The document discusses the process of demonetization in India, which involves discontinuing high denomination currency notes to combat black money and counterfeit currency. It outlines the history of previous demonetization efforts, notably on November 8, 2016, when Rs. 500 and Rs. 1000 notes were rendered invalid, leading to a significant impact on the economy and financial institutions. Advantages include the reduction of black money, increased tax revenue, and structural changes in the banking system, although it also caused immediate challenges like deflation and long queues for currency exchange.

1. US PRESIDENTIAL ELECTION 2016

2. DEMONETISATION

4. CONTENT
• WATH IS THIS?
• WHY IT REQUIRES
• HISTORY OF DEMONETISATION
• HOW IT HAPPENS
• WHY SO RUCKS IN COUNTRY
• ADVANTAGE
• IMPACT

5. WHAT IS THIS
• Demonetization is process of discontinuing of
current currency units and replacing those
currency units with new currency units.

6. WHY WERE THE NOTES DISCONTINUED?
• TO END THE CIRCULATION OF “FAKE INDIAN
CURRENCY NOTES”
• TO COMBAT THE BLACK MONEY.

7. HISTORY OF DEMONETISATION
• 12 Jan 1946, TOTAL ISSUE = RS. 143.97 CRORES
(high denomination) WHEREAS,
TOTAL EXCHANGED = RS. 134.9 CRORES.
• THUS, ONLY RS. 9.07 CRORES WERE PROBABLY
‘DEMONETIZED’. MORE OF “CONVERSION”, THAN
“DEMONETIZATION”.
• NOTES OF DENOMENATION 1000 AND 10000
WERE WITHDRAWN AND 1000, 5000 AND
10000 WERE INTRODUCED.

8. • 16 Jan 1978, Finance Minister H.M. Patel,
Janata Party coalition government had again
demonetized bank notes of 1000, 5000 and
10000 rupee, as a means to curb counterfeit
money and black money. BUT IT WAS A FAILURE
• 8th November 2016,

10. HOW IT STARTS
• Anil bokil founder of economical idealistic
NGO was behind all this scene, Instead of
meeting PM first, he met Rahul Gandhi and
given this idea to him first
• But Rahul didn’t gave any attention and
meeting adjourn in 15 seconds only.
• Mr. Bokil took appointment of PM for 10
minutes. But in fact this meeting continued for
more then 2 hours and proposed….

11. • Demonetization of tenders of Rs. 500 & Rs.
1000.
• Not to issue of any new currency notes, higher
the Rs. 100
• Revoke the complete tax system and just
impose a 2% transaction charges on Payments
higher then 1 lakh.

12. • TOTAL 03 NOS OF NOTIFICATION ISSUED ON
08 NOV
• Existing Rs 500/- and Rs 1000/- notes ceased
to be legal tender AND Old notes, up to Rs.
4,000/- can be exchanged at banks until
December 30, 2016
• Exceptions list, where the old notes can be
used
• Introduction of a two thousand rupee note.

13. Q. Why did the RBI print Rs. 2000 note first?
Ans. Total demonetized amount
6.32 billion notes = Rs 1000
15.7 billion notes = Rs 500
Since Rs 1000 notes being replaced by Rs 2000
notes, then
6.32 billion/2 = 3.16 billion notes of Rs
2000 denomination

14. • Total notes to be printed = 3.16billion + 15.7
billion = 18.86 billion notes
• India has four currency printing presses
Dewas and Nashik = Government’s
Security Printing and Minting Corporation of
India Limited (SPMCIL)
Mysuru and Salboni = RBI’s Bharatiya
Reserve Bank Note Mudran Private Limited
(BRBNMPL) has two more factories

15. • SPMCIL printing capacity = 44 billion notes/
day
• BRBNMPL printing capacity = 65 billion notes/
day
• Total = 109 billion notes
• Printing begins after Urjit Patels taking over of
office i.e. from 07 sept
• 62 days * 109 billion notes/ day = 6.76 billion
notes till Nov 07

16. • Just 1/3 of 18.86 billion notes get printed.
• Realizing this constraint, government decided
to print the Rs 2,000′s first since at least in
value terms , Rs 6.3 lakh crore printed by
November 7
• 40 percent of the cash removed in value terms.
• Also, Rs 2,000 notes are logistically easy to
transport.

