Nearly three crores in new notes were found in a Bengaluru apartment where tax officials faced an elderly woman and her two dogs.
The Income Tax department had learnt that its officials tried to search the apartment in the city’s Yeshwanthpur area yesterday after a tip-off but the woman inside refused to chain her dogs. The animals were described by the investigators as “ferocious”.
Today, the officials finally scored access into the apartment with the help of neighbours and the police and found a room that was locked. Officials monitoring the house had seen a visitor entering before dawn.
“The locked room was opened and unexplained cash amounting to 2.89 crores was found, including Rs. 2.25 crore in new 2,000-notes,” an official said.
There have been a series of raids in Bengaluru since the ban on 500 and 1,000 notes last month, and crores have been found in new 2000-rupee notes, which are in short supply for customers in banks and ATMs.
Yesterday, a senior Reserve Bank of India (RBI) official, a politician who owns casinos and a government engineer’s brother were arrested along with seven others for their alleged money laundering. In multiple raids, Rs. 5.7 crore and Rs. 93 lakh were found in new notes.
One of the arrested men is the relative of government engineer SC Jayachandra, who was suspended recently after raids at his home revealed massive unexplained cash and wealth. Investigators found Rs. 5.7 crore in 2000-rupee notes besides a Lamborghini, Volvo, MV Agusta, Ducati 749, multiple luxury apartments and a huge amount of gold from his home and that of another engineer, TN Chikkarayappa.
The two highest currency notes, which formed 86 per cent of the cash in circulation, were banned on November 8 by the government to bring untaxed money back into the system.
The Jio Happy New Year Offer is for both new and existing customers
Reliance Jio also announced a daily FUP limit to prevent congestion
Ambani said users do not need to buy a new SIM for the offer
At an event on Thursday, Reliance Industries Chairman Mukesh Ambani said that the free services under Reliance Jio Welcome Offer have been extended till March 31 as part of its Jio Happy New Year Offer, among other announcements related to the telecom venture.
“Starting December 4, 2016, every new Jio user will get the data, voice, and full bouquet of the Jio apps free till 31 March 2017,” Mukesh Ambani said about the Reliance Jio extended Welcome Offer. “This is the Jio Happy New Year Offer. All our existing 52 million users will continue to enjoy the Welcome Offer till 31 December, and then automatically be signed up for the New Year Offer. No need to buy a new SIM.”
During the Reliance Jio extended offer announcement, Mukesh Ambani also announced that users will now have a daily FUP limit of 1GB under the Reliance Jio Happy New Year Offer, which if exhausted will result in slower speeds. The reason behind the FUP change in the Reliance Jio Happy New Year Offer, Mukesh Ambani said, was that 80 percent of its current users consumed 1GB data per day, while 20 percent consumed disproportionately higher amounts – which ended up congesting the network. The Reliance Jio Welcome Offer had daily FUP limit of 4GB.After the launch of Reliance Jio in September, the company has seen a mixed reception, with long queues for SIM cards, and many complaints about slow speeds.
Mukesh Ambani elaborated on this, saying that the reason was the free Welcome Offer. “With 52 million customers, taking full advantage of the free Welcome Offer, it has caused slowdowns, but only on 8 percent of our towers,” he said. “And 92 percent of our customers and towers have been experiencing high data speeds.”
Since then, reports had suggested that the Welcome Offer – wherein all Jio services were being given completely free – might be extended to March 2017, as Jio claimed that customers faced “quality of service issues due to interconnection congestion”, and told Trai that until “we are in a position where we can delivery the quality of service as desired by the Jio management, it will be unfair to charge the customer.”
Mukesh Ambani also said that Reliance Jio has been taking a lot of feedback from users, and making changes according to this – including new Aadhaar-based services that will be powered by the same infrastructure as the eKYC activation.
At the announcement, Mukesh Ambani also confirmed that Jio has signed up 6 lakh customers every day for three months, thanks to eKYC, and said, “On average, a Jio customer is using 25 times the data that an average broadband user consumes.” In the three months since the launch, it has seen millions of Indians signing up, and Mukesh Ambani added that he hopes millions more will join soon. He added that there are 2 lakh eKYC outlets – “nearly equal to the total number of ATMs in India,” Mukesh Ambani pointed out – and that there will be 4 lakh outlets by March 2017.
“We are the fastest growing technology company, not only in India, but in the history of the world,” said Mukesh Ambani, adding, “in the three months, it’s grown faster than Facebook, or WhatsApp, and the fastest growing LTE network.”
At the same time, Mukesh Ambani also claimed that nearly 900 crore voice calls from Reliance Jio were blocked by other telcos, and added that Jio thanks the government and Trai for enforcing the license conditions. He added, “call block rates have come down from over 90 percent to nearly 20 percent yesterday, and we are working with all operators to bring this to within the limit of 0.2 percent.”
He also added that Jio now fully supports MNP so all customers can retain their number while migrating to Jio. He added that the company has now integrated home delivery of Jio SIMs. The SIM can be activated through eKYC once delivered, Mukesh Ambani said. “This will be available in all the top cities by 31 December, 2016.”
Hillary Clinton’s presidential campaign has been quietly exploring whether there was any “outside interference” in the election results and will participate in the election recount in Wisconsin initiated by Green Party presidential candidate Jill Stein, a Clinton campaign lawyer revealed Saturday.
