenger for the day and he couldn’t earn his trip bonus.

17. My mother-in-law rarely used her debit card until demonetisation

I guess like most people of her age, the standard practice was to withdraw the cash you needed for the month and use that for every day expenses. The debit card was only used at the bank branch to withdraw cash, not to make payments. She’s had to get over her fear of having her card details stolen and use the card for all her transactions.

18. My colleague always paid for her Ola cab in cash before demonetisation

“Why are you still paying for you Ola taxi with cash?” I asked my colleague who had spent the last five minutes negotiating with her driver about how much change she had and how much she would be willing to accept from him.
“Because it’s easier than PayTM, I don’t have to keep topping up my account.” She replied, still not happy that she had paid 20 rupees over the meter because the driver didn’t have the correct change to give her.

Today, she reluctantly tops up her PayTM account every few weeks, pays the exact fare and gets out of the taxi without a second thought of paying. “It’s the worst!” She declares.

19. Friends and family visiting India were turned into money mules

“Do you know anyone going to India?” Asked every NRI and OCI Indian person living outside of India. Around the world, 500 and 1,000 rupee notes were found and people travelling to India were identified. These people were turned into money mules, transporting worthless notes to be deposited in banks by friends and family. Even my own family sent back several thousand rupees in old notes that they had accumulated from all their trips here.

20. The small vegetable shop owner from next door became our BFF after we gave him 700 rupees in coins

Somehow I had accumulated over 700 rupees in coins over the last nine years. Without a Coin Star machine to deposit the coins and with bank queues taking forever, I didn’t have much choice but to hold on to them. But wait! The vegetable shop guy virtually got down on his knees and begged us to give him the coins. We gave him the coins, he gave us the cash.

21. Turns out our vegetable shop guy also trusts us more than our watchman trusts his son

Since we were only getting one 2,000 rupee note from the ATM and the vegetable shop owner was fast running out of cash (except the coins), he agreed to give us 2,000 rupees of credit. He didn’t keep a ledger or anything, he trusted us to keep track of how much we had spent and had no problem not knowing how much was left from the 2,000 rupees. What a guy!

22. The richest man in the room is the man with 100 rupees in his wallet

You might have all the 2,000 rupee notes in the world which is great for buying items worth thousands of rupees but not great for everyday needs. If you want to buy something for 100 rupees, no one has any change for a 2,000, so if you have 100 rupees in your wallet, you are sorted because you can actually spend your cash.

23. Standard Chartered is the best and worst bank for demonetisation

About two weeks after demonetisation, I rocked up to Standard Chartered Bank to deposit my old notes. I had seen the size of the queues outside state run banks and heard the bizarre rules about depositing notes such as writing out each and every serial number of the bank notes you were depositing. I braced myself as I entered the bank…and found there to be more staff than customers. I filled out a single form and went straight to the kiosk to exchange my notes. No fuss. In and out. It clearly pays to bank with an obscure, private bank in India.

Standard Chartered are also the worst because the other day I wanted to withdraw some cash. As last time there was no queue. The conversation sort of went like this:

Me: Good day! I would like to withdraw some of my cash, please
Bank: Certainly, just write a cheque out to yourself
Me: This isn’t the 1980s, I don’t have a cheque book, can you give me a withdrawal slip that I can fill out?
Bank: No, we removed all the withdrawal slips
Me: Then how am I supposed to withdraw my money?
Bank: Just write a cheque out to yourself for the amount you want to withdraw
Me: But I don’t have a cheque book, I’ve never needed to write a cheque in nine years
Bank: You can just apply for a cheque book and it will take four business days to reach you
Me: But I need the cash now, are you saying that you won’t let me access my money?
Bank: You can use the ATM to withdraw some money
Me: Your ATM has run out of cash and it will only give me 2,000 rupees per day
Bank: Better that you apply for a cheque book then
Me: So you’re holding my money hostage and using an antiquated banking system. Is that what Standard Chartered is, an antiquated bank that refuses to let its customers access its cash?
Bank: *frozen smile*

