India cracks down on tax fraud, issues new bank notes that all money must be changed for

Alessandra Kelley · Nov 8, 2016

http://www.bbc.com/news/business-37906742

Indian Prime Minister Narendra Modi has announced that the existing 500 and 1,000 rupee banknotes will be withdrawn from the financial system overnight.

The surprise move is part of a crackdown on corruption and illegal cash holdings, he said in a nationwide address on television.

...

New 500 and 2,000 rupee denomination notes will be issued to replace them.

The 500 and 1,000 rupee notes are the highest denomination notes in the country and are extremely common in India. Airports, railway stations and hospitals will only accept them until 11 November.

People will be able to exchange their money at banks between 10 November and 30 December.

The idea is to lock out money that is unaccounted for and make it visible for tax purposes - banks will be happy to exchange a few thousand rupees, but will be asking questions of those who turn up with hundreds of thousands or millions in currency.

There are no precise figures available but experts say the government's move could be "a very powerful measure" to curb "black money". IIFL Holdings Ltd Chairman Nirmal Jain told Bloomberg that it will have "a deflationary impact in general and more specifically on real estate prices - making homes affordable".

Myrealana · Nov 8, 2016

Oh man! That means the Rupees in my desk are even MORE worthless.

1000 Rupees is about $15 today. They were more like $17 when I got them.

aruna · Nov 13, 2016

I scrambled to find my "India purse" and indeed, there were 2000 rupees in it in 500 notes. I read about mile long queues in Indian banks. I thought of sending it to my own bank in India which I have not used for years! And then I put out a call on Facebook for anyone to just have them. An Indian friend replied and he said he will use it for his kids' education. Every little helps, and I'm glad. I don't like money to go to waste. Sending it off this pm.

vsrenard · Nov 14, 2016

We have those notes in our India purse too, but there doesn't seem to be a good way to cash them in in the US.

Overall, I'm not convinced it was a wise idea to try enforcing such a quick turn-in of cash in a country with India's population. So many people in these miles-long queues can't function without the new bills they are struggling to get.

Myrealana · Nov 14, 2016

aruna said:
I scrambled to find my "India purse" and indeed, there were 2000 rupees in it in 500 notes. I read about mile long queues in Indian banks. I thought of sending it to my own bank in India which I have not used for years! And then I put out a call on Facebook for anyone to just have them. An Indian friend replied and he said he will use it for his kids' education. Every little helps, and I'm glad. I don't like money to go to waste. Sending it off this pm.

That's a good idea. One of my co-workers is heading home to India next week. I'll see if she wants my 1000rps notes. (Except the one I'll keep as a souvenir.)

Alessandra Kelley · Nov 21, 2016

An Indian politician opposed to the money swap had a meltdown on a Facebook Live session after he was asked to provide evidence for his claims.

Arvind Kejriwal, chief minister of the Indian capital Delhi, called the journalists present an insulting class-based term and left before they could conduct an agreed-upon sit-down interview.

Meanwhile the young and dynamic social media team that accompanies Mr Kejriwal everywhere he goes did not share the Facebook Live as promised earlier.

This is symptomatic of a worrying trend in India, where journalists are often accused of being "biased" towards one camp or another when they are only trying to do their job and ask valid and legitimate questions.

Such accusations are more worrying when it's not just supporters but politicians themselves who are making them.

MaryMumsy · Nov 21, 2016

I lived as military dependent in South Korea in the mid sixties. When you arrived in country your second stop (after passport checking) was the money exchange. Greenbacks (US currency) had to be traded for 'scrip'. We also called it funny money or Monopoly money. That was used for all monetary purposes on the military bases. Several times per year, randomly, and with no notice, the base would be on lock-down. All your scrip had to be traded for new scrip within a certain time frame (a few hours) or it became worthless. This was due to counterfeiting and the black market.

MM

India cracks down on tax fraud, issues new bank notes that all money must be changed for

Alessandra Kelley

Sophipygian

Myrealana

I aim to misbehave

aruna

On a wing and a prayer

vsrenard

Watching the Whales

Myrealana

I aim to misbehave

Alessandra Kelley

Sophipygian

MaryMumsy

the original blond bombshell