In a Medium post, Clinton campaign lawyer Marc Elias said that the campaign had received “hundreds of messages, emails, and calls urging us to do something, anything, to investigate claims that the election results were hacked and altered in a way to disadvantage Secretary Clinton,” especially in Michigan, Wisconsin and Pennsylvania, where the “combined margin of victory for Donald Trump was merely 107,000 votes.”
Elias said the campaign had “not uncovered any actionable evidence of hacking or outside attempts to alter the voting technology.” But because of the margin of victory — and because of the degree of apparent foreign interference during the campaign — Elias said that Clinton officials had “quietly taken a number of steps in the last two weeks to rule in or out any possibility of outside interference in the vote tally in these critical battleground states.”
He said that the Clinton campaign would participate in the Stein-initiated recount in Wisconsin by having representatives on the ground monitoring the count and having lawyers represent them in court if needed. And if Stein made good on efforts to prompt similar processes in Pennsylvania and Michigan, Elias said, the Clinton campaign would do so there, as well.
“The campaign is grateful to all those who have expended time and effort to investigate various claims of abnormalities and irregularities,” Elias said. “While that effort has not, in our view, resulted in evidence of manipulation of results, now that a recount is underway, we believe we have an obligation to the more than 64 million Americans who cast ballots for Hillary Clinton to participate in ongoing proceedings to ensure that an accurate vote count will be reported.”
The recount effort is somewhat unusual in that it comes weeks after Clinton conceded — and at the request and with the financial backing of a third-party candidate, Stein, who has no chance of winning, said election law expert Richard L. Hasen, a law professor at the University of California at Irvine. Clinton, too, has virtually no chance of altering the result, given that she would have to reverse not just Wisconsin, but also Michigan and Pennsylvania, to become president, Hasen said.
Recounts can change outcomes. Sen. Al Franken (D-Minn.) famously defeated Norm Coleman for the seat he now holds after a months-long recount and legal battle, even though Coleman seemed initially to have a lead. But the margins are usually in the hundreds, not thousands, and typically, recounts are initiated by candidates in close races refusing to accept defeat, as is the case in the current North Carolina gubernatorial race between incumbent Pat McCrory (R) and Democrat Roy Cooper, Hasen said.
“I don’t think there’s any realistic chance whatsoever that even if recounts are done in Michigan, Pennsylvania, and Wisconsin, that’s going to change the outcome in the states, or in the presidential election generally,” Hasen said.
In a statement Saturday, Trump said the recount was “just a way for Jill Stein, who received less than one percent of the vote overall and wasn’t even on the ballot in many states, to fill her coffers with money.”
“The people have spoken and the election is over,” the statement said, “and as Hillary Clinton herself said on election night, in addition to her conceding by congratulating me, ‘We must accept this result and then look to the future.’”
Later Saturday, Trump tweeted that the Green Party’s initiative, which he called a “scam,” was “now being joined by the badly defeated & demoralized Dems.” In another tweet, he added: “The Democrats, when they incorrectly thought they were going to win, asked that the election night tabulation be accepted. Not so anymore!”
For her part, Stein took to Twitter to question Clinton’s motives for participating in the recount effort.
“Why would Hillary Clinton — who conceded the election to Donald Trump — want #Recount2016?” Stein wrote. “You cannot be on-again, off-again about democracy.”
Why would Hillary Clinton—who conceded the election to Donald Trump—want #Recount2016? You cannot be on-again, off-again about democracy.
Trump won 1,404,000 votes in Wisconsin, according to the state’s election commission, while Clinton had 1,381,823. The Wisconsin recounted will be conducted by county boards of canvassers, who must move quickly to meet a mid-December deadline to ensure the state’s electoral votes are counted. Stein has to file by Monday to prompt a recount in Pennyslvania, and by Wednesday to trigger a recount in Michigan. The results in that state are not technically certified until Monday. The presidential campaign was marked by fears that Russian hacking might affect the outcome, especially after Russian hackers penetrated the computer network of the Democratic National Committee and were found to have attempted intrusions on voter registration databases. The Washington Post also recently reported, citing researchers who tracked the phenomenon, thatRussians created and spread fake news about the election with the apparent goal of helping Donald Trump. During the campaign, Clinton criticized Trump for refusing to say that he would accept the election results if she won. Asked during an October debate whether he would do so, Trump responded that he would “keep you in suspense.” Clinton called that answer “horrifying” and said Trump was “talking down our democracy.” “Donald Trump refused to say that he’d respect the results of this election,” her campaign later posted on Twitter. “By doing that, he’s threatening our democracy.”
Donald Trump refused to say that he’d respect the results of this election. By doing that, he’s threatening our democracy.
In recent days, though, it is Clinton’s supporters who have raised questions about the outcome of the election. A viral post spread by some Clinton backers, including actress Debra Messing, suggested — falsely — that the Justice Department was “tallying calls” from people who wanted an audit of the 2016 election and urged people to make their displeasure known.
“Even if it’s busy, keep calling,” one version said. “We should not back down from this.”
New York Magazine then reported that Clinton was being urged “by a group of prominent computer scientists and election lawyers” to call for a recount in Wisconsin, Michigan and Pennsylvania, and the group had some evidence of possibly unusual activity. That fueled even more skepticism and calls for action by Clinton supporters.
The evidence of possible malfeasance, though, was limited. According to New York Magazine, the group found that Clinton “received 7 percent fewer votes in counties that relied on electronic-voting machines compared with counties that used optical scanners and paper ballots,” and that based on that “statistical analysis, Clinton may have been denied as many as 30,000 votes; she lost Wisconsin by 27,000.”
