Don’t panic about Rs. 500/1000 notes. Banks reassure

|November 9, 2016 0
Image courtesy of Surachai at freedigitalphotos
Post the Rs.500 wipe-out announcement last evening, banks are welcoming the move and urging customers to go through the transition mechanism available without any worries. And digital push is working on the parallel as well.

INDIA: Yes, it has understandably caught most people in a surprise-surprise way but then PM’s Modi surgical strike on black money with sudden announcements on existing Rs.500 and Rs.1000 denominations getting wiped out, should not be a deer-in-the-headlights moment for the white-money folks.

There is ample time and many alternatives to inject oneself into the new currency regime and banks are doing every bit they can to help the customers.

Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank conveys that customers need not worry about their money at all, they have sufficient time to exchange their old Rs. 500 & Rs. 1000 denomination notes. “While they may face some inconvenience for the next few days, their money in the bank remains absolutely safe.”

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ICICI Bank is another bank which is taking extra-mile measures for accommodating the new shift in a smooth and easy way for its customers. It has shared that its branch timings will be extended by two hours on November 10 and 11, 2016 ; branches in prominent locations shall be open from 08:00 AM to 08:00 PM on November 10 and 11, 2016 and all branches will be open on Saturday, November 12, 2016. If required, the bank might also keep the branches open on the forthcoming Saturday, November 19, 2016.

The bank is going to equip its branches with additional cash counters to manage heightened footfall of customers and is providing its branches with the new notes of Rs. 2000/- and the existing notes of Rs. 100/- denomination and of lower value. Among other efforts, it also shares that all charges pertaining to cash deposit in Savings Accounts across all branches will be waived w.e.f. November 10, 2016 till November 30, 2016. Charges related to transactions at ICICI Bank ATMs by ICICI Bank customers will be waived till December 31, 2016.

The rollover won’t be easy for the back-end but banks and other players are trying to put in every effort.

It will be a humongous and intensive task to retrieve approximately 14.95 lakh crore of these notes that are currently in circulation, told Rajiv Kaul, CEO & Vice-Chairman, CMS Info Systems, a big cash management player in the country. “The demonetization is a historic move that augurs well for driving India’s economic growth. Our immediate focus is to come together as an industry (CLA, CATMI) to create an efficient process of transition along with the banks, NPCI and RBI to minimize impact on consumers.”

Kotak Mahindra’s Gupta assures, “We are working to ensure minimal inconvenience to customers until money supply gets fully normalised.

CMS Infosystems will also look to leverage its network to help smaller towns and rural areas that tend to have greater reliance on cash as against the usage of cards. It feels that getting the entire country’s ATM network streamlined to the new order will take two to four weeks.

While the currency-note shift will be in the spotlight, the digital side would be gaining traction it seems.

The Government’s current decision will encourage reliance on online payments in C2C transactions, tells Anurag Saran, CPO, Quikr. “Anticipating the change from offline to online payments, our payment facility tied to an escrow account has ensured that the transactions via Quikr are safe, secure and cashless.  With Doorstep we are already equipped to handle the change and also enable more consumers to transact seamlessly online.”

Banks like ICICI have doubled the daily usage limit of debit cards for use at Point-of-sale (POS) as well as online transactions. ICICI Bank informed that it has offered its credit worthy customers an additional credit limit of 20 per cent on credit cards.

As Gupta reckons, “This move will usher in a cultural change in payments as people will adopt digital banking faster. We should also see a surge in activation of new bank account and debit and credit cards usage.”

Harshil Mathur, CEO and Co-Founder, Razorpay tags it as the most favorable time for online commerce to capitalize on this moment and fuel a change in mindset. “But no change happens overnight. We’re all jittery about accepting forced change, but, in the long run, this helps the government curb the flow of black money & reduces tax avoidance. For some time, until the new currency notes are widely circulated, customers and merchants will be looking at digital modes of making and receiving payments. This is the time to educate people on the benefits of online transactions – convenient, reliable and secure. Physical cash is clunky and I’ve always stated that this archaic form of payments needs disruption.”

ICICI bank stated – “We are communicating to our customers and informing them of the new guidelines as well as the steps being taken by the bank in this regard. We are also emphasising to customers on the benefits of cashless transactions through debit and credit cards, as well as our electronic channels of internet & mobile banking and Pockets, our digital wallet.

Many industry people are applauding the initiative as a path-breaking move by the Prime Minister to eradicate black money from the economy and mitigate the counterfeit money problem, both of which, like Gupta opines, will do good to the Indian economy over time.

Ashok P. Hinduja, Chairman, Hinduja Group of Companies, (India) also noted that coupled with GST and its multiple audit trails, this demonetizing of high value Indian currency notes is the masterstroke by PM Modi which will be long remembered as the biggest reform ever in independent India.

“It deals two body blows – one, to the counterfeit currency racket, which we have been hearing for long is used for anti-national activities and two, right at the heart of parallel economy and eventually, Political Funding- which is the root cause of black money. Because, Governance would now be ring fenced from the temptations of discretion etc. Ease of doing business will certainly improve. We hope that this rollover to new currency notes will be carried out smoothly causing minimal inconvenience to the common man.”

Mathur is upbeat that PM Modi’s bold move to demonetize INR 500 and INR 1000 currency notes from today, will not only suck black money out from the system, but, importantly, give digital payments a much-needed push and lead to the beginning of a new era, in building a cashless society.

Saran seconds, “The demonetization is a bold move by the Government to curb use of fake and dated notes in circulation. It brings more transparency and accountability to cash transactions and is a good step towards a long-term solution.”

So, take note. Be informed but there is no need to get flustered.

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