Thursday, November 17, 2016

What is a Loan Write Off?

Even before the dust has settled from the Demonetisation of the 500 and 1000 rupee notes bombshell dropped by the Indian government last week, yet another topic has become the most widespread shared & criticised subject. What is it?

“Loan Write off by Banks” is that hot topic and everyone is talking about this subject but based on what is being spoken, it looks like; the ones doing the talking don’t understand what a Write Off is. The purpose of this article is to help you understand that is a Loan Write Off, why banks do it and what happens after the write off.

Before we begin: This is not a politically motivated article. The purpose of this article is to help you understand what a Write off is, that’s all. Please refrain from posting politically affiliated comments in the post. Thank you.

Why this Article?

Ever since news broke out over the fact that SBI has written off some of Vijay Mallya’s Loans, there are tons of forwards going around in whatsapp and social media. In my school friends whatsapp group, this topic is under heavy discussion and one of my friends (Albert) wanted me to help clarify to the group on what exactly is a Write off and is it the same as Waiving off loans. So, here we go…

What Exactly is a Loan Write Off?

Let us assume you have taken a loan of Rs 1,00,000 from a bank but are unable to repay. From the bank’s point of view, the loan is an ‘asset’ and the interest that you repay is an ‘income’. As long as you continue to make the EMI payments, it is considered a normal and the loan features in the asset column of the Bank’s Balance Sheet.

Lets say you stop repaying your EMI, the bank will generate lower revenue due to your missed payments – right? The bank is going to make attempts at contacting you to resume your loan payments and this usually goes on for a few weeks/months and until this is happening, your loan will remain in the “Assets” column in spite of the fact that the bank isn’t generating any revenue from it.
But, beyond a point, as per the norms set forth by the Reserve Bank of India, if there is no Income coming from an asset (in this case Interest & EMI) the bank will have to first provide for the loss of that asset and then remove it from its Balance sheet.

This process is what is called a “Write-off”.

What Happens to the Asset ?

From the actual definition of the Write Off, you may have gotten an impression that the bank is just giving up and isn’t going to ask you (the borrower) for payment. Am I right?

Actually, a Write Off does not mean that the bank is not going to try to recover money from you. They may either try to continue to recover the money themselves or sell your loan to a recovery company who will continue to push you for repayment.

A loan that has been written off only disappears from the banks balance sheet for the current financial year. They DO NOT forget about the loan and you will continue to Owe the Bank Money.

To Be Very Specific to the SBI Kingfisher scenario, SBI Bank will continue to pressure Kingfisher and its owner Mr. Mallya to repay the amounts that they owe the bank. There are some legal proceedings going on which will continue to happen until a decision is arrived at through the system. This write off is only for the banks financial statements and DOES NOT mean that Kingfisher doesn’t need to repay the loan.

Why Does the Bank Do this?

Now that you know that a write off doesn’t mean loan waiver, you may be wondering why a Bank would do something like this – right?

There must be some benefit for the bank in writing off your loan otherwise why do it at all?

Firstly, after the write off, the bank can distinguish between loans that are still actual “Assets” and those that aren’t. More importantly, writing off loans help Banks get some tax breaks because these write offs are considered as “Losses” for that financial/tax assessment year and hence reduce the banks tax liability for the year.

Who Pays for this Loss?

As the loan borrower hasn’t repaid the loan, the bank has written off the loan which means someone is going to incur some losses. The bank will bear some portion of the losses but not all because the government is allowing them some tax offset due to the loss.

So, I would say eventually it is the Government that is making the loss. If the loan was properly repaid, the bank would have earned its share of income and paid a % of it as taxes. Now, neither has happened and the Government has lost tax revenue.

Why are Banks Allowed to Write Off Loans?

Now, you may be wondering, if the Government is losing Tax Revenue, why are they allowing Banks to Write Off Loans? Am I right?

According to the rules set forth by the RBI, Banks can only lend so much % of their deposits as loans. Up until a few years bank, Banks did not have this habit of write off’s and continued to keep even bad loans as “Assets” on their books. As the amount of loans was already close to the threshold, banks would stop lending to other customers who actually need funds. This type of paused lending activity by banks causes a lot of negative effects on the markets and the country’s economy as a whole. That is why the RBI intervened and instructed banks to write off loans that are not in a position to be recovered immediately so that they can continue to lend to other customers who need the money.

