••• The International Writers Magazine - Currency Issues in India

Poverty consciousness of RBI and GoI • Murli Menon Another attack on savings in India

On 19th of May 2023, The central bank in India unilaterally with the implicit and explicit consent of the Government of India and the Prime Minister,  changed the promissory note (called Indian Rupee), where the RBI Governor, “promises to pay the bearer a sum of Two Thousand Rupees” to “ I promise to pay the bearer a sum of Two Thousand Rupees if deposited in a Bank on or before 30th September 2023 or exchanged at a bank for lower denomination currency (which too are promissory notes) printed by foreign printers, who are the only one’s laughing all the way to the bank.

In this era of digital currency,  after the first demonetisation on 8th November 2016, the unscrupulous bankers and the foreign currency printers made money by printing the entire currency of India in Rs. 500 and Rs. 2000. Then after seven years, the RBI and Government for reasons best known to them, withdraw the Rs. 2000 notes from the market, to enable the currency printers to print four times the currency and make four times the profit.

There is no intrinsic value of the currency notes and exchanging Rs. 2000 notes for Rs. 500 notes goes against the basic scientific principles of mathematics.

Mathematically to ensure adequate change in the financial system, currency must be printed in denominations of 1,2,5, 10, 20 and 50, progress to 100, 200, 500, 1000 and 2000.

The earlier demonetisation scrapped Rs. 1000 and went against the basic scientific principles of mathematics and printing of Rs. 200 was an afterthought and the cash based economy of MSME’s, solo entrepreneurs and home based businesses without bank accounts crashed due to unavailability and shortage of Rs. 100 and Rs. 200 currency notes. This shortage continues still seven years after the RBI’s whimsical move of demonetisation.

Now in 2023, by withdrawing Rs. 2000 completely from circulation without printing Rs. 1000 notes will result in hyperinflation and the RBI in connivance with the Government and currency printers are sending the Indian economy in the direction of Zimbabwe,  Sri Lanka and Pakistan.

If only Rs. 100, Rs. 200 and Rs.500 (Ask your bank to replace your Rs. 2000 note (which RBI claims is withdrawn but mainstream television anchors are screaming Rs. 2000 is banned, increasing the panic).

Millions of tons of gold were sold by jewellers from the announcement of withdrawal of Rs. 2000 notes by RBI till 23rd May 2023, when banks were scheduled to start exchanging the pink notes for Rs. 500. Unscrupulous jewellers sold gold at inflated prices without invoices to panicked buyers who stored this pink treasure mistakenly complacent and believing that two demonetisations cannot happen in a decade. They were foolish enough to believe the propaganda of the international cartel of currency printers. These unscrupulous jewellers will pawn off these pink paper currency by paying salaries in demonetised notes to their daily wage earners without bank accounts, who will spend hours to get their single note exchanged.

Unscrupulous bank employees, photocopy shop owners and Jamtara scammers with thousands of bank accounts in fictitious names operated for scamming innocent Aadhar and Pan card holders whose details are available in public domain will get notices from the tax authorities for exchanging,  depositing , immediately withdrawing and immediately closing these bank accounts in connivance with bank management.

Till September 30th 2023, as these  notes are still legal tender  hospitals, banks and large corporates, electronic wallet companies, software giants will pay four months salaries in advance  to their staff in pink coloured cash, disposing the pink gold of their owners,  stashed under their swimming pools in bunkers.

The result of this cash disbursal will result in Indian salaried citizens spending millions of man days  lining up to exchange unaccounted cash of their employers into smaller denomination notes.  Banks will start  running out of 100, 200 and 500 Rupee notes unless Rs. 1000 notes are printed. Police will have to  leave their regular duty and will have to be deployed at petrol pumps where tempers will flare as pump owners will either fill petrol for Rs. 200 or refuse change.  Even banks, Government treasuries and the central bank itself will run out of 100, 200 and 500 Rupee notes, as common sense is not so common among bankers.

