Wednesday, November 16, 2016

Demonetisation of 500 and 1000 rupee notes in India

It's a widely discussed topic, so I will try to focus on some points which I felt were not covered prominently in media. Government has demonetised 500, 1000 rupee notes and is re-introducing newer notes of values 500,1000,2000 INR.

The demonetisation no doubts helps in eliminating counterfeit currency.
It also has limited scope to reduce black economy by attacking the person holding black money in physical currency. I say limited because the black economy is spread into gold, real estate.foreign exchange and other assets which are not enlisted by the govt.
A better step would have been to completely eliminate high value currencies and curb black money hoarding. Hiding a lot of cash is very tough in small denominations and even usage is tough.

Risks and disadvantages with money in banks vs currency in hand.

1) Biggest risk factor to note is that the money in banks is guaranteed only upto 1,00,000  INR per person irrespective of the number of accounts and amount of funds deposited. 
This guarantee includes even interest payable. More on this here.
The same website has information on de-registered banks so better to be aware and not dismiss the risks. 
While the government has forced people to deposit money in banks it hasn't increased the limit of guarantee for ages. Your currency on the other hand is guaranteed entirely(read the governor's note on it!).

2) Next point to note is the potential for banks to charge customers at will for any transaction by the banks. Already we have noticed ATM charges and NEFT/RTGS payments being low only because of RBI limits. Debit cards are given for many years validity but some banks charge fees per annum. SMS alerts are charged exorbitantly , cash deposit and withdrawal are charged, cheques are charged, demand drafts too. Use cash and cost of printing is the govt's , use other modes and you pay service charges for everything. 

3) Businesses too pay 1.8%-2.5% usage charges for accepting card payments or wallets, but no separate charges for cash. So most prefer cash to other means.

4) Related to the point above is the potential for the govt to charge taxes on everything. Use currency and there are no charges whatsoever for their lifetime. Even at exchange the notes don't entail any charges. But already the govt charges service taxes on banking and will continue to do so even more at will. Perhaps we should expect new taxes at will to manage revenue.

5) Physical security vs digital security. Unless you are prompt in monitoring your accounts there can be attempted fraud which may go undetected. Of course it's also tough to safeguard your physical currency at home, but that's a different effort altogether. Also the risk of data safety, hackers and fraud by any insider .

6) Emergency situations and calamities are best handled with cash in hand. We have seen server down or card reading errors at some point of time. And internet connectivity is still not reliable all over the country. If you need to make urgent payment and your phone doesn't get SMS to approve then you are stuck. Also the currency stock in banks and ATMs is limited and subject to constraints as we see now.

7) Utility bills payment is also favouring cash over electronic means. No service charges for cash and immediate credit into the account. For other means including online payment there is usually a 3 day time to credit the account so a reduction in last date of payment apart from 2% service charges.

8) There are multiple transaction processing options like visa,mastercard,amex,maestro and rupay. So there will not be one card for all purposes. Cash on the other hand is universal and valid even abroad for exchange.

Advantages of cashless payments vs currency in hand.

1) Black money is always recorded and can be controlled and investigated.

2) No counterfeit currency risk.

3) No problem in finding small change to pay exact amounts.

4) Easier to prove that a payment was made, track a purchase after a few months etc even without a bill.

5) The whole need to carry and physically secure currency is not needed. Cards are protected by PIN numbers so much more secure than a note. And no advance notice needed on how much to carry money is at your disposal subject to bank limits.

6) Wide range of options to pay by cards, online or just by mobile phone apps.

7) Currency printing expenses reduction for the govt.

Monday, September 5, 2011

Interesting information on various places in Bangalore

Found some interesting details about places in Bangalore.Nice blog.

Wednesday, January 26, 2011

E- Stamp paper verification

You can verify the authenticity of stamp papers here. It works only in Internet Explorer.

Wednesday, December 29, 2010

NGO for Medical Negligence cases

People for Better Treatment An NGO working for helping people affected by medical negligence.Bad experience of the person starting it here

Saturday, December 25, 2010

Monday, February 1, 2010

Wednesday, November 11, 2009

Is LTA worth the effort

It depends whether you accumulate leave balance beyond the maximum or not.
Now the rule in most companies is that you must take a leave of atleast 3 days for travel claimed for LTA and also travel for 5 days. Secondly the govt. places restrictions on the shortest path etc.

Best case for gain.
Now you are a person who never takes leave and has a lot of leaves which will lapse if not used up in that year. So the 3 days leave will not make any difference.
You travel and somehow use up the entire allowance ( Say you take a trip from Kanyakumari to Kashmir by flights+taxis). So you gain tax exemption on the entire LTA. Let take basic pay per day as BP.LTA would be 12% * 365 * BP. You will gain 30.9% as tax exemption on 12%BP * 365 which is 13.53BP.The maximum amount you will spend will be not more than 50000 which means 13.53BP cannot be greater than 30.9% of 50k = Rs.15450. To get to this 50000 limit of LTA your pay must be around 24Lpa.