J. Alex Halderman, one of the academics reportedly involved, later wrote on Medium that the deviations were “probably not” the result of a cyberattack but that “the only way to know whether a cyberattack changed the result is to closely examine the available physical evidence — paper ballots and voting equipment in critical states like Wisconsin, Michigan, and Pennsylvania.”
Posting a link to a New York Times story about Clinton supporters calling for a recount, senior Trump adviser Kellyanne Conway said, “Look who ‘can’t accept the election results.’”
Look who “can’t accept the election results” Hillary Clinton Supporters Call for Vote Recount in Battleground States https://t.co/D4t6HbPUXG
Elias’s post might fuel similar criticism. Notably, though, Clinton did not initiate the recount herself; Stein did, after raising millions of dollars to fund the effort and claiming this had been a “hack-riddled election.” Elias said that the campaign had not planned to ask for a recount itself, because it had found no actionable evidence of hacking.
The Clinton campaign had investigated the matter extensively. Elias said the campaign had “lawyers and data scientists and analysts combing over the results to spot anomalies” and had also “monitored and staffed the post-election canvasses — where voting machine tapes are compared to poll-books, provisional ballots are resolved, and all of the math is double checked from election night.” He said the campaign had also met with outside experts and “attempted to systematically catalogue and investigate every theory that has been presented to us within our ability to do so.”
Now that a recount effort was underway, Elias said that it was “important” to participate in the proceedings. He played down the idea that the recount would change the outcome.
“We do so fully aware that the number of votes separating Donald Trump and Hillary Clinton in the closest of these states — Michigan — well exceeds the largest margin ever overcome in a recount,” Elias said. “But regardless of the potential to change the outcome in any of the states, we feel it is important, on principle, to ensure our campaign is legally represented in any court proceedings and represented on the ground in order to monitor the recount process itself.”
Brian Fallon, a spokesman for the Clinton campaign, rejected the notion that the campaign’s actions might suggest to some that it was not accepting the election results. He also disputed that the campaign had “backed a recount.”
“The post says we would not have sought the recount on our own, that we see no evidence of tampering so far, and acknowledge the margin in Michigan, which is the tightest of the three, exceeds the largest deficit ever overcome in a recount,” Fallon wrote to The Washington Post. “We note we are guarding our prerogatives now that someone else has launched a recount. Not sure what you could point to to suggest there is anything here that calls the results into question.”
Havana, Cuba (CNN)The streets of Havana were as somber Saturday as the streets of Little Havana in Miami were festive.
The death of Fidel Castro, the polarizing strongman who dominated Cuba for decades and agitated his neighbors in the United States, triggered both mourning and celebration.
In Cuba, a period of nine days of national mourning began.
All activities and public performances will stop, and the flag will be flown at half-staff in public and military establishments. Radio and television will broadcast patriotic and historical programming, state news outlet Granma reported.
A concert by famed tenor Placido Domingo was canceled and clubs that were usually alive with music were silent.
The mood was decidedly different just across the Straits of Florida in Miami. In the Little Havana neighborhood of Miami, home to Cuban exiles, revelers partied all day, waving Cuban or US flags while some sang to festive music.
Castro died Friday at 90. His brother, Raul Castro, announced his death in a televised statement. Fidel Castro’s body was cremated and his ashes will be publicly displayed in the capital’s Revolution Square the first few days next week. Then they will be taken by vehicle to Santiago de Cuba, the nation’s second most populous city, where they will be interred.
“I say to the people of Cuba, with profound pain I come here to inform our people, our friends of America and the world, that today, 25 November, 2016, at 10:29 pm, died the chief commander of the Cuban revolution, Fidel Castro Ruz,” Raul Castro said.
A sign that reads, “Long live Fidel,” stands on a Cuban government building early Saturday in Havana.
Havana quiet as news slowly spreads
The streets of Havana were quiet overnight into Saturday, with some Cubans unaware of Castro’s death until CNN asked them for their reaction.
Their mood seemed downcast, with some shedding tears and many others appearing preoccupied by what might come next.
One young Cuban woman told CNN, “The Cuban people are feeling sad because of the loss of our commander in chief Fidel Castro Ruz, and we wish him, wherever he is, that he is blessed, and us Cubans love him.”
At the University of Havana, where Castro attended law school 70 years ago, people placed flowers and photos by a statue on the main steps of the college.
Cuban government-run website Cubadebate tweeted photos from the site: “Because your people love you, they cry for you. Goodbye Comandante! #alwaystowardvictory #cuba #fidelcastro #untilforevercommandante
Facebook photos from Cubadebate showed scores of young people at a gathering at the statue. Many held posters and some cried.
In Bíran, a town near Cuba’s eastern tip where Castro was born, people were calling and knocking on the door of his half-brother, Martin Castro.
They wanted to know whether the hometown revolutionary was dead.
“They have been knocking and calling and asking if it is true,” said Angel Daniel Castro, a nephew of Fidel Castro’s. “Many people are crying. Some complain of high blood pressure. Fidel was a good man.
“For us, he was like a father. And Cuba sees him as a father. One woman just called crying and saying she had lost her father. Everyone feels it.”
