Govt demonitises Rs 500, 1000 notes: Here is how India Inc reacted

Bankers and industry leaders said that it has been "a bold and revolutionary" step, and affirmed their commitment to smoothen the transition.

By: Express Web Desk | New Delhi | Updated: November 8, 2016 11:59 pm
500, 1000, 500 rs, 1000 rs, rs 500, rs 1000, rs 500 invalid, Narendra Modi, black money, 1000 invalid, 1000 rupee notes, notes made illegal, Narendra Modi notes announcement, black money, industry reaction, India news, latest news, indian express There has been several statements issued by bankers and industry leaders.

In a step to curb the major issue of black money, Prime Minister Narendra Modi on Tuesday, introduced demonetization of Rs 500 and 1000 currency notes with effect from midnight. Welcoming this step, introduced by the PM, bankers and industry leaders said that it has been “a bold and revolutionary” step, and affirmed their commitment to smoothen the transition.

There has been several statements issued by bankers and industry leaders.

“We will strive to restock ATMs at the earliest and make them operational. The Government has given enough exemptions to ensure urgent needs are met. We will work round the clock to ensure that customers have a smooth experience,” State Bank of India Chairperson Arundhati Bhattacharya said.

ICICI Bank chief Chanda Kochhar said, “It’s perhaps the most significant move ever taken to curtail the parallel economy. It will give a sharp boost to all formal channels of payments which in turn will help the formal economy to grow at a faster clip in the long term.”

“It is a big reform which no one expected and will have a huge impact on people who are hoarding money and not disclosing money for tax purposes,” mortgage major HDFC Chairman Deepak Parekh said.

Mahindra Group Vice-Chairman Anand Mahindra tweeted, “success required an element of surprise and its incredible that this master stroke was kept confidential.” In a lighter vein, he added, “Urgent message to anyone who robbed a bank tonight: You just got robbed…”

Sajjan Jindal of JSW Group termed the move as an “amazing and very brave step to curb black money.”

Nirmal Jain, Chairman of leading NBFC IIFL, said the move “is a very powerful measure to curb black money. The Prime Minister has kept his promise of taking stern measures against black money. It was done some 30 years ago and since then a huge build up of unofficial money had happened. On the larger impact of the move, he said it will have deflationary impact in general and more specifically on real estate prices and make homes affordable. It is also indirectly a boon to honest tax payers.”

Mukesh Butani, Managing Partner, BMR Legal, said, “An unprecedented, bold move leading charge from the front, the PM in the most secretively planned, seamlessly executed a move to root out unaccounted and counterfeit currency. A combination of national security concerns and wider agenda to filter out unaccounted income guided the Government to make this move. Figures of high denomination currency in circulation in past 5 years compared to growth in the economy pointed towards indicators of unaccounted money in circulation. Timing was perfect – a month after closure of the income disclosure week and a week after Diwali such that the impact of short term disruption in festive period is minimised.”

Co-founder and CEO, CoinTribe, Amit Sachdev, said, “PM Modi’s move is a watershed moment in India’s fight against the ubiquitous black money issue executed with the finesse and secrecy this issue deserves. While this will have several significant benefits for the economy in the long term, there is likely to be a negative impact on sectors with high cash economy in the immediate term. Sectors like Real estate, construction material, unorganized trade and services will see significant pain in the near term. With liquidity drying up, both NPA and demand for working capital credit are likely to go up. In view of bank’s ongoing NPA issues, how fast will banks react to this situation will be interesting to watch. With limited tax arbitrage between organized and unorganized segments, India will see much sharper move from unorganized to organized segment.

In the long term, though, this is likely to drive several benefits for the economy. India has made the first move from cash economy to a digital economy. Larger amount of savings and cash will find a way into the mainstream economy and be deployed for physical and financial asset creation. Use of digital currency and payment systems driven by UPI, wallets and cards will create enormous transparency and paves way for faster evolution of Fintech companies in India especially in transactions and Online lending space.