In fact, banks these days are forced to clean up their balance sheets on a regular basis to flush out such toxic loans and continue lending to deserving customers.

Does this Loan Write Off Affect Others?

As banks give loans using the money they collect from us as Deposits, the natural question now would be whether these write off impact other customers of the Bank – right?

Yes, Write offs will have impact on other customers of the bank – both deposit customers as well as loan customers. As part of our deposit agreement banks are bound to give us back our principal amount so, we aren’t losing out on the capital. However, if there are too many loans being written off by a bank, it will have a negative impact on the interest rates they are able to offer to their deposit customers. Similarly, they may increase the interest rates on other borrowers to try to recover their lost interest income.

Does this Loan Write Off Affect the Defaulter?

Of course, Yes. First and foremost the bank will initiate legal proceedings and try to recover as much money as possible from the Defaulter. On top of this, banks these days are maintaining a centralized list of such defaulters so, it will be very difficult for such individuals to borrow money from the banking system in India, in future.

Some last words:

As you can see a loan write off is more of an accounting procedure to allow the banks to clear up some space for new loans and avail some tax benefits. It does not mean that the bank has forgiven the defaulter and he/she doesn’t need to repay the loan.
Hope I was able to help you understand about the Write Off concept. If you have any questions on this topic, please feel free to leave a comment and I would be more than happy to answer them.

Tuesday, November 15, 2016

Detailed Impact analysis of Demonetization – Long term Benefits Outweigh Short Term Pain

In the previous article, we saw a quick overview of the Demonetization scheme and its immediate impact on the citizens of the country. Over the past few days social media has been buzzing with posts and memes both pro and against the move. Before you decide whether you are For or Against this move by the Indian Government, I would recommend you read this article first. The purpose of this article is to help you understand the Detailed Impact this Demonetization move is going to have on the Indian Economy.

Note: This is not a politically motivated article and I am only going to analyze the impact from a purely economic stand point. Please refrain from making political comments irrespective of whether you agree with my views or don't. Thank you.

A Little Background:

The sudden and abrupt announcement by the government to make the currency notes of INR500 and INR1,000 invalid as legal tender from mid night of 8 November came as an absolute shocker to everyone. Though there were rumors aplenty that a new INR 2,000 note is on the cards, nobody expected that the Government is going to make the older notes of 500 and 1000 invalid. The Government has clarified its intent behind the move as an attempt to crack the whip on black money and face currency rackets across the country. 

This comes after a Partially-Successful attempt by the Government where they allowed citizens with Unaccounted Income to legally pay the requisite taxes and convert it to white. This scheme was called the “Income Disclosure Scheme or IDS” and has unearthed over 65,000 crore rupees. Considering the amount of black money that is supposed to have been stashed away abroad (or in cash houses in India) this number is quite small. Nevertheless, people will black money were given an opportunity to come clean and now the government has gone one step further to make all their illegal hoards of cash – WORTHLESS… 

Of course – the obvious unanswered question before we get into detailed impact is “What if people start hoarding the new 500 or 2000 rupee notes also?”

Reduced Currency Circulation and Supply – Short Term 

As a country where Cash is still the King and paperless payment means (cards, online etc.) are still not as widely used, this move to demonetize 500 and 1000 rupee notes is going to have a “Direct” and “Major” impact on the currency circulation. To make matters worse, about 86% of currencies being transacted belong to these denominations. This means, we are going to have short term difficulties in getting currencies for our day to day transactions. Banks are extending their operating hours, ATMs are being recalibrated to dispense the new notes and also being refilled multiple times every day to reduce the impact on the common man. However, we cannot deny the fact that, this is going to be a big inconvenience (at least for the first 1-2 weeks) for the citizens of the country. 

Impact on the Informal Sector – Short Term Major Impact, Long Term Medium Impact

You may be wondering what is meant by Informal Sector. 

According to Wikipedia - The informal sector, informal economy, or grey economy is the part of an economy that is neither taxed, nor monitored by any form of government. Unlike the formal economy, activities of the informal economy are not included in the gross national product (GNP) and gross domestic product (GDP) of a country.

Black Money is the lifeline of the Informal Sector of India. Millions and Billions of rupees get exchanged between buyers and sellers of Goods & Services in the Informal Sector but none of it comes under the tax radar. Some of the major industries in India that are part of this Informal Sector include, Real Estate, Construction, Jewelry etc. 