Jubilation in Miami
But to the north in Florida, revelers spilled into the streets of Miami. They popped champagne, clanged pots, cheered and waved the Cuban flag in jubilation. They stood outside the popular Versailles restaurant in Little Havana with signs reading, “Satan, Fidel is now yours.”
“This is a celebration, but not a celebration of death, but a beginning of liberty that we’ve been waiting for many years. The hope is … that it opens up Cuba a little bit more,” a Cuban-American man said.
“It means a lot for us Cubans,” another reveler told CNN affiliate WSVN. “It’s a moment that we’ve been waiting for 55 years. We’re free at last. The man that caused so much suffering, so much people to be sad in my country … has passed away.”
Castro reigned in Havana for nearly five decades with an iron hand, defying a US economic embargo intended to dislodge him.
But he lived long enough to see a historic thaw between Cuba and the United States. The two nations reestablished diplomatic relations in July, and President Barack Obama visited the island this year.
Obama extended “a hand of friendship to the Cuban people” as he offered his condolences to Castro’s family in a statement.
“We know that this moment fills Cubans — in Cuba and in the United States — with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation,” he said.
“History will record and judge the enormous impact of this singular figure on the people and world around him.”
Historic figure of the 20th century
To some, Castro became a romantic figure and a legendary survivor despite what Cuban officials say were more than 600 attempts to kill him. During a rare public appearance in April, Castro marveled that he had lived to his ninth decade.
“Soon I will turn 90 years old, never would such a thing have occurred to me, and it’s not the outcome of any effort; it was fate’s whim,” Castro said, discussing his health, usually a taboo subject on the island. “Soon I will be like everyone else. To all of us comes our turn.”
Castro had many admirers, who saw him as a stalwart with his ubiquitous military fatigues and fiery oratory. He clung to a socialist economic model and one-party Communist rule, even after the Soviet Union disintegrated and most of the rest of the world concluded that state socialism was an idea whose time had come and gone.
The Cuban Communist Party mourned for “the commander of the Cuban Revolution” with the hashtag #UntilVictoryAlwaysFidel.
Chinese President Xi Jinping hailed Castro as a “great leader” for the Cuban people and said China had lost “an intimate and sincere friend,” according to a statement read out on Chinese state TV.
“He achieved immortal historical achievements for the development of world socialism. He was the great person of our era, and people and history will remember him,” Xi said. “Great Castro will live forever. “
Mexican President Enrique Peña Nieto called Castro a friend of Mexico, who had promoted bilateral relationships based on “respect, dialogue and solidarity.”
In an official Kremlin statement sending condolences to the Cuban people, Russian President Vladimir Putin remembered him as a “symbol of an era in recent world history” and “a sincere and reliable friend of Russia.”
Putin saluted Castro for building a “free and independent Cuba” and described him as “an influential member of the international community.”
Former Soviet President Mikhail Gorbachev said he and Castro had become “very good friends,” in comments reported by Russian state news agency Tass, and that the Cuban “was an outstanding personality, unique.”
North Korean leader Kim Jong Un expressed his condolences to the Castro family and the Cuban people in a statement released through state news agency KCNA.
Kim said that Castro was the “outstanding leader of the Cuban people and a prominent political activist who made distinguished contributions to accomplishing the cause of independence against imperialism,” the English-language version of KCNA reported.
Pakistani politician Imran Khan hailed Castro as “an iconic revolutionary leader” who stood against the United States.
Canadian Prime Minister Justin Trudeau described Castro as “a larger than life leader who served his people for almost half a century. A legendary revolutionary and orator, Mr. Castro made significant improvements to the education and health care of his island nation.”
‘End of an era for Cuba’
Other leaders noted Castro’s global impact but did not praise a man whose record on human rights was questionable.
French President François Hollande said Castro “embodied the Cuban revolution, with the hopes it aroused and then in the disillusion it provoked. Actor of the Cold War, he corresponded to an era which ended with the collapse of the Soviet Union.” Hollande also said he welcomed the recent thaw in US-Cuba relations.
UN Secretary-General Ban Ki-moon said he had had a “lively discussion” with Castro during a visit to Cuba in 2014. “Under former President Castro, Cuba made advances in the fields of education, literacy and health. I hope Cuba will continue to advance on a path of reform and greater prosperity,” Ban said.
Pope Francis sent a telegram to Raul Castro expressing his sorrow for Castro’s family and the Cuban people, and offering his prayers.
Many viewed Castro as an enemy of human rights, who suppressed and imprisoned dissidents.
“I am shedding tears tonight, but they’re tears of joy,” said Armando Salguero, a Miami Herald columnist. “Hell has a special place for Fidel Castro and there’s one less vacancy in hell tonight.”
He said many Cubans were cheering, because they had been forced to come to the United States when they couldn’t have the freedom to make a life in their homeland.
Repressive laws allow the government to jail and punish its critics, such as dissidents and journalists with long prison sentences, according to Human Rights Watch. The government also uses beatings and public acts of shaming, the organization reported.
US Rep. Ileana Ros-Lehtinen, who fled Cuba with her family when she was 8 and went on to become the first Cuban-American elected to Congress, cautioned that “the death of one dictator will not usher a new wave of change because the rulers of Cuba, whether it’s Fidel, Raul, whatever names you give them, they just rule over Cuba with an iron fist.”
Speaking to CNN, she lashed out at the Canadian Prime Minister’s statement describing Castro as a “legendary revolutionary.”