24. I found out what it feels like to receive a freshly minted brick of notes – even if those notes are just 20 rupees each

When I made the first deposit and exchanged my notes, the bank had run out of 2,000 rupee notes and the new 500 rupee notes were a mythical creature talked about in hushed tones. Instead they gave me a brick of 20 rupee notes. I don’t think I’ve ever seen so many twenties before. One great thing about this is that we had immediate liquidity to buy all our daily needs.

brick of 20 rupee notes

25. Suddenly, having all those salary bank accounts has come in handy for withdrawing money

When the RBI enforced the 2,000 rupee per day withdrawal rule from ATMs, you might think that was an inconvenience – and it was. However, for the salaried man (and lady) in India who has jumped six jobs in the last five years, all those switches were an opportunity to open new salary accounts with different banks. This person now had six debit cards from six different banks and so was able to withdraw plenty of cash.

26. Across India, men were shocked to find out how much money their wives had been keeping from them

This was the most amusing and most alarming story to come out of demonetisation for me. Across India, wives would squirrel away the cash from the monthly allowance their husbands gave to them to run the household. The money would be saved for a rainy day or maybe as insurance. Since these women didn’t have bank accounts, they were forced to come clean to their husbands. Said husbands were delighted at this cash bonanza but might never trust their wives with the money again.

27. Finding the odd 500 rupee note in the bottom of a drawer brings both happiness and depression

Happy that you just found more money. But then you have to weigh up whether it’s worth travelling all the way to the bank to stand in line for three hours to deposit it. If it’s just one 500 rupee note, is it really worth it?

28. Money wallet companies had a gigantic, collective orgasm on the evening of Modi’s speech

PayTM, Freecharge and other money wallets couldn’t hide their joy as demonetisation suddenly meant their entire business was endorsed by the Government of India. PayTM even took a leaf out of Jio’s marketing playbook and wasted no time in running full page ads with Modi’s image saluting him for basically endorsing their company.

29. PayTM can’t handle a demonetised economy

The joy was short lived though as their servers crashed as people tried to signup and use their service. Oops.

30. Despite there being no cash, wealthy politicians can still host India’s most expensive wedding of the year

So how do you pay wedding vendors $73.5 million when traditionally they only run on cash? It helps to be an influential industrialist that invites the bigwigs of politics to your daughter’s wedding. On a related note, see how five billion rupees are injected back into the economy.

31. Small businesses can’t get hold of PoS machines fast enough

So many small businesses were able to offer their products and services 30% cheaper than larger businesses because they only accepted cash – and since you technically only pay tax on the income you declare, you save 30% on costs. Now, with no one having any cash to spend, many small businesses like tailors and salons are struggling because their customers don’t have any cash and they can’t accept cards because there’s a two month waiting list to get a card machine. On a related note, as more customers pay by card, expect costs at these salons and tailors to rise by about, hmm, say 30%?

32. The Sangeetha restaurant near our house always has change for 2,000 rupees

Need change for a 2,000 rupee note? Frequent the establishments that are frequented by the working class. Never were we refused service because we only had a 2,000 rupee note to pay for a meal worth 150 rupees.

33. The cashless economy doesn’t work in a cyclone

When Cyclone Vardah struck Chennai, the last thing people thought was: OMG, how will I pay for my Uber? Well that soon became a reality because the internet died everywhere, 3G/4G networks were completely down and if your PayTM balance had run out you were virtually stranded in your home. With no cash available in the city, ATMs unable to dispense cash because they couldn’t connect to a network and card machines not working for the same reason, it was a tough week for Chennaites and a damning reminder that perhaps the infrastructure isn’t ready for a cashless economy yet.

34. Demonetisation seriously flummoxed tourists arriving in India with their worthless rupees

Ah, tourists. The well-to-do, organised tourist would have purchased their rupees in advance and received it in nice crisp 500 and 1,000 rupee notes. Their contented happiness was taken from them by Modi on 8th November with demonetisation as hundreds of thousands of people arrived in the country to discover the notes that they had in their wallet could no longer be used.

