Live with Money

As on November 8, the day demonetisation was announced, there were 1,716.50 crore pieces of Rs 500 and 685.80 Crore Rs 1,000 notes in circulation, which are no more legal tender. The total value of these notes is 15.44Lakh Crore [1] When a currency is devalued, its demand fades and people cease to use such currency, except for numismatic purposes. On the contrary, after demonitization, there is a demand for devalued currency notes in India, even after the expiry of period for exchange with new notes. We still read news about confiscation of devalued notes. It is reported by media that the RBI and Police doesn’t have a clue about this [2] . May be Police does not have a clue, but definitely RBI has. RBI is still counting on notes. I don’t think that the counting will be over in my lifetime. I was wondering why the counting was not over, despite earnest effort of all bankers across India.  To understand this, we need to understand the note distribution process and chan...

Pradhan Manthri Mudra Yojana(PMMY) popularly known as Mudra Loan is the most popular among financial schemes recently introduced by the government India government has introduced various schemes to boost economy via business. CGTMSE scheme was the most popular among them. Eventhough, the scheme became popular, the objective of uplift of economy was not served, as the marketing of scheme was not that successful as that of Mudra scheme. The government was successful in creating awareness among public about MUDRA scheme, so that the people started asking about the scheme to bankers. Many of bankers are scared and sceptical about the scheme ( Moreover, they are scared about the risks of loan turns bad; as many of the loan seekers are just for free money, than genuine requirement). The bankers feel that the inherent risk and the accountability factor plays a huge role in decision making. Eligible segments for Mudra Micro & Small manufacturing units, service sector units, s...

The Introduction of GST is hailed as one of the boldest move towards a single tax regime. GST coupled with Demonitization exercise has changed the nature of Indian Retail Ecosystem. The reports suggest that more and more customers are pronged into organised retail system, and the usage of Plastic Money has gone up. The impact of GST confusion is evident from the empty racks of Super Markets. Various FMCG items are now not available.  The reports says that the confusion may continue for some more time. The India’s economic system is predominantly cash based and was expected to continue so, till the turbulence of demonetization hit the streets.  The giants of organised retail markets such as Walmart, Metro, DMart, More, Reliance etc have seen a rise in their memberships. The consumer is shifting from unorganised sector to organised sector, mainly ease of transaction. The retailer who fails to offer the technological convenience to that of an organised retailer, has t...

The JIO led movement is going to further disrupt the telecom market, which is already under disruption. Even this post is aided by use of JIOs network. The proposed induction of “FREE MOBILE”;  return of deposit amount of Rs 1500 after three years, is a trap. Jio has a long term plan, Jio has developed Data Market, by offering free services : which had increased the per head consumption of data usage by nearly 15 times. People flocked to subscribe to Jio's schemes, as the existing telecoms (airtel, vodafone, idea etc) were charging us very high. It almost killed competition by slashing rates , and there by cornering 125Mn consumers within a short span. Thereby it creates a monopoly, which will make other companies difficult to enter. FDIs will not come, as they are already scared of the fate of investments done by Hutch, Vodafone, Maxis etc. It now introduces a low cost phone ; with an offer of refund of deposit amount after three years, which is nothing but an exc...

Demonetization has started thinking about eradication of Cash Based economy, the real currency notes. The digital banking is really gonna happen. A country without currency notes. Tellers will sooner become extinct species. The digital wallets are going to be the soul of next generation. We have to move our development of wallets to that direction. The wallet but also comes with threats, the Virus. It can turn a person to penniless overnight. The frauds will have no bounderies. The international transactions has to be filtered with mechanisms that are foulproof and constantly updated. The banking is Going to see a radical change in the coming decade and that also pose challenges to employees with conventional attitude.

Gold Metal Loans are used by the Jewellers in order to secure sufficient stock of gold for manufacturing for the purpose of exports and domestic sales. The leverage offered by the scheme is duly recognised by the leading players in the market. However, due to the inherent risk associated with the metal, has cautioned banks to have a cautious approach while allowing gold metal loans.  The inadequate data with RBI also made the banks to be wary of such scheme. Hence RBI has permitted only few banks (known as nominated banks*), that have permission to import gold, to issue GML. However, the customers of other banks, can avail this facility by submitting a standalone LC/BG to the nominated Banks. Though a lot of conditions were generally put forward by RBI in its original scheme, only few are applicable to customers point of view. Tenor of the scheme will be 270 days maximum. The borrower has to clear the dues within that period. The period is meant for the purpose of manuf...