Demonetization Short Term Risks: Solutions

Below are the key short term risks identified by you as a result of currency demonetization. Kindly review and share specific solutions that must be implemented to address these risks. Once you share them, we will take this up with highest levels in the Government so actions can be taken to mitigate whatever feasible.

We look forward to your inputs

Demonetization – Short Term Risks

1. The number of benaami accounts will show a sharp rise
2. Major suffering and loss of business for petty traders who are not on the credit/debit card circuit
3. Hardships may come up for all those who have opened Jan Dhan Bank account as they might be scrutinized
4. There will be loss of job for the daily wages workers
5. There will be great hardship for rural poor
6. There will be loss of business for small vendors selling his wares on cash only
7. The poor people who are not using credit card and not on banking system will struggle
8. Rural population will have travel long distances for banking facilities and exchanging currency
9. Buying household items from the local markets will become tough as the vendors will not accept cards
10. People will have to buy products at MRP from bigger departmental stores
11. Banks might get overloaded with cash and might reduce interest rates
12. This in turn could put the old people, whose major source of income is interest on deposit in a tricky situation
13. Small traders will suffer to some extent as they will not be able to give change to the currency note of Rs.2000
14. Banks will not be able to do their routine work as they have dedicated all resources to exchanging, and will suffer losses
15. There will be huge loss of productivity as people will have to stand in lines at the banks to make transactions. more  

View all 106 comments Below 106 comments
There is problem. Scarcity creates demand. People are standing in the 'Q' to get as much currency as possible. People who can manage with out cash should not visit banks so that others who are need can draw without much difficulty. RBI and Banks are doing very good job. Let us encourage and motivate them. Once people get used to using digital money the problem will get resolved. We are seeing banks doing banking operations with having branch ( brick and mortar). IDFC bank has started. Short term solution is customers having cards should manage with out visiting branch. more  
In order to minimise the hardship to rural population due to demonetization the following could be done.( since I am living in urban, I lack much practical experience) 1. More number of Rural banks especially Micro Banking/Mobile banking could be started to cover as many rural villages as possible. Prior intimation to the villagers about the time of Micro Bank/Mobile bank will visit concerned villages could be sent through District Collector/Tahsildar/Revenue Inspectors like Tom Tom/Loudspeaker announcement. 2.This amount via JAN DHAN BANK ACCOUNT could disbursed and amount could be limited to 5000/- per week or two weeks as the RBI/Bank decides. 3.Debit cards could be got prepared for villagers for getting inputs to their field crops and this card can be used in the SWIPE MACHINE in the Inputs(like seeds,fertilisers, pesticides etc) distribution center or selling point. If villagers pay charges for electricity, this card can be used for Swiping in the Machines in the local EB office( this should be ensured by concerned State Govt.) 4. Village youths can be utilized for organizing camps / sending intimations/etc more  
Couple of initiatives may be helpful. Make digital payments mandatory for Tier I, II & III cities for 1. Establishments occupying 1000 sq ft and above, 2. All petrol and diesel retail units, 3. All Govt establishments. Further holding cash in currency form valuing more than Rs 50,000/- will be a crime. If caught will be subject to 7 years of imprisonment. No discretion. Thanks more  
The government has been responsive to the issues and taking immediate steps. One suggestion for the poor in slums and rural areas could be to distribute part of the government Yojanas to provide employment guarantee to distribute quality groceries through the well spread chain of Ration-Shops and the remaining through the aadhar accounts like JDY. Thus the pressure on cash could be largely reduced to these weaker sections. more  
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