17. • But, both RBI and government miscalculated is
the ATMs were not re-calibrated and, more
importantly, the Rs 2,000 notes were
worthless for transaction.

18. WHY SO RUCKUS IN COUNTRY
• Previous demonetization, percentage of the
demonetized currency in the economy was
around 5–7 ℅ only, aggregate value is Rs 55
crores.
• But this time, around 86℅ currency
demonetized, aggregate value is approx Rs
14,00,000 crores.

19. ADVANTAGE
• Large sums of cash on which no income tax has been
paid (black money) and FICN is out from circulation.
• People disclosing their black money by depositing in
bank accounts, government gets a good amount of
tax revenue
• The Maoist and terrorists sitting over black money /
FICN are in fix.
• The Hawala industry collapsed .

20. • The Pakistan sponsored machinery of printing of fake notes
destroyed .
• Free and fare elections as only white money plays and also
less election spendings.
• They can not invest on others name as (Benami transaction
act) if any will be forfeited by Government
• Ending educational mafias hefty donation for admission.
• No dowry

21. • Smugglers, anti social element find it difficult to carry out any
illegal activities , as money will leave an evidence for cops.
• Money Would Not Be Available To Bribe The Currupt Officials.
• The Foreign Investment Will Increase And The
Demonetization Will Be Followed By Tax Simplifications.
• The banks and financial institutions will be flush with money,
interest rates goes down, capital will be available at cheap
rates.

22. IMMEDIATE IMPACT
• Heavy Deflation
reduce the total currency circulation in
economy - leading to deflation. Deflation
increases the value of money that we have
because the total money supply goes down but
the commodities and things available in the
market have not gone down.

23. • lead to Inflation (not overnight)
lot of people who have a lot of cash, legally
earned, which they will deposit it in the bank.
Now the bank with more deposits can do more
loaning. Credit (loans) will become easier and
interest rates may come down. More loans given
out increases broad money supply and creates
inflation. But this will happen slowly, not over-
night.

24. • WHAT HAPPENS TO NOTES WHICH ARE NOT
RETURNED TO BANKS
• These Currency will be deemed as waste past
31/12/16 or 31/03/17, thereafter the
equivalent New currency takeover the same
and will be a state property as Gold Guarantee
is already there for proportionate Un-
deposited old currency.
• It would be a win-win for Govt.

25. EVASION ATTEMPTS
• Gold purchases
• Donations
• Multiple bank transactions
• Railway bookings
• Municipal and local tax payments
• Backdated accounting

26. PROBLEMS
• WEDDING SEASON
• CULTIVATION SEASON
• UNPREPARED BANKS / ATM’S
• LONG QUEUE FOR SMALL DENOMINATION
EXCHANGE / WITHDRAWL
• INITIALLY NO MECHANISM FOR ELDERLY PPL AND
WOMENS
• AGAIN AND AGAIN WITHDRAWAL BY SAME PPL

27. MEASURES
• BANKING CORROSPONDENTS LIMIT OF HOLDING
CASH
• ATM’S RECALLIBERATED ON WAR FOOTING
• POSTAL NETWORK ALSO UTILISED
• HAND HELD MICRO ATM DEPLOYED
• CASH WITHDRAWAL FROM EARMARKED PETROL
PUMP
• WITHDRAWAL LIMIT ENHENCED 20000 TO 24000
RS
• CURRENT AC HOLDERS LIMIT UPTO 50000 RS

28. • SUBSIDIESED RATE FOR AGRO PRODUCTES
• E PAYMENT IMPLEMENTATION BY GOVT AGENCIES
• TX CHARGE ON USE OF ATM WAIVED OFF
• SEPARATE QUEUES IN THEIR BRANCHES FOR SENIOR
CITIZENS
• PENSIONERS ANNUAL LIFE CERTIFICATE DEPOSITION
EXTENDED UP TO 15 JAN 2017.
• TIME LIMIT FOR EXCEPTANCE OF OLD NOTES
EXTENDED UPTO 15 DEC
• DEPOSITION OF OLD NOTES IN BANKS UPTO 30 DEC
2017

29. THE END