Average case for gain.
You have used up all leaves so taking 3 days off would mean loss of 3 days BP. And you spend only Rs.10000 on the entire travel cost by shortest route. So now the gain is just Rs.3090. You lose .691 * 3 BP and so 2.073BP. To just breakeven BP must be 3090/2.073 ~ Rs.1492.To get BP of 1492 your Annual basic pay must be 544067 and so actual CTC should be around 14Lpa. If you earn lesser than that then you lose money.

The LTA seems like a total waste to me, to try and travel to get a meagre benefit. In the process you don't work 3 days , you spend money in accomodation and sightseeing as well.

LTA maybe useful for those who take leave and anyways travel for personal reasons.

Friday, October 16, 2009

Do we really need food coupons?

Interesting point to note on gift coupons. The ultimate beneficiary is a MNC which does nothing more then print. The buyer(employer) loses money the shop owner loses money and the employee receiving it loses freedom to buy what he wants where he wants.

Saturday, September 26, 2009

Credit Report

Get to know what banks have said behind your back, about your loan/credit card repayment history. Request for a CIBIL report

Best Fixed Deposit rates

Which bank to invest your money in ? Check Best Fixed Deposit Rates

Tuesday, September 8, 2009

Tuesday, August 4, 2009

Newspaper Advertisements Booking online

Book advertisements online for a few leading newspapers.

Wednesday, June 3, 2009

Saturday, January 10, 2009

Beware of Indiatimes shopping

I was trying to buy something from indiatimes website and decided against it after seeing this blog. Plenty of complaints have been blogged against Indiatimes.Your goods are broken,do not work or are different from what is advertised.Customer care does not care and neither can you reach superiors. Since it has the Times name lot of people will unfortunately trust it.

Tuesday, January 6, 2009

Saturday, November 15, 2008

Corporate gossip is a ‘e post it’ website where you can post your Corporate Gossips, Corporate Experience, Chit Chat, Pay Rise, Growth Prospects, Happy Moments, Sad Moments and everything that makes up your daily life at work.

Saturday, October 4, 2008

Monday, September 29, 2008

Friday, February 22, 2008

Income Tax Department lists refund details on website

The Income Tax Department has put on its website the list of income tax refunds
of all salary tax payers which could not be sent to the concerned persons for
want of correct address.

Salary taxpayers who have not received refunds for assessment years 2003\04 to
2006\07 can click on the link below and query using the PAN number and
assessment year whether any refund due to them has been returned undelivered
from the menu `undelivered salary refund management system'.

If any refund has been returned undelivered due to change in address, then the
taxpayer can enter the present address and the refund will be sent to the
taxpayer at the new address.

The link to the website is as under:

http://www.incometa in/CCIT/refundse arch.asp

Wednesday, January 16, 2008

Police refuse to accept complaints ? Post here

This is a site of an NGO started by Ms Kiran Bedi you can go to this site an log your complaint regarding any crime if the police at your place is not accepting your complaint. Then this NGO will mail your complaint to the DGP of your area. You can also use this mail as the legal document in case of filing a case in the court of judgment.
This is to be noted that this site is directly administered by Ms Kiran Bedi so all your mails directly goes to her.
Friends Plz spread this information in your network so that any one in such need can go to this site and launch his/her complaint.

Kiran Bedi's blog

Monday, December 24, 2007

For baldwinians only -- Kenny sir's handwritten letter

Kenny sir has a reply to all those of you who remember him on orkut, in his handwriting! Copy the pics to your system and open at an convenient size.

Friday, September 28, 2007

Tuesday, September 18, 2007

Tuesday, August 14, 2007

Nokia warns over battery overheating risk

Nokia on Tuesday issued a warning over its mobile BL-5C batteries manufactured by Matsushita Battery Industrial Co Ltd of Japan between December 2005 and November 2006, saying that the batteries may overheat while charging.

How to identify a BL-5C battery manufactured by Matsushita during the relevant period

Central government's Grievance lodging website

I came across this grievance lodging website which is managed by Ministry of Personnel, public grievance and pensions. Many central government organizations (16 actually) like postal service, BSNL/MTNL, public sector banks, passport offices come under this.

It is debatable if this is really resourceful and if the issues would ever be addressed. However, there is no harm in trying since it is just a click away now! Also, you can view the status of your complaint.

Thursday, August 2, 2007

Sad trend,Old Age homes booming in India

“Don’t be too be hard on your old parents, you may find yourself in their place.” wrote the famous English writer Compton Burnett-Dame Ivy.

Wednesday, July 18, 2007

Wednesday, July 11, 2007

Tuesday, July 10, 2007

Feed a hungry person.

The sponsors to this site donate a cup of rice for every visit you make to the site.
7000 people die everyday of hunger in India can donate a cup of rice by just a wont cost you a penny....please send it to all in your list..

You can make this your home page to let things happen automatically.

Thursday, June 28, 2007

Golden Rules For Finding Your Life Partner

A relationship coach lays out his 5 golden rules for evaluating the prospects of long-term success

Wednesday, June 27, 2007

1 Rupee = 37 Rupees


Check this out, the one rupee coin you have can fetch you 37 rupees after you melt it and make it into a Razor Blade….



Friday, June 22, 2007

ICICI account holders watch out

Plenty of new charges, be warned about using your ICICI bank accounts ,salary or otherwise.
Cash deposit is Rs.150 :)