Demonetization - A Power capsule to eradicate black money and digitize India

Three major financial steps of NDA Government led by Shri Narendra Modi Establishment of SIT in a first cabinet meet for bringing back black money deposited outside India. Best efforts for GST DEMONETISATION

European countries accepted euro in 2002 and demonetised their own currencies, Nigirea, Ghana, Russia, Etc. (euan by china was the first paper currency of the world in the world in 1264. in India it first paper currency was created in the year 1861.

GOVT. STEPS FOR DIGITISED INDIA OPEN BANK ACCOUNT THROUGH JAN DHAN YOGNA CONNECTED WITH ADHAR CARD OPTION OF INCOME DISCLOSURE SCHEME DEMONETISATION CASHLESS ECONOMY

What is Demonetization ? Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.

Moving Towards A DIGITAL ECONOMY

MAJOR THREE TYPES OF PAYMENTS 1. BUSINESS TO BUSINESS (NEFT, RTGS) 2. CONSUMER TO BUSINESS (DEBIT CARD, CREDIT CARD) 3. CONSUMER TO CONSUMER (E WALLETS)

Ways to go cashless NET BANKING/ACCOUNT TRANSFERS There are three services available for such a kind of transfer: National Electronic Funds Transfer (NEFT) Real-time Gross Settlement (RTGS) Immediate Payment Service (IMPS)

National Electronic Funds Transfer (NEFT) In NEFT, the money gets transferred to another bank account during bank working hours, in hourly batches. Transaction timings for NEFT is 8.00am to 7.00 PM in six batches .(upto 10 lacs)

Real-time Gross Settlement (RTGS) RTGS is done for between Rs. 2 Lac and maximum 10 Lac. They can cost somewhere between Rs. 30 to Rs. 55, depending on the value of the amount transferred(temporarily these charges are removed by Government to imbibe Cashless India ) No waiting period involved so it creates time value.

Immediate Payment Service (IMPS) The facility of IMPS is available 24*7, and one can transfer the money instantly. The maximum amount one can transfer through IMPS is Rs. 2 Lac. Immediate transfer (24*7) (11 digit IFSC – Indian financial system code)

CHEQUES/DEMAND DRAFTS If not internet banking, another way to receive and make payments is through cheques or demand drafts.

Debit Card A payment card that deducts money directly from a consumer’s account   to pay for a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases.

Credit Card Credit card is a card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing.

Prepaid Card A card issued by a financial institution that is preloaded with funds and is used like a normal card. (for travelling) (all link with international service provider like master card, visa or Indian rupay)

E-WALLETS E- Wallets are online prepaid accounts where one can store money, to be used as and when required. (e.g. Paytm even available through mobile)

SBI BUDDY

UNIFIED PAYMENTS INTERFACE (UPI) A Unified Payment Interface (UPI) is a single window mobile payment system launched by the National Payments Corporation of India (NPCI). (advantage – payment is transferred to account and not e wallet)

Gift/Forex Cards These are prepaid cards which have certain cash limit assigned to them. These are readily accepted cards and can be used at any shop and can also be used for online purchase of products.

E- Coupons These electronic coupons are offered by various online mega stores. (e.g. Ola, Uber)

Physical coupons These are paper coupons which come in small denominations of Rs 10 to Rs 50 with a validity of 6 months to 18 months. These are used by corporate to reward their employees. The best use of these coupons can be done in buying meals from places such as Pizza Hut, Dominoes, KFC, Big Bazaar, etc. Out of many, two big giants that are providing these coupons are Sodexo and Ticket Restaurants.

AEPS (Aadhaar Enabled Payment System) Going ahead, you can use Aadhaar cards as a debit card in various merchant stores. These cards have been already linked to your bank accounts. You will be provided with a finger scanner at the merchant’s store to do your payments. Aadhaar-cum debit cards will allow you to do micro- payments.

USSD –Unstructured supplementary service data Enter *99# Enter 3 letters of bank name or IFSC code first four digit Select option of fund transfer Payee mobile number or MMID Enter amount and MPIN leave space and enter first four digit of account number

LETS FIND ADVANTAGES OF DEMONETISATION & CASHLESS ECONOMY

Where does India Stand? Long way to go…….. Only 32% of total transactions in India are cashless. (Economic Times, Dec 3, 2016)

The world's most cashless countries Name of the country Rank Noncash payments' share of total value of consumer payments:  Percent of population with a debit/credit cards South Korea 10 70 58 Germany 9 76 88 USA 8 80 72 Netherlands 7 85 98 Australia 6 86 79 Sweden 5 89 96 UK 4 Canada 3 90 France 2 92 69 Belgium 1 93 Source: http://www.cnbc.com/2014/11/20/the-worlds-most-cashless-countries.html

Correlation between Cashless transactions and Corruption in the countries Transparency International (TI) publishes Corruption Perception Index (CPI) for the various countries of the world. The least corrupt 20 countries of the world include all the top 10 cashless economies shown in the previous table Source: https://www.transparency.org/cpi2015/#results- table

INCOME IMBALANCE AND NAXALITES 1% have 54% worth in India. E. g INCOME IMBALANCE AND NAXALITES 1% have 54% worth in India. E.g. antilia and dharavi

DEFICIT FINANCING

FAKE CURRENCY AND TERRORISM

To curb black money – approx 3000000 crore

GDP DOUBLE DIGIT TARGET (TO COVER UNSTRUCURED ECONOMY) (CHINA HAD OF DOUBLE DIGIT FOR 3 DECADES)

TO BE SUPER POWER, BE ECONOMIC SUPER POWER – support friends and restrict enemies

GOA state is putting effort to become first CASHLESS state (as traders as habit due to foreign/local tourist)