Mr Modi has made the right investment for the next generation. This move should improve India’s position on transparency and corruption in the global league table enabling higher capital flow (FDI/FII) into India. It would be good step for government to think of another VDS scheme with 70-80% penalty rate to bridge fiscal deficits.”

In a statement, Kunal Bahl, Co-founder & CEO Snapdeal said, “We welcome the Government’s bold and courageous move to weed out black money, which will have significant long term benefits for the economy. With this, the quantum of India’s economy moving through the digital pipes will witness massive growth. Both Snapdeal and FreeCharge are committed to supporting all such initiatives.”

Anuj Puri, Chairman & Country Head, JLL India said, “The banning of higher currency notes is a major move which will help curb unaccounted-for cash in the real estate sector. We have just witnessed a tremendous step towards increased transparency in the Indian real estate industry. The effects will be far-reaching and immediate, and shake up the sector in no uncertain way. Stricter measures against black money have for long been required to help bring about greater transparency, give the Indian real estate sector more credibility and make it more attractive for foreign investors. Black money deals are more common on the unorganized market, but this practice has, in fact, been on the decrease with greater awareness on the part of buyers. Before too long, the caricatured version of black money driving Indian real estate is no longer applicable.”

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First Published on: November 8, 2016 11:11 pm
  1. R
    rana
    Nov 9, 2016 at 5:37 am
    less than perfect move...black money is only going to change denomination with time....from 1000 to 2000
    Reply
    1. B
      bharatNara
      Nov 10, 2016 at 2:32 pm
      ये जो कल से ५०० और १००० के नोट बंद होने की खबर सुनकर,lt;br/gt;lt;br/gt;महिलाओं के जमा पैसे को कालाधन बताने वालो से कहना है,lt;br/gt;lt;br/gt;कि वो पैसा कालाधन नहीं....lt;br/gt;lt;br/gt;आपकी मेहनत और सूझबूझ से बचाया हुआ धन है....lt;br/gt;lt;br/gt;अपने परिवार की आपातकाल में मदद करने के लिये जमा किया है....lt;br/gt;lt;br/gt;🕉lt;br/gt;किसी माँ ने अपनी संतान के लिये....lt;br/gt;lt;br/gt;किसी पत्नी ने अपने पति के लिये....lt;br/gt;lt;br/gt;तो उनका मजाक ना बनाये....lt;br/gt;lt;br/gt;उनके जमा धन में कुछ और धन मिलाकर बैंक जाईये....lt;br/gt;lt;br/gt;नोट बदलाकर उन्हें वापस दिजिये.....lt;br/gt;lt;br/gt;देश की सरकारें आती जाती रहेंगी.lt;br/gt;lt;br/gt;पर हमारे घरों की सरकारें हमेशा हमारी हमसफर रहेंगी...
      Reply
      1. G
        GNS
        Nov 8, 2016 at 9:31 pm
        I give it to you, NAMO : excellent move to rattle the corrupt.lt;br/gt;Those who have these notes legitimately have nothing to fear.lt;br/gt;They can exchange or deposit in their bank accounts.lt;br/gt;Most of India's black money is domestic.
        Reply
        1. P
          PKR
          Nov 9, 2016 at 7:08 am
          You think the 2000 notes will be easily available? Modi hoodwinked stan by threatening Indus water treaty before the surgical strikes ,took all the corrupt for a ride as he banned the notes ,but the media focussed on NDTV ban......He has eased the discomfort of giving up the high notes by promising more.....
          Reply
          1. L
            Lakshman
            Nov 8, 2016 at 7:12 pm
            Oh my God! What would happen to TN's container culture? No luck to the by-election voters?
            Reply
            1. J
              J.S.Dugal
              Nov 13, 2016 at 5:32 am
              Demonetization has has never worked and never will it is a B S, a hoodwink to get brownie points for elections. Counterfeit currency starts as soon as demonetization starts.
              Reply
              1. M
                masterstroke
                Nov 8, 2016 at 7:09 pm
                Hehehehe.. I would love to see RaGa handle this masterstroke
                Reply
                1. M
                  msiyer
                  Nov 9, 2016 at 3:18 am
                  It is utter naivety to think that the Big Corrupt did not know about this move a few months in advance. It is also delusional to think that any government would want to really curb corruption.lt;br/gt;lt;br/gt;What bothers me most is that my hard earned money, which is brutally taxed, needs to be deposited in the banks, but can only be retrieved if I abide by their rules.lt;br/gt;lt;br/gt;One of the most basic rules of economy I believe in is "What is in your hands is what you own". If my money exists only in the digital realm and can only be used the way THEY dictate, I am enslaved.lt;br/gt;lt;br/gt;Tomorrow, they can say that I need to pay the banks to keep my money safe and I will still be voiceless.
