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Business News/ Politics / India/  Demonetisation updates: Tax dept warns against benami deposits, LS adjourned
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Demonetisation updates: Tax dept warns against benami deposits, LS adjourned

The day 13th of Prime Minister Narendra Modi's demonetisation drive is unlikely to give any respite to the people as RBI holds firm with its daily cash withdrawal limits

The various sectors of the Indian economy are feeling the heat with the ongoing liquidity crunch forcing the people to cut down on their discretionary spending. Photo: APPremium
The various sectors of the Indian economy are feeling the heat with the ongoing liquidity crunch forcing the people to cut down on their discretionary spending. Photo: AP

New Delhi: As banks open after a break on Sunday, the day 13th of the currency note ban is unlikely to give any major respite to the people in terms of either cash withdrawal or deposits. Longer queues are expected at most banks, post offices and ATMs. In Parliament, the opposition parties stick to their demand of Prime Minister Narendra Modi speaking on the issue.

Here are the key developments on the currency note ban:

Providing further reprieve to farmers, the government on Monday allowed farmers to purchase seeds for their current rabi crop with old denomination notes, as part of the steps to ease the impact of partial demonetisation on the rural sector, reports Mint.

The Reserve Bank of India (RBI) late on Sunday stated that banks will have to continue with the withdrawal limits on automated teller machines (ATMs) till any further notice. The move, according to the regulator, comes after a review of the way customers have been withdrawing money from their bank accounts.

The ATMs recalibrated to dispense the news Rs2,000 currency notes will be allowed to withdraw up to Rs2,500 per day, while the limit remains set at Rs2,000 per day on ATMs yet to be recalibrated to dispense the new currency notes.

The income tax (I-T) department has warned people against depositing their unaccounted old currency in someone else’s bank account. The department has decided to slap charges under the newly enforced Benami Transactions Act against violators, which carries a penalty, prosecution and rigorous jail term of a maximum seven years. In a related development, people familiar with the matter said that the department has detected over Rs200 crore in undisclosed income after it conducted over 80 surveys and about 30 searches in cases of suspicious usage of the scrapped currency.

The political reactions are again sharp and ruckus within the Parliament is certain as the ruling and opposition benches remain divided over the demonetisation issue:

Lok Sabha adjourned for the day as opposition continues protests over demonetisation issue. Rajya Sabha adjourned till 3pm.

Bihar chief minister Nitish Kumar: “Prime Minister Modi is now riding a tiger which could damage his alliances, but there’s great sentiment in favour of his move and we should respect that," reports NDTV.

CPI(M)’s Sitaram Yechury: “Let’s first offer tributes for people who have died standing in queues and working long hours in banks."

Union finance minister Arun Jaitley as session began in Rajya Sabha: “Opposition not ready for debate, trying new tactics every day to disrupt Parliament proceedings, reports Hindustan Times.

Congress vice president Rahul Gandhi visited several ATMs in the national capital this morning where he interacted with people standing in long queues to withdraw new currency.

Congress leader Mallikarjun Kharge: The Opposition will continue to press for adjournment motion in Lok Sabha, reports PTI.

Earlier, senior Congress leader Anand Sharma accused Prime Minister Narendra Modi of not following the law in issuance of 2,000 currency notes. He termed the introduction of 2,000 denomination notes an “illegal act" as the notification required to be issued under the RBI Act for printing new currency has not been issued, ignoring what is mandatory under the law, reports PTI.

The various sectors of the Indian economy are feeling the heat with the ongoing liquidity crunch forcing the people to cut down on discretionary spending and opting for retail stores accepting digital payment modes. Even as more people begin to make the shift towards the use of plastic money, supply-chain operations dependent on cash spending are in tatters:

The Indian rupee is trading weak against US dollar and could hit the 70-mark. At 10.42am, the rupee was trading at 68.21 a dollar, down 0.10% from its previous close of 68.14.

The demonetisation of high-value banknotes sparked a surge in sales for chain stores such as Big Bazaar and Reliance Fresh where cards are accepted as customers chose to save the little cash they had on their hands for emergencies. The nature of purchases at these stores has also changed. Consumers are now buying daily consumption items such as fruits, vegetables and dairy and cutting back on discretionary spending because of the economic uncertainty.

Business is being hammered as cash shortage that followed the demonetisation drive has left the supply chain in tatters and consumers in the lurch, reports Mint.

Mobile wallets claim to have gained immensely with the government’s move, reports Mint. Paytm said on Monday it witnessed over seven million transactions worth Rs120 crore on Saturday because of wider cashless payments, after the government withdrew Rs500 and Rs1,000 currency notes.

The collective net profit of 38 listed Indian banks in the quarter to September has been Rs12,425.46 crore, close to 28% less than the year-ago quarter but better than the June quarter. In three months ended 30 June, the net profit of all banks had been Rs8,678 crore.

Many property advisers have predicted land and property prices, particularly that of luxury houses, could fall as much as 30% in the next three to six months. However, several developers and brokers said there is little room for any major price cuts due to rising input costs, and also given that property prices in key markets have remained stagnant due to a three-year slowdown in the real estate sector.

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Published: 21 Nov 2016, 11:34 AM IST
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