So, all Black Money Transactions that don't contribute to the nations GDP or pay taxes are going to be impacted directly. This is a good thing, isn’t it? 

Impact on GDP Growth – Short Term Medium Impact, Long Term Low Impact 

India has been one of the few developing nations that have been able to sustain their GDP growth momentum in the past few years at around the 8% mark. This sudden decline in money supply is definitely going to impact the consumption demand in the Economy in the short term. This coupled with negative impact on Real Estate, Jewelry and other Informal sectors, this demonetization could potentially lead to a slight lowering of our GDP growth targets. 

However, this shortage in currency supply is only going to be for the first few weeks and the system is expected to adjust itself to the new currency notes within one quarter. Experts predict that the growth forecast for our GDP would still be around the 8% mark or maybe dip slightly after this Demonetization move. 

There are some people suggesting that this reduced money supply might have a deflationary effect. As this short-supply is an interim situation rather than a long-term predicament, we cannot just say that this move will result in Deflation in all sectors of the Economy. However, whether the reduced money supply will just result in just a reduced demand or Deflation or a mix of both will vary from sector to sector depending on the nature of the goods or services under question. 

Impact on Hawala Dealers – Short Term Critical Impact, Long Term Medium to Low Impact 

The term Hawala is being used extensively these days by supporters of this Demonetization move. Hawala brokers and dealers have been dealt a very heavy blow where the tons of cash in 500’s and 1000’s they are sitting on, are worthless now. (Read more about hawala - Click here ). Unless they can find buyers for these worthless stacks of paper who are willing to deposit the money into their own bank accounts, these dealers are going to incur hefty losses. Hence the short term critical impact. As these dubious transactions usually go toward financing other illegal activities, this impact is going to be positive for the nation as a whole. 

Of course, the hawala traders and brokers will find a way to sustain & survive in the long run but will be wary of future Demonetization attempts and wouldn't be able to expand/grow to uncontrolled sizes as they are now… 

Impact on Fake Currency Rackets – Short Term Critical Impact, Long Term Low Impact 

Our country has been plagued with fake currency rackets that are trying to pump in fake 500s and 1000s from both east and west of our borders. With this sudden demonetization, they are now forced to figure out means to print out the newer notes and until they do, their activities are severely impacted. Not to mention, the piles of worthless paper they are sitting on which they just have to dispose off with no monetary benefits. 

Of course, this one time Demonetization isn’t going to eliminate these fake currency rackets but the fear that other currency notes may be Demonetized in future would be lingering in their minds and will prevent them from growing uncontrolled like they have become now. 
Hawala traders and fake currency rackets primarily fuel the growth of terrorism in most countries across the globe. There has been no news of stone pelting or stray violence incidents in the past 3-4 days. Maybe this Demonetization is having the impact on separatist groups who are paying people to cause such ruckus because all their money is worthless now. 

Impact on the Real Estate Market – Short Term Medium Impact, Long Term Low Impact 

This Demonetization move is unlikely to result in any long term major reduction in demand for Real Estate from end users. Do you wanna know why? Majority of people who are buying property are going for a Home Loan to fund their purchase. This group of buyers will continue to buy homes irrespective of this Demonetization move. However, demand from investors who are paying cash to buy a house (and register the property at a value that is much lower than its market price) might go down because of this Demonetization move. Of course, much of this cash-only type demand is on relatively higher value transactions of above 1 crore or more where people are trying to offload their cash reserves. Hence, this reduction in demand is expected to have only a minor impact on the Real Estate Sector as a whole. 

From a buyers stand point, this will result in stabilization of the prices that have been skyrocketing in the past decade because one of the fuelling factors behind the enormous growth of the Real Estate sector has been politicians and rich businessmen pumping in millions of their unaccounted currency with ease because they were able to transact in “All Cash” with no restrictions. Even with hundreds of thousands of apartments being unsold in gated communities in towns & cities across India, builders are willing to wait until they get a buyer for the price they are quoting because they are in no hurry to convert their black money to white. Small to mid-sized Builders and Real Estate developers who don't have access to black funds are the only ones who have had to reduce their prices to stay in business. 

On a related note, the Registration Prices for Real Estate might increase because, people have been able to register their property for prices that are much lower than they are worth because of the big cash component in the purchase. With this Demonetization, registration prices will go up and as a result, so will the tax revenue for the government. 