“I’ve been reading his sickening love letter to dead Fidel Castro and I’m thinking, ‘Sure, you did not lose a loved one to an execution squad. You did not lose a loved one to the gulags in Cuba,’ ” she said, while urging any foreign leaders praising Castro to look at the “real record” of his decades in charge.
“The only thing that Fidel has been successful in, has not been health nor education, or human rights or democracy, it’s been holding onto power — which is easy to do when you don’t have elections,” she said.
Modi government is planning to bring a ‘sarkari’ e-wallet on the lines of Paytm and provide subsidised smartphones to people in villages
Modi government is planning to bring a ‘sarkari’ e-wallet on the lines of Paytm and provide subsidised smartphones to people in villages to fast-forward India on the path of becoming a cashless economy, according to a report. Hindi daily Dainik Bhaskar today reported that the government may make some announcements in this regard in the upcoming General Budget. The government e-wallet could be different from the current Unified Payment Interface (UPI) or its updated version. Moreover, users will not be charged anything for transactions via the ‘sarkari’ e-wallet.
According to the exclusive report, the Union finance, telecom and information & technology ministries are jointly preparing the plan to introduce the ‘sarkari’ e-wallet. The NITI Aayog will handle the responsibility of monitoring the project.
Even as the Modi government is facing scathing attacks from the Opposition following the demonetisation of old Rs 500 and Rs 1000 currency notes, the proposed moves have the potential to leapfrog India to digital, cashless economy soon. On Thursday, Union Finance Minister Arun Jaitley had instructed CEO’s of all public and private sector banks to work on making India a ‘digital economy’ on a mission mode.
The report quoted officals as saying that subsidy amount for smartphones would be directly transferred to aadhar-linked accounts of beneficiaries. The smartphones will come with pre-installed e-wallet.
All You Need To Know About ‘Sarkari’ E-Wallet
The government will also take measures to make it viable for people to make payments via e-wallets at petrol pumps, educational institutions, ration stores, milk parlours, railway stations, bus stops etc.
On November 8, Prime Minister Narendra Modi had announced the decision to demonetise old Rs 500 and Rs 1000 currency notes. The surprise decision has affected crores of citizens in the country. The government has assured that cash availability in banks and ATMs would become normal soon.
IN A rush to board a train in time, Shivani Bhargava, a 19-year-old Delhi University student from Mumbai, ends up in a tight spot after she forgets her wallet at home. After getting down at the station in Delhi, she has to book a cab and reach her hostel at the earliest, but doesn’t have the cash or cards to do so. Enter Meru Cabs’ ‘cab wallet’. All she does is tap her mobile app and, voila, the payment is made. “Not only did I reach my hostel safely, but I also got a 30% discount,” says Bhargava.
Meanwhile, a couple of hundred kilometres away, 33-year-old Pappu, a plumber from Jaipur, has stopped queuing up at the post office to send money back home in Bihar. These days, he transfers it straight to his wife’s account through his smartphone. Back home, his wife Beena, too, doesn’t have to travel for miles any more to withdraw the money; a trip to the neighbourhood kirana (grocery) store suffices.
Several companies, especially those in the e-commerce and telecommunication services sector, have come out with digital wallets to help consumers. All you need to do is preload money and you can use it to pay for services or transfer it to other accounts. If a recent Reserve Bank of India (RBI) directive is anything to go by, these digital wallets can soon apply to become ‘payment banks’, financial institutions aimed at “furthering financial inclusion”.
As per the directive, telecom operators, supermarket chains, electronic wallets and prepaid instrument players can open these payment banks to accept deposits, offer basic saving facilities and provide remittance services for millions of people who are currently out of the digital financial system.
E-wallets have been around for quite some time and their popularity has been rising at an exponential rate. So, it was just a matter of time that the RBI issued guidelines for licensing of companies that can venture into the space. Several major players are now applying for licences to set up payment banks.
What are payment banks?
As per World Bank estimates, only 35% of the Indian population has accounts with financial institutions. To service the remaining population, the RBI came out with two new banking categories called small finance banks and payment banks.
Payment banks are meant for simple banking transactions. These institutions are neither allowed to lend or accept term deposits nor can customers keep more than R1 lakh in such accounts. Such payment banks can issue debit cards and offer services like remittances and utility bill payments. They can also distribute simple financial products like mutual funds and insurance. Individuals can use the payment bank account to make daily or monthly cash transactions either through debit cards or through mobiles. This can also help guard against debit card fraud since one can keep a smaller balance in accounts.
But before payment banks become a reality, let us try to understand e-wallets. In general, as per the RBI, there are three kinds of e-wallets—closed, semi-closed and open. A closed wallet is one that a company issues to its consumers for in-house goods and services only. These instruments do not carry the advantage of cash withdrawal or redemption. Several portals such as Flipkart, Jabong and MakeMyTrip offer such closed wallets. It is basically an account where money gets credited in case of a refund due to cancellation or return.
“The money sits as a liability on the books of the company and there is no interest earned on it. When a customer makes a purchase, the money moves to revenue in the books,” says Supam Maheshwari, chief executive officer, FirstCry, an online babycare product portal. FirstCry has a closed wallet where the refunded money is parked in case of a cancellation.
