Demonetisation At What Cost? The stark ground reality

Indians stands in queue outside a post office to deposit and exchange Indian currency of rupees 500 and 1000 in Ahmadabad, India, Thursday, Nov. 10, 2016. Delivering one of India's biggest-ever economic upsets, Prime Minister Narendra Modi this week declared the bulk of Indian currency notes no longer held any value and told anyone holding those bills to take them to banks.(AP Photo/Ajit Solanki)

Indians stands in queue outside a post office to deposit and exchange Indian currency of rupees 500 and 1000 in Ahmedabad, India, Thursday, Nov. 10, 2016.

I keep hearing the usual phrases of ‘Hurrah, ‘Kudos’, “Mubarak’ and all such adjectives praising the government for a ‘surgical strike’ on the nemesis and obstacle to ‘India shining’, ‘India’s economic growth’ – ‘India’s Black Money’.

And then I look at my own experience of the last 3-4 days with the banks and the ATMs, and I wonder why the congratulatory tones? What is really happening at the ground level?

Let’s list the points that really hit me – in no logical order.

1. The Banks’ Lack Of Readiness

None of the banks were ready or even slightly prepared for the demonetisation. They were just not ready for the rush and the long queues at the branches – be it for withdrawal, deposit or exchange.

2. No Cash At ATMs

The ATMs are empty. They are just not configured for the new notes. The ATMs are not ready to sustain long queues, because the money runs out pretty quickly and the queues disintegrates into disgruntled and frustrated individuals.

The logical questions are –
Why weren’t the ATMs configured to accept the new notes?
Why aren’t there enough Rs. 100 notes in the ATMs?

It is a crying shame that after almost 5 days – i.e., since 8 November 2016, the so called ‘A’ category banks such as SBI, Central Bank, Axis Bank, HSBC Bank, HDFC Bank, Yes Bank, Citibank and many others do not have enough cash to keep their ATMs running 24×7, with the required notes.

Here is an excerpt from the attached article (see below) that highlights the problem with ATMs very succinctly – ‘More than 2.2 lakh ATMs have not been recalibrated to dispense cash – this essentially means they don’t have the software to process the new high-value notes of Rs 500 and Rs 2,000. Banks are using soiled notes of Rs 100 to meet the cash crisis.’

3. The Pink Rs. 2000 Note

I only have questions here…
– PINK?!?! REALLY?!?!
– Why did the government release the new Rs. 2000 notes first – why not the new Rs. 500 notes?
– Who has and where is the change to break the Rs. 2000 notes?
– Why would the common man need Rs. 2000 notes? For what purpose? As I understand it, per my own experience, the denominations that the common man needs for most part are Rs. 500 and below.
– If the purpose of banning the Rs. 1000 was to curb black money, would not Rs. 2000 be more attractive to the people with the black money? Isn’t that basic common sense?

4. Where Are The New Rs. 500 Notes?

It think it would have been better for the government to release the new Rs. 500 notes, because ultimately we are going to have an actual pain in the butt, because of the swollen size of our wallets, due to an abundance of Rs. 100 and other miscellaneous notes stuffed in our wallets. It would have been obviously easier to have a butt saving mix of Rs. 100 & Rs. 500 notes.

5. Poor Planning – High Demand Vs Horribly Low Supply

From my conversations with different bank employees, it can be safely assume that there has been no prior or proper planning for the timely printing and disbursal of new notes, resulting in high demand and barely enough stock. Even the Rs. 100 notes have experienced demand that far exceeds the supply.

Unless there is a better management from top down, most banks expect that it would take at least a month for the situation to normalise in their respective branches.

6. ‘Kala Dhan’ Standing In Queues

The whole exercise of demonetisation was supposed to flush out the guys with the ‘kala dhan’ (black money).  During my visits to a few banks and ATMs, and standing in queues with the rest of the guys, I am yet to see a fancy car pull up and the owner come out with bags full of cash to deposit in the bank. What I do see is the disgruntled, frustrated and troubled common man waiting patiently in queues to either exchange, deposit or withdraw moniesvery often to be turned away by the bank saying the counter is ‘closed’, and to come the next day.

7. Road To Cashless Economy?

This may sound simplistic, but if the government really wants to make this a cashless economy, then maybe they need to think of ways to make that happen, rather than steps like demonetisation.

8. The ‘Real’ Ground Reality Perspective

This is actually a true story. I have only changed the actual amount.

The common man who lives in the slums, often cannot have a bank account, because such a person does not have the proper documents, such as proof of residence or identity – viz. PAN Card, Passport, Driving Licence, Voters Card, Aadhar Card and such.

So this person slogs blood, sweat and tears, and saves money and stores it in some box, or place for the future, or for a rainy day. Now suddenly, because of the demonetisation all the Rs. 500 and Rs. 1000 notes  are worthless pieces of paper. Where and how is this person going to exchange it – at which bank?

This desperate common man has no choice but to go to some ‘off the grid’ people who will exchange the old notes for a commission of 10-20% or more. And the poor common man who had saved – e.g. Rs. 10000 – gets back Rs. Rs. 8000 or Rs. 9000, depending on the negotiated commission. Doesn’t the sad injustice of this hit you?

9. Citizens Are Paying For Lack Of Preparedness

Here is an article that echoes my thoughts on demonetisation of Rs. 500 and Rs. 1000 notes. Do read.

‘Harrowing stories come as India ‘patiently’ deals with demonetisation ordeal’

To conclude, the final question is – Who is really hurting because of the demonetisation – the rich or the common man? I think the choice is quite obvious.

For more posts/articles on The 4Ms ~ Music Mirth Moments Money, please visit my blog –

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