Impact on the Automobile Sector – Short Term Medium Impact, Long Term Low Impact 

This Demonetization Move will Definitely have a medium term medium sized Impact on the Automobile sector because a good chunk of buyers of automobiles still use cash (that is unaccounted for, of course) for their transactions. Like with the Real Estate sector, the demand from the middle-class that are taking Auto Loans to buy their cars or two-wheelers will continue to be the same. However, as the % of cash only transactions are higher than Real Estate sector, the impact is going to be medium sized rather than minimal. 

Between the first hand and second hand auto markets, the second hand market is expected to have a much bigger impact due to the higher proportion of cash transactions. 

Impact on Consumer Durables Sector – Short Term Medium Impact, Long Term Very Low Impact 

This Demonetization Move will Definitely have a medium sized short-term Impact on the Consumer Durables sector because a big chunk of buyers still use cash for their transactions. With increased usage of Credit Cards for purchase of consumer durables (coupled with easy pay EMI schemes offered by card issuers) this impact is only expected to be in the short term and will not be applicable after 3-6 months once money supply returns back to normalcy. 

Impact on Jewelry and Gems Sector – Short Term Major Impact, Long Term Low Impact 

Jewelry and Gems sector is expected to be impacted heavily at least for the next two to three quarters. This is because, a major chunk of the working capital in the industry comes from unaccounted cash & a large proportion of the goods being sold are uncounted for inventory. The industry has been able to sustain its business with heavy leverage on “Cash only” transactions and with only a few thousand rupees enough to buy gold jewelry or gems, this has been the easiest option for people to convert surplus black cash. 

In terms of impact also, we could split Jewelry traders into small sized businesses who operated in the informal sector with no accounting or taxes whatsoever and the medium to large sized businesses that have operate in the Organized sector with proper accounts maintained. This Demonetization is expected to have a short-term negative impact on the organized sector while the impact on the short-term unorganized sector the impact will be much harsher. 

In fact, ever since the Government announced its intention to Demonetize the 500 and 1000 rupee notes, there has been a mad rush to buy gold to try to salvage at least some of the black funds. However, the government has requested the CCTV footage from all jewelry shops for the past few days to track the tax evaders who tried to convert their black currency into gold. 

Gold imports through the unofficial channel are likely to reduceas well. There will be no significant impact on jewelry exporters because it is mostly an organized market and sales are againstproper invoices.

Impact on High End Retail Sector – Short Term Medium Impact, Long Term Low Impact 

As one of the industries with high proportion of cash transactions, the impact on high end fashion retail and luxury goods to be more pronounced as discretionary spending/demand in this segment will be directly impactedConsumers who spend using plastic will continue to do so but those using cash for purchases are definitely going to be curtailed due to this Demonetization move. 

Impact on Education Industry – Short Term Major Impact, Long Term Low Impact 

Actually Education wasn't supposed to be an industry but has developed into one. One of the biggest hoarders of unaccountable cash are Schools and Colleges. Almost every single institution collects security deposits and donations without issuing receipts. All of this money goes into the unaccounted/black category. Though this Demonetization is not going to deter these institutions from continuing to collect such donations, at least this move has dented their coffers and will result in heavy losses for those tax evaders. 

Impact on Restaurants and Services Industry – Short Term Medium Impact, Long Term Very Low Impact 

As yet another industry that is heavily cash driven, Restaurants and small shops where individual transactions are barely one or two hundred rupees, are going to be significantly impacted. Statistics suggest that at least 70% of all such transactions are currently in cash so the likely short term impact is going to be moderate. However, with all shop owners moving towards card reading POS machines, the impact wouldn't be as bad as it is being portrayed. Plus, with the cash flow being restored slowly, this impact should gradually become non-existent in the next few months. 

Impact on Bank’s Liquidity & Compliance Reserves – Positive 

We all know that Banks collect deposits from customers who have surplus cash and loan them out to customers who need it thereby making a profit in the middle. Banks in India have been plagued with bad loans on their books (No, not just Vijay Mallya, Banks in India have many thousands of loan defaulters) and have been struggling to cope with the losses. This Demonetization means, people with cash holdings are now forced to deposit their money in their respective accounts. Even if people with a lot of black cash just deposit the minimal 2.5 lakhs to evade tax scrutiny and only a few thousand people do it, imagine the thousands of lakhs of additional liquidity Banks are going to have? 

All this extra cash is going to get infused into our economy (by means of loans to businesses) and eventually impact our economy and GDP positively. Not to mention, the government doesn't need to infuse cash to meet the liquidity and regulatory requirements of our Banks. 