In the payments space, firms such as MobiKwik, PayU and Paytm offer semi-closed wallets. As per the RBI, a semi-closed wallet can be used for goods and services, including financial services, at select merchant locations or establishments that have a contract with the issuing company to accept these payment instruments. Semi-closed wallets do not permit cash withdrawal or redemption by the holder as well. For example, customers can use Airtel Money, a digital wallet initiative by the telecom major, for an extensive range of services across merchants to pay for remote transactions like instant money transfers from an Airtel Money wallet to any bank account or another Airtel Money wallet across the country, booking railway and movie tickets and paying for utility bills, among others.
Finally, open wallets can be used for purchase of goods and services, including financial services such as funds transfer at merchant locations or point of sale terminals that accept cards, and also cash withdrawals at automated teller machines or business correspondents. These kind of wallets can only be issued by banks.
An example of an open wallet is M-Pesa by Vodafone in partnership with ICICI Bank. Vodafone also offers M-Pesa as a semi-closed wallet.
How far will they reach?
To understand the e-wallet revolution, let us take you to Kenya, a country in eastern Africa, where M-Pesa was developed. Considered the most mature mobile payment system in the world at present, M-Pesa has spread quickly and has become the most successful mobile phone-based financial service in the developing world since its launch in March 2007.
In Kenya, over 25% of its $78-billion gross national product flows through M-Pesa transactions. Around one-third of Kenya’s population uses the service to transfer small amounts of money to other people and merchants via their mobiles. In India, Vodafone has been piloting M-Pesa along with ICICI Bank. M-Pesa provides branchless banking services and allows Vodafone subscribers to deposit and withdraw cash from their accounts by exchanging real cash for electronic cash at the Vodafone network of retail stores (at brick-and-mortar money transfer agencies).
In India, debit and ATM cards are primarily used to withdraw money. RBI data for the year 2013 indicated that the use of debit cards at merchant outlets was less than 5% in terms of value transacted. Even to pay utility bills, the majority still withdraws cash rather than paying through net banking. People still want to hold and pay cash.
In contrast, in Kenya, mobile-based digital payment has become the de facto mode of payment. The user exchanges his/her cash for electronic value at retail stores run by an agent, just like they do for recharging their phone’s airtime. M-Pesa has over 60,000 agents in its network, where its users can deposit and withdraw cash easily. In India, on the other hand, mobile money providers can’t offer cash-out transactions. Even with the new ‘payment bank’ directive of the RBI, it’s not clear if a user can withdraw cash anywhere or if it is limited to only the platforms that gave them their cards.
Another thing that is not clear is how payment banks will be integrated or work alongside Jan Dhan Yojana, a financial inclusion scheme that the central government launched in mid-2014.
Some companies earn a small interest on the money lying in closed wallets. “There are two ways in which customers can get a refund: they can either get the money back or it can be put in the portal’s credit,” explains Praveen Sinha, founder-MD of Jabong. If money comes into the wallet due to a refund, it earns a minuscule interest, but the interest will be triggered only after a minimum amount is reached.
With closed wallets, companies don’t need RBI approval to launch such accounts. In case of semi-closed wallets, the money is managed by payment companies. “These wallets are handled by non-banking entities. As per regulations, we need to keep the money in an escrow account,” says Upasana Taku, co-founder, MobiKwik Systems, a mobile wallet service provider.
Does this money earn interest? Yes, but how much depends on the agreement between the bank and the payment company. “We have to maintain the escrow account with a bank. The RBI has made an exemption for us on earning interest on the funds lying in the account. A formula is used to arrive at the average balance on which one can earn interest, say, on the average balance of 52 weeks. This interest is in the range of 4-6%. None of the wallets pay interest to customers,” says Jitendra Gupta, founder-MD of Citrus Payment Solutions, which offers payment gateway services.
Some payment service providers, however, say the interest earned on money in semi-closed wallets can be higher. “It can earn more than 6% on the average balance and in the range of fixed deposit rates,” says Taku of MobiKwik. Merchants don’t get any benefit from the money lying in wallets. “We don’t get any monetary benefit from the payment companies when a consumer uses her wallet at our outlet,” says a Delhi-based vendor who facilitates the use of Airtel Money.
However, companies such as Paytm give offers such as R50 cashback on transactions to consumers,” says Vinamra Pandiya, chief operating officer, TastyKhana, an online food ordering portal. In case of open wallets, the banks manage the money. “The bank is the legal entity, while the infrastructure is taken care of by the payment service provider,” says Sunil Kulkarni, deputy managing director, Oxigen Services, which is planning to launch an open wallet soon.
Shashwat Sharma, partner, KPMG India, says: “With the release of final guidelines for licensing of small finance banks and payments banks, the RBI has reinforced its commitment to financial inclusion. This is a step in the right direction to bring India’s unbanked and underserved segments into the formal finance structure, with banking penetration expected to expand substantially beyond the traditional segments.”
Do you actually need it?
If you use Internet banking or online payment through a credit or debit card, you need not switch to mobile money transfer services like Airtel Money or Vodafone M-Pesa. As mobile money transfers are costlier than, let’s say, National Electronic Funds Transfer (NEFT) or Immediate Payment Service (IMPS). This facility will be useful for those who don’t have a bank account, net banking or credit card and those who don’t use online card payments.
These payment formats are gaining popularity, as they work on Unstructured Supplementary Service Data (USSD) technology. In this technology, you can communicate with the service provider’s computer similar to online chatting. You need to choose the options step by step and this can be without the Internet service being activated.
However, if you have data services then you can simply download the apps and transact easily.