                  Reply
                  1. P
                    Pooja
                    Nov 9, 2016 at 4:22 am
                    You dont know anything about economy....
                    Reply
                    1. R
                      rajan luthra
                      Nov 9, 2016 at 4:23 am
                      Fake money goes out of circulation. Terrorists will be losers for the time being. Plastic money will be more in vogue. Common man will be shortchanged but ultra- rich are not likely to be impacted.
                      Reply
                      1. R
                        Raman Vr
                        Nov 8, 2016 at 10:09 pm
                        Have you not heard his spokesperson Surjewala? He funnily asks why ban 1000re. notes and introduce 2000 re notes. They ignore the fact that the new notes have embedded micro chip.
                        Reply
                        1. R
                          Ruru Koshy
                          Nov 9, 2016 at 7:53 am
                          Nothing, but the foolishness of burning your house in the fear of rats inside it...
                          Reply
                          1. S
                            sk
                            Nov 8, 2016 at 7:59 pm
                            It is going back to stone age. A legal tender signed by RBI governor and carrying authority of state has been declared invalid. The problems for people have just started.
                            Reply
                            1. C
                              Chennai Seenu
                              Nov 8, 2016 at 9:20 pm
                              It was never declared invalid, if you have 1000rs you can exchange for 100rs in the bank. Or better yet deposit it in the bank and take it later.
                              Reply
                              1. S
                                s s nair
                                Nov 9, 2016 at 1:40 am
                                Excellent move to forget the failure in governance and maintain peace in J and K.
                                Reply
                                1. R
                                  Ravi
                                  Nov 12, 2016 at 12:53 pm
                                  Poor rats of the Koshy variety. Shame that the vast peaceful home India is to millions, still shelters trairot rats of the koshy types.
                                  Reply
                                  1. M
                                    Mr.SK can
                                    Nov 9, 2016 at 3:34 am
                                    @Mr.SK, Can u explain How it Will..
                                    Reply
                                    1. V
                                      vimal sharma
                                      Nov 9, 2016 at 3:50 am
                                      Please be prepared for misleading messages by some political parties. Don''t let them fool us. We citizens may face issues for a few days, but this is start of Bahot Ache Din! India had an infection, needed a surgery, will pain for some time but we will come out healed and stronger than before!lt;br/gt;Please support Govt this time and teach corrupt people a lesson.lt;br/gt;It''s our duty to stand with Govt this time!lt;br/gt;Jai Hind!
                                      Reply
                                      1. V
                                        vimal sharma
                                        Nov 9, 2016 at 3:51 am
                                        this is a master stroke by Modi to curblt;br/gt; black money, lt;br/gt;corruption, lt;br/gt;fake currency, lt;br/gt;rimes and terrorism. lt;br/gt;Kudos to Modi. We are with him.
                                        Reply
                                        1. V
                                          Vinod
                                          Nov 9, 2016 at 6:01 am
                                          You seem to be lost in medieval and ancient archaic 'Rules of 'Saving''. Money is meant to 'Create Wealth but not Speculation'. Even though ultra rich know and diverted their Money, they can't bring back unscrupulously and 'Speculatively and cause Distress to 'common man'. The only way they can bring back the money is through FDI's. India has the capacity to 'Create Wealth' which is evident from ancient times and common man will feel incentivised for his hard work. 'Gone money will be gone' From now on every penny is accounted, taxed and scrutinized. It is like conducting 'Surgery on tumor'. You can't do much about tumor and here 'ultra rich'
                                          Reply
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