Prices of gold will shoot up in India and the international price will reach stratospheric levels. Exchange rates will shoot up and countries like Nepal,  Dubai and Oman will stop accepting Indian currency in foreign exchange offices.

Real estate prices will increase,  pushing the EMI slaves deeper into debt. Banks will decrease Fixed Deposit rates and increase  home loan rates.

Provident funds will  cap the interest rates. All this will be done in the name of sacrificing for the greater good! Sunstrokes, epileptic seizures, among dehydrated senior citizens who line up to exchange a single pink note are sacrifice needed to prove patriotism to bank note printing companies.

 Banks were hungrily accepting all Rs. 2000 notes, without identifying the exchangers, as they wanted to call it a day at the earliest.

There will be  several instances where senior citizens  will have to wait to wait for hours to exchange a single Rs. 500/- note. Hospitals will start  turning away patients who pay by Rs. 2000 notes and several patients, including new born children could lose their lives due to the stubborn refusal of hospitals to accept Rs. 2000 notes. However, the proprietors of the same hospitals will have no shame in paying their nursing staff,  employees, daily wagers and even doctors in pink notes, asking them to queue up at their banks and deposit these  notes into their accounts.

The economic, political, banking and mathematical geniuses of India will be forced to immediately print either a Rs. 1000 Rupee note or like Kalidasa a Rs. 1500 Rupee note and the currency printers abroad,  will be happily ready to supply billions of new banknotes. Banks will be forced to tweak their ATM’s once more. A few tax notices will be highlighted by the same fake media who spread the disinformation of nano chip in Rs. 2000 note  to create a impression that the elite in India were getting cornered by recalling Rs. 2000 notes.

All those who were forewarned about the recall of Rs. 2000 quietly disposed off  their pink notes by investing in foreign exchange, real estate and digital gold bonds and gold when still legal tender.

All banks will run  out of smaller denomination notes and shut down their ATM’s and armed guardswill scare away the crowds thronging the bank, as uniformed security guards of banks will stand  guard outside banks on 30th September 2023.

What is going to be the result of this pink note recall? The unorganized/MSME sector in India which includes millions of small businesses which depend on daily cash collections for survival, will be affected by the lack of smaller denomination currency notes, especially Rs. 100/- (U.S. $ 3). Agriculture will be hit hard as farmers will not get  adequate small change for  continuing their farming cycle. The poorest of the poor, who have no access to a bank accounts will continue to live a hand to mouth existence. The percolation of riches will stop and the benefits of our country’s bountiful harvests will not reach the younger generation and the still to be born. Cost of living will rise and the present day bankers will be forced to print higher denomination currencies as hyperinflation will result and the liquidity crunch will force small traders, grocers, barbers, restaurants and new start-ups to shut shop.

The digital economy is not insulated from the cash led one and banks cannot create digital currency without having printed currency in their reserves, as if all bank account holders want to withdraw their digital money through ATM’s, it can create more chaos than we have seen in the last one week in India.  One thing they will create in India is chaos. Fly by night, unscrupulous e-wallet companies will issue loans to unsuspecting customers by accepting pink notes in advance.

The Sanskrit saying “Vinashakale Viprita Buddhi” sums up this recall of Rs. 2000 notes without printing Rs. 1000 notes.

 This whimsical move, which is  a  indication of how one can fool some of the people all of the time.  But for every action there is an equal and opposite reaction!

There is unnecessary panic and stress created all over the country.  Every Indian is searching for ingenuous ways to palm of these pink notes known as “jugaad” in local parlance. Rulers are remembered whilst they rule. Scholars are remembered till they die. It is the malady of this information age that our rulers, bankers, blackrockers and vanguarders are so busy teaching others that they have no time left to learn. The multitude of books on economy and finance are making our economists, mathematicians and bankers ignorant.

© Murli Menon is the author of “ZeNLP – Learning through Stories” and 30 books in ZeNLP Learning Through Stories series and can be contacted over email at ceo at tips4ceos.com

* Why the 2000 Rupee note was withdrawn - Reuters
     

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