In 2013, RBI governor Raghuram Rajan had said, “The key to cheap and universal payments and remittances will be if we can find a safe way to allow funds to be freely transferred between bank accounts and mobile wallets, as well as cashed out of mobile wallets through a much larger and ubiquitous network of business correspondents.”
The transactions volume via mobile wallets has had more than a three-fold growth in the past two years, which has clocked over R2,700 crore so far, as per Crisil.
Taku of MobiKwik, which is in the process of putting together an application for getting a payment bank licence with over 12 million customers already, says: “Our payment bank strategy will be focused on leveraging our core strengths: disruptive technology, business model innovation, and a stable, secure mobile-based platform with the capability of scaling up rapidly at a fraction of the cost offered by older technologies.”
A company, which recognises that and carves out its operations accordingly, will manage to give this new-age payment system a boost. The current set of payment bank licences are part of a pilot initiative and will lead to significant learning, both for financial regulators and industry players. These learnings will only become clearer over time.
TYPES OF E-WALLETS
In general, as per the RBI, there are three kinds of e-wallets—closed, semi-closed and open
* Closed wallet: A closed wallet is one that a company issues to its consumers for in-house goods and services only. These instruments do not carry the advantage of cash withdrawal or redemption. Several online shopping portals such as Flipkart, Jabong and MakeMyTrip offer such closed wallets. It is basically an account where money gets credited in case of a refund due to cancellation or return.
* Semi-closed wallet: In the payments space, companies such as MobiKwik, PayU and Paytm offer semi-closed wallets. As per the RBI, a semi-closed wallet can be used for goods and services, including financial services, at select merchant locations or establishments that have a contract with the issuing company to accept these payment instruments. Semi-closed wallets do not permit cash withdrawal or redemption by the holder as well.
* Open wallet: Such wallets can be used for purchase of goods and services, including financial services such as funds transfer at merchant locations or point-of-sale terminals that accept cards, and also cash withdrawals at automated teller machines
or business correspondents. These kind of wallets can only be issued by banks.
WHO CAN USE THIS MONEY
* If you use net banking or make online payments through credit or debit cards, you need not switch to mobile money transfer services like Airtel Money or Vodafone M-Pesa since mobile money transfers are costlier than, let’s say, National Electronic Funds Transfer (NEFT) or Immediate Payment Service (IMPS).
* This facility may be useful only for those who either don’t have a bank account, don’t use net banking, don’t possess a credit card or don’t prefer making online card payments.
* There are several charges involved in mobile money and these charges are generally higher than in banking transactions. For example, the registration fee for Airtel Money is R50. The cash-loading charges are nil (up to R3,000), R40 (R3,001 to R4,000) and R50 (above R4,000).
* Similarly, the charges for money transfer between Airtel Money and a bank account are nil (R10-50), R15 (R51-R1,000), R35 (R1,001–R3,000) and R50 (R3,001–R5,000).
* These services are not designed to handle big amounts. Airtel Money’s ‘super’ and ‘express’ accounts, for instance, have the limit of a transaction of R10,000 per day.
* However, while shopping online, you stand to get several offers through these platforms. For instance, you can get 37% off on shopping for R1,500 from Myntra using Airtel Money. A mobile recharge on Airtel through Airtel Money can give you more talktime.
The Narendra Modi government is really cute. It first announces a new game of football, makes it own rules, changes them several times in the middle of the game, asks every player to shoot the ball in the same goal and then announces it won 9-1. Congratulations!
The government can, of course, celebrate the results of the feedback on the demonetisation app. The results, the government claims, 90 percent people are in favour of the ban on use of Rs 500 and 1000 currency notes.
In the history of democracy, nobody other than the North Korean government would have enjoyed better ratings.
But, if I were the government, what would really worry me is this: If the ground and rules were mine and everyone was playing for the same team, running towards the same goal, who scored that one goal against Team demonetisation? When, like the North Korean elections, it had no room for dissent, who voted against it?
The prime minister’s app and its questions were actually similar to a famous advertisement of a pressure cooker. Jo biwi se suchmuch kare pyaar, woh Prestige se kaise kare inkaar! His entire questionnaire was based on a similar argument: Jo desh se sachmuch kare pyaar, woh demonetisation se kaise kare inkaar!
Do you think black money exists in India? Of course it does, not just in India but all across the globe.
Do you think the evil of corruption and black money needs to be fought and eliminated? Of course every evil needs to be fought and eliminated.
The entire quiz, as a friend quipped, was like asking who is the best Prime Minister of India? a) Narendra Modi b) Himesh Reshammiya c) Narendra Modi or d) Anupam Kher.
Considering that the government wanted to hear only what’s music to its ears, it is really a surprise that the government bothered to ask ten questions. It could have just asked us all to chant ‘Bharat Mata ki Jai’ and interpreted the response as our voice vote for demonetisation.
There are surveys and, well, there are surveys. We know what the prime minister said at a Delhi rally when opinion polls predicted a BJP defeat in the Delhi elections. But, since this one suits the government, let it enjoy the voices in its echo chamber.
Outside, of course, the demonetisation experiment is being panned as a policy quirk that could ruin the Indian economy and the lives of millions of people. Experts across the globe are predicting that it will derail the GDP, lead to enormous hardships and loss of livelihood for millions in the Indian unorganised sector. It has been pointed out that the plan will not address any of its stated objectives — wiping out black money, ending corruption, terror funding or use of counterfeit currency.
