Hacker News new | ask | show | jobs
by ppurka 3498 days ago
This may have been a good idea, but it is terribly implemented. Especially, notes of denomination 500 should not have been banned with immediate effect.

In general many poor people, even in cities, do not have bank accounts and face lot of issues when opening such accounts. Sometimes bank require a "reference" from an existing customer to open an account. Sometimes many such poor families (say 20 families - think of it as a big landed area with 20 small houses) live together at a single address, paying rent for a single room, and the banks will refuse to open so many accounts under a single address. Their are several such smaller issues that crop up when trying to open an account that are not well known and that only the people in a particular city or locality face.

These people cannot deposit their savings since they don't have a bank account to begin with. And they definitely have savings in Rs 500 denomination since 500 is nowadays often used in the markets. Essentially, this ban has hit hard the common people. The very rich are hiring others to do the transactions and exchange of money. The lower middle class and poorer sections are left wanting for cash. Hence, good idea, but bad implementation.
1 comments
abhishivsaxena 3498 days ago 

   In general many poor people, even in cities, 
   do not have bank accounts and face lot of 
   issues when opening such accounts.
Sorry, but I absolutely can't stand when I see these kinds of arguments, because everyone reading this would believe this to be true apriori.

Check this article from Feb 2015. Only 23k families were without a bank account. In a country of 250m families! In the last two years I think they opened 200m - or something like that - accounts. http://www.business-standard.com/article/current-affairs/nea...

Agree about it not being very well managed, specially the ATM calibration issue.

But I have no doubt, it would massively help in making digital payments mainstream. Already since 9 Nov, digital payments have overtaken credit/debit cards as stated in this article. Possibly it would even make India an even bigger market than China.

It would also fight tax evasion - right now India borrows 60b$-70b$ every year - when coupled with tax reforms like GST which is set to kickoff next year. Btw, since last few years you need to supply an Tax Id whenever making transactions of more than 1k$ in cash, so this step fits in perfectly with that as well.

There's some short term pain, but the medium/long term gains massively outweigh it.

link
ppurka 3498 days ago
I don't know where they get those statistics? Do they include the daily wage working families? I have several near my own home (in a city) and none of them are able to open bank accounts.
link
abhishivsaxena 3497 days ago
RBI + MoF it seems.

Not sure. The only explanation I can think of is that they don't have Aadhar being illegal migrants or something like that. Or that the bank they are visiting is mismanaged - for which someone should file a complaint.

Btw, you can tell them that they get a full savings account at post offices as well. If they have some savings, it's better for them since interest is higher for families with BPL cards.

link