Impact on Bank Lending Rates – Short Term Negative Impact 

The sudden influx of is structurally a positive for banks as a big part of this cash gets deposited as current account and savings account (CASA) deposits, reducing banks dependence on higher cost borrowing. Deposit deployment will remain a challenge in the short to medium term for banks because, demand for loans may not meet the amounts being deposited. This could result in a short term fall in deposit rates but should stabilize soon. 

Before we Finish:

There are some educational institutions/small companies/businessmen who are forcing their staff to deposit 1-2 lakh each into their respective bank accounts and asking them to return it in future by citing their continued employment as a threat. Though this is illegal it is still happening because the government isn’t planning to scrutinize accounts where the deposit is lesser than 2.5 lakhs. As employment is at stake, most of us would probably do it as well because at the end of the day we all need to feed our families. However, am hoping that, just like the Government asked for CCTV footage from jewelry dealers, they do something to punish such black money hoarders… 

Some last words: 

As you can see from the article, the short term pain with regards to getting enough cash for our day to day needs is going to exist for the next few weeks until cash flow stabilizes and banks are able to refill ATMs with enough notes. However, if you see the long-term impact most sectors have very low or low impact. On top of this, there is going to be liquidity infusion in banks, additional tax revenue for the government as well as heavy impact to illegal and anti-national elements (terrorist financers/hawala traders/fake money rackets). 

All in all, I feel the long term benefits outweigh the short term pain. As responsible citizens of the country, we should try to support our government in this commendable effort to reduce black money.

Jai Hind!!!

Wednesday, November 9, 2016

500 and 1000 Rupees are No Longer Legal Tender – A Brilliant Move by the Indian Government to Curb Black Money

Last night, the Prime Minister of India came out with a blockbuster announcement that has probably resulted in millions of people losing their sleep. The 500 and 1000 rupee notes that are in circulation right now have been declared as worthless starting 12 AM of 9th November 2016. No, I am not joking.

Yes, the Honourable PM of India has indeed declared that from 9th November onwards, 500 and 1000 rupee notes are no longer considered legal tender in India. You may have read many Memes and articles both pro and against this topic. The purpose of this article is to help you understand the why part of this move as well as how it is going to impact the citizens of India.

Before we Begin:
                  Please note that this is not a politically motivated article. The purpose of this article is to review this recent decision by the Government of India. All views in this article are my own and do not endorse any political party or their views.        

Why this Blockbuster Decision

Have you seen the movie Shivaji where Superstar Rajnikanth blackmails all rich businessmen and politicians to uncover thousands of crores worth of black money hidden in different farm houses, wells, false ceilings etc? Though it was a movie, they actually did not show anything unreal. This is something very common.

One of India’s biggest Economic problems has been rich businessmen and politicians hiding crores and crores of worth black currencies which is unaccounted for and hence considered “Black Money”. The 500 and 1000 rupee notes are especially popular because just one stack of either of these notes represents a lot of money and even a few lakhs worth of money can be easily transported without raising any suspicion. Firstly, this money represents a lot of lost tax income for the country that could’ve been used for developmental schemes for the citizens of the nation. Secondly, this money is holed up in some safe house and not in circulation which defeats its intended purpose.

                  Not just India but the whole world is now in a continual fight against Terrorists. In order to continue their operations Terrorists also need Money. One of the major sources of their funding is the printing of fake currency notes (not just rupee but other major currencies like US dollar as well). Intelligence agencies in India and abroad have reported that thousands of crores worth of fake rupee notes (primarily in 500 and 1000 denominations) have been introduced into India in the past few years by people who are working on behalf of terrorists and the same is being used to fund their activities.

                  By Banning both 500 and 1000 rupee notes, the Government has made its intentions clear that they will neither tolerate black money nor tolerate terrorist financing.

Benefits of this Move to Ban 500 and 1000 rupee notes:

There are a few Direct and Indirect Benefits of this initiative by the Government to ban 500 and 1000 rupee notes.

Direct Benefits:
1.     Hoarders of Black Money would either have to declare their undisclosed income and pay taxes on the same or incur heavy losses and see their stashes of cash become worthless
2.     Funding lines for terrorists and arms smugglers is going to get choked
3.     Circulation of fake currencies in the country is going to reduce

Indirect Benefits:
1.     Money Circulation in the Market/Economy will go up there by easing up stress on the Rupee
2.     Real-Estate prices will potentially come down

Note: When someone deposits Money into their account and the same wasn't declared as income in the past year tax assessments then action will be taken against them to recover the unpaid taxes as well as to punish such individuals. This can be considered yet another indirect benefit where government gets additional tax revenue. 