The experiment has Robert Mugabe written all over it.
And, for argument’s sake, even if the premise behind the demonetisation drive were logical and rational, the implementation has been a disaster. It has brought the entire country on the road, made everybody fall in line and lead to loss of lives, trade and jobs.
Every bank is out of currency. ATMs have become dry. Withdrawals through cheques are limited to Rs 2000. Traders and farmers are destroying perishable commodities because there are no buyers. From midnight (25 November), petrol pumps and medicine shops too will stop accepting cash. There are fears that wheels of the Indian economy will come to a grinding halt once transporters run out of cash to refuel.
Almost every Indian in a country of 125 crore is suffering. But, if the government thinks it has pulled off a miracle just because a few lakh Indians found enough time to get out of queues outside banks and ATMs and play fastest finger first, good luck to Modiji and India.
Even Indira Gandhi was convinced Emergency was good for the grateful country would give her bumper votes for making their lives miserable.
Since this is the season of asking questions, here are two from me: Did Dharmendra Kumar of Tindwari village in Banda district respond to the prime minister’s questionnaire? Last heard, he was at his three-year-old daughter’s funeral who died after he failed to get money for her treatment in spite of queuing up for a few days.
NEW DELHI — The sudden withdrawal of 86 percent of India’s currency has left cash in short supply, retail sales stumbling and wholesale markets in turmoil.
That’s just the immediate fallout from Prime Minister Narendra Modi’s surprise effort to stamp out corruption by making cash hoards in large denomination bills worthless. But what lies ahead could be even worse, some analysts say.
“Basically, you’ve created chaos,” said Steve H. Hanke, an applied economist at Johns Hopkins University in Baltimore and a global authority on currency policy. “India is a cash economy. It’s not like Europe or the U.S. where everyone is running around with a credit card. That’s not the world of India.”
“It doesn’t look like this thing was thought through at all,” he said.
Every day or so, soothing assurances about India’s overnight currency reform spill from the offices of top government officials.
“Enough cash is available,” Economic Affairs Secretary Shaktikanta Das said Thursday during a nationally televised press conference, as millions of people waited in hours-long lines. A few days earlier, the finance minister urged patience with what he called “a period of inconvenience.”
But the decision to ban India’s highest denomination bills, 500 rupee and 1,000 rupee notes worth about $7.50 and $15, goes far beyond an inconvenience.
India’s economy has become one of the world’s largest in recent years, but millions of businesses, and hundreds of millions of people, lack bank accounts and use cash to pay for everything from groceries to hospital stays to land purchases.
The shadow economy — countless transactions hidden from the authorities — is believed to amount to about a quarter of the country’s gross domestic product.
The government used a similar demonetization in the late 1970s. But it failed to curb corruption, and the underground economy has grown immensely larger since then.
Plenty of Indians do use cash transactions to hide their wealth and avoid taxes — less than 3 percent of the population pays income taxes — and the authorities occasionally arrest businesspeople or corrupt officials with currency hoards that can fill trucks. But plenty more people use cash because of habit, poverty or a lack of easy access to banks.
So instead of just aiming squarely at wealthy tax dodgers, the demonetization is also hammering the poor, the working-class and small business people whose lives have been turned upside down during the transition to new currency notes.
Across India, people are waiting in lines that often form hours before banks open and last well into the afternoon, though the government has limited most withdrawals and currency exchanges to a maximum of $30 a day.
“It is unclear whether this exercise will achieve any lasting results other than having created a national economic crisis, destroying confidence in the national currency and unleashing tremendous suffering for ordinary Indian citizens,” Rajiv Biswas, Asia-Pacific chief economist at HIS Global Insight, said in an email.
“This will have a direct negative effect on retail sales and industrial output during the coming weeks,” Biswas said.
A research report this week from the banking giant HSBC predicted that imports of consumer goods would fall, but added that could be offset by a spike in demand for gold, as unsettled Indians look for ways to store their wealth.
In worst-case scenarios, the effects of demonetization could last for years, driving the country into recession and pushing Indians to keep their wealth in more stable currencies, such as the euro or U.S. dollar.
“When you don’t trust a currency and you don’t trust a government you start using foreign currencies,” said Hanke. “That’s what this is going to do, I think: People will not trust the rupee.”
Raghuram Rajan, the former head of India’s central bank and one of the country’s most respected economists, warned in 2014 that demonetization programs can easily stumble.
“It’s not that easy to flush out black money,” he said after a speech, while he was still the country’s top banker. He added, “my sense is that the clever find ways” to get around currency overhauls.
Rajan has instead suggested better monitoring of financial transactions, such as using government ID cards to track major purchases, and improved tax enforcement.
Hanke was surprised that India would even try a demonetization program, given that its failure in the 1970s is well-known in currency policy circles.
“They’re usually done in some kind of crisis situation and panic,” said Hanke, “and they ultimately have all kinds of negative unintended consequences.”
An interesting side effect here of India’s demonetization plan. As we know, the Rs 500 and Rs 1,000 notes have been cancelled as legal tender, to be replaced by other notes and designs. There are limits on how much cash can be changed for cash (Rs 4,000, soon to fall to 2,000) but no limits upon what can be deposited in bank accounts. Of course, large deposits are going to be subject to tax scrutiny, rather the point of the exercise in fact. But what is interesting is that the flood of cash being deposited is such that it’s actually bringing interest rates down. This is an interesting and welcome macroeconomic effect