The scrapping of two highest denomination notes by the NDA government at the Centre November 8 has meant suffering for the common man and small-time businessmen in the country while the rich are not as inconvenienced.
Contrary to the grand proclamation of the government that the crisis would blow over in three-four days’ time, the problem has been persisting for over a week now, and going by the current trend, nobody can vouch for how much longer it would drag on.
In the last one week or so we have seen banks miserably failing to deliver the goods contrary to their claims that they would stand to the occasion and ensure that
people do not suffer.
There are large crowds inside banks and long queues before ATMs. The size of the crowds will only get bigger with every passing day. Banks are throwing their hands up. More than two-thirds of ATMs are shut. Reports come in of people fainting before ATMs waiting for their turn to get cash.
There are reports that old customers have died failing to bear with the rough and tumble of the moment. Going by reports it will take banks at least a month’s time to reconfigure ATMs after which the situation may return to normal.
Banks do not have adequate valid currencies to get their ATMs to function normally. Severe shortage of small denomination notes in banks has pulled the plug on small businesses. The delay in replenishing banks with Rs500 notes of the new series has compounded the crisis.
The artificial financial crisis besetting India, the third largest economy in Asia, today proves that the government had not taken banks into confidence before deciding on the extreme step. Nor did it have enough valid currencies in the system to ensure a smooth transition.
A report last week said government mints are working overtime to produce adequate number of currencies.
The Centre failed to anticipate the logistical nightmare that could befall the common man post demonetisation. After an emergency meeting with RBI Governor Urjit Patel and finance minister Arun Jaitley Sunday evening, the Prime Minister brought in a few changes in his November 8 declaration.
The government announced that it was raising the daily withdrawal limit from Rs2,000 to Rs4,500 and weekly withdrawal limit from Rs10,000 to Rs24,000. However, these were reverted Thursday. The daily note exchange limit has been reverted to Rs2000.
Such policy flip-flops demonstrate that the government did not do its homework before declaring its so-called war on black money. Piecemeal implementation of a policy does not inspire confidence among people.
Nipping black money in the bud is a welcome thought. However, the government should have desisted from punishing all because of the fault of a few crooks. Hoarding and exodus of black money in the country was a token of the government’s failure to implement its own policies.
Banks gave away thousands of crores of rupees to declared wilful defaulters. The system has a plethora of institutions to check such brazen outflow of honest taxpayers’ money to thugs. Banks, hand in glove with such corporate crooks, have extended advances in defiance of RBI guidelines and their own rules.
Crores of rupees were thrown away without due diligence; money was given to wilful defaulters time and again. The central bank (RBI) sat quiet even as such daylight robbery was unfolding.
A week after the so-called onslaught on black money hoarders by way of demonetising high-value currency notes, the holy cows (read state-owned banks) have started writing off thousands of crores of their bad loans given to corporate crooks.
The banks must be taken to task for non-realisation of such advances, especially when it will be proven that loans were given to proven defaulters such as the Hiranandani group and Vijay Mallya owned Kingfisher.
They cannot just wash their hands off their sins as if the money belonged to them and they can do whatever they wanted with it. India’s largest public sector bank has dropped huge money, mostly wilfully defaulted, into a cleverly created dustbin for ‘toxic loans’ called Advance Under Collection Account (AUCA) as a write-off.
Call it by whatever name you like, you cannot fool people. The new tool is nothing but an insidious design by banks to whitewash their past sins. The government has allowed banks to get away with such chicanery, while it has forced common men and honest taxpayers to endure a longish nightmare.