Wouldn’t an Immediate Ban cause tremendous Inconvenience to the Public?

Of course, Yes. This move is bound to cause some amount of inconvenience however the government has tried to take steps to ensure the inconvenience is minimized. They are:

  1. For the 3 days (9, 10, 11 Nov) all Government Hospitals will continue to Accept the old 500 and 1000 rupee notes for payment
  2. For the 3 days (9, 10, 11 Nov) all Railway/Bus/Airline ticket booking counters will accept the old 500 and 1000 rupee notes for purchase of tickets
  3. For the 3 days (9, 10, 11 Nov) the old 500 and 1000 rupee notes will be accepted at all
    1. Petrol Pumps authorized by the Public Sector Oil Cos
    2. Consumer co-operative stores authorized by the State or Central Government
    3. Milk booths authorized by State Governments
    4. Crematoriums and Burial Grounds
An important point to note here is that, at all of these places, your Identity Information (PAN or Aadhar) will be required when you make transactions using these old notes for record purposes.

What should I with the Liquid Cash I have at home?

All families keep a small amount of money at home for immediate cash requirements. Especially the ladies of the house are fond of stashing away one or two currency notes inside of the lentils jar or under the cloth shelves. Anyways, if we check our home, a few thousand rupees worth of 500 or 1000 rupee notes being found is a very real possibility. It is our hard earned money and we cant just throw them away – right?

So, what are our options?

Option 1: Deposit them into your Bank Account

Starting 10th November until 30th December, all Banks and Post Offices across India will accept deposits of the old 500 and 1000 rupee notes without any limits. All you need is a PAN card or your Aadhar card number in order to make the deposit.

Option 2: Exchange them for New Notes

Starting November 10th, you can exchange old 500 and 1000 rupee notes at any bank or post office branch by showing ID proof (PAN or Aadhar). However, until the 24th of November there is a limit of Rs. 4000. After this date, this limit wouldn’t apply.

Note: please don't deposit money on behalf of someone else. If the government or tax officials ask questions on how you earned the money you will be in trouble. 

Is this Really going to work?

Like with all initiatives by the Government there are blind supporters (party followers mostly), blind Naysayers (opposition mostly) and then the undecided group which get swayed by what they see and hear about the subject. I had a friend who was complaining that this initiative wont work first because we still don’t know the list of all black money holders and secondly people would’ve already moved their money using hawala and laundered it.

My answer for point 1 was – Yes, finding out such a list is very difficult which is probably why such a decision was made. Eventually all those people who are sitting on hoards of piled up black cash have no choice but to declare that income to the bank and convert it to white or lose the money. So, this is more effective than actually finding out who has black money and then initiating an income tax investigation on each tax evader.

My answer for point 2 was – Yes, maybe many of the black money holders have moved all or part of their black money abroad. If that is the case, this move to make 500 and 1000 rupee note worthless will not be beneficial however, not all of them would have. Many politicians and rich businessmen sit on large sums of cash to spend during elections or when some important event happens where they cannot spend their white money or for whatever reason. The rich who are evading tax will most likely have at least a small % of their wealth as stowed away cash somewhere and this move will help either dig that money out or make this a loss for them. So, at the end it is a WIN-WIN for the Nation because black money volume goes down.

On top of this, fake currencies are also going to be erased from circulation in the indian market which is an added bonus because the people who want to harm the nation are now going to find it harder to raise money.

So, Yes I think this new scheme is going to work and kudos to the Indian Government for bringing in such a bold move without worrying too much about implications.

Of course, as a common man, this is going to bring a minor discomfort because I have to make a trip to the bank to convert whatever little money I have in 500’s or 1000’s but I don’t have a problem because firstly it is “All Tax Paid White” income and secondly this is for the nations greater good.

Important Note: There are rumours going around that some micro chip is embedded in the new 2000 rupee notes which may or may not be true. We have not gotten an official announcement from RBI either (I checked their website). So, whether 2000 notes can be traced by government to abolish black money is something we cannot comment now that is why I haven't talked about that in this article. 

Happy Banking and Jai Hind!!!

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