The currency exchangers at the airports wasted no time in refusing to accept demonetised notes so many tourists were left in limbo – some even had to beg on the streets to get money to go home!

35. Multi-national consumer brands still function entirely on cash

It says a lot about a country’s dependence on cash when even the multi-national companies from advanced economies still rely on cash to conduct business. Our LG washing machine stopped working and we were told by the LG customer support team that they’d send a technician out to replace the motor, but they could only accept payment in cash. All this talk of a cashless economy is in words only, especially when multi-national consumer product companies rely on cash to operate.

36. In a new cashless world, one of India’s largest public organisations still doesn’t accept debit or credit cards

Let’s send gifts from India to my family for Christmas, we thought. It was a good idea. We went cashless with the Uber car to the mall and went cashless when paying for the gifts. Private companies are all about going cashless.

The Government has extolled the virtues of going cashless and indeed the latest narrative is that demonetisation is about nudging people to be more cashless.

Our downfall came when we tried to ship our cards and gifts abroad. We turned up at the main post office in T-Nagar which handles thousands of packages every week. “That’ll be 3,550 rupees.” the post office lady informed us. I handed over my debit card. “No sir, cash only, we don’t accept cards.”

Are you kidding me? All this talk of the cashless economy and one of the largest government organisations in India only accepts cash? This is the challenge that India faces and flies in the face of the story that demonetisation is about getting India to a cashless economy.

37. The embassies of foreign countries got really upset that they could no longer access their money

Apparently it goes against the Vienna Convention to prevent foreign embassies from accessing their cash. Diplomats in New Delhi made this very clear with formal protests and the Government had to make one rule for the general public and one rule for foreign diplomats – namely that they could have unfettered access to their money while the general public could not.

38. The new note has been really badly designed – apparently

Not my opinion, but it seems that designers are outraging against such bad design.

39. During demonetisation, your best friend is your bank manager

See point 11. As mere mortals like you and I stood stoically in never ending queues at the banks and ATMs to withdraw a measly 2,000 rupees, shady businessmen, politicians and bureaucrats were working with bank managers across the country to convert huge amounts of cash.

From 8th November to date, the IT department has seized over 30 billion rupees in unaccounted wealth from cars and properties across the country. About 860 million rupees were in brand new notes. How are these people able to get their hands on so much new money? With the help of bank managers and RBI officials. Corruption runs deep when there is a rupee or two to be made.

40. Retail bank employees now work longer hours than investment bankers

Banks in India, especially the public sector ones, have had it easy. Relaxed working hours, finish up by 4pm and barely any accountability. Now, those bankers are working long hours, seven days a week – moreso than their counterparts in the investment banking industry.

41. Kerala has the best queuing system in the world

Because who wants to stand in the sun outside all day. Keralites place stones (or sandals) to mark their place in the queue and then go and sit down in the shade until it’s their turn. Genius!

42. I could turn up to work to late and blame it on the bank queues

If my boss is reading this, I really did need to go to the bank three times each week…

43. Currency note collectors with more than 10 demonetised notes will be considered criminals by the Indian Government

My Facebook newsfeed flooded with people requesting old notes with specific serial numbers like 69696969. Now though, the Indian government has made it illegal to keep more than 10 demonetised notes after 31st March. Does this mean they are making criminals out of simple collectors?

44. No one earned their salary more than the poor RBI press officer who had to explain yet another rule change to the media

According to Bloomberg, the RBI issued 19 clarifications and rule changes between 8th November and 19th December – about one announcement every couple of days. Never before has the RBI issued so many notices.

45. When you finally find an ATM which has money, only to find out it’s only dispensing 2,000 rupee notes you move on without withdrawing any money

Your 2,000 rupee note means nothing to me. Nothing! I can’t spend it, so why bother?

46. After years of neglect, cheques suddenly became fashionable again

Across the country, parents were teaching their millennial children what cheques are used for and how to use them.

47. Business owners that ran on cash only spontaneously reconnected with distant relatives as they looked to bank their wealth

The thinking process of the business owner with hoards of untaxed cash in their home goes like this: The Government has said they won’t investigate any cash deposit under 250,000 rupees. I have 20 million rupees, I need to find 80 relatives who’ll deposit my cash. 80 relatives in India is about how many people might turn up for a normal weekend get-together.

48. To forge the new 2,000 rupee note all you need is some balls and a colour xerox machine

It takes balls and a certain lack of imagination that you might get away with photocopying 2,000 rupee notes. Yet, that hasn’t stopped dozens of enterprising men across the country looking at the colourful pink note in their hand and the colour xerox machine in their office, and announcing to their best friends that they have a foolproof idea. Worryingly, many got away with it until they were caught by the police!

49. At the time of demonetisation, half the population still doesn’t have a debit card

According to RBIs own statistics, as of August 2016, there were 712 million debit cards in circulation in India. Assuming that there are many people like me who own more than one debit card, that means around half the population (and apparently 100% of Uber drivers who still pay for petrol/diesel in cash) don’t have the means to go cashless and rely on cash to make all their purchases.

50. No one is more ‘pavam’3 than the housekeeping lady who withdrew her entire life savings from the bank to pay for her daughter’s wedding on the day demonetisation was announced.

This was so sad. The housekeeping lady was so excited for her daughter’s wedding. She withdrew her entire savings to pay for the jewellery, caterers, venue etc – all of whom only accept cash. The day she withdrew the cash was 8th November so she was left holding nearly 100,000 rupees of currency that no one would accept and the only thing she could do was go back to the bank, deposit it. ATMs would only let her withdraw 2,000 rupees per day and bank withdrawals were limited to 24,000 rupees in total.

3 Pavam is a Tamil word which means you feel sorry for the person. Imagine it’s raining and you see a person at the side of the road get splashed by a bus passing by. You would say that person is pavam.

51. 50 days after Modi pleaded with the nation to give him 50 days to get things back to normal, there are still queues snaking their way out of the public sector banks, ATMs are still empty and I still haven’t been able to spend this 2,000 rupee note that I’ve had in my wallet since 13th November because no one has any change.

52. I earlier said 50 things I learned after demonetisation, but by now we’re all used to past statements, policies and rules being arbitrarily changed. This list is now 55 things I learned after demonetisation.

Haha, suckers!

53. Airports would only exchange 4,000 rupees for foreigners despite the actual limit being 5,000 because they only had 2,000 rupee notes.

As told to me by a friend arriving in Chennai from London without any rupees on him. He got two 2,000 rupee notes but the taxis at the airport wouldn’t accept it because they didn’t have change!

54. Bollywood found one more excuse as to why its movies keep flopping

It’s not that the movies are bad, of course, it’s because demonetisation meant no one could pay for movie tickets and that is totally why the Bollywood movies flopped. Except Amir Khan’s Dangal. Because he is awesome and people will spend their last 100 rupees to watch his movie.

55. New rule change. This list is now 57 things I learned after demonetisation. Any rules you read after this may or may not have anything to do with demonetisation.

56. The new 500 rupee note is like a Tiger. Talked about, known to exist in the wild, but seldom seen by anyone who’s not a bank manager.

Have you even seen one?

57. The ATM withdrawal restrictions even apply when you travel abroad

I went to New York in December, I wrote about it. I owed my boss $100 but because of the currency exchange rules in India, I didn’t have $100 in cash. No problem, I’ll withdraw it from an ATM in New York. Nope. The ATM withdrawal restrictions even apply on ATMs in other countries. I could only withdraw $20 from the ATM.

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OK, enough. Did I miss anything? Did you learn anything from 50 days of demonetisation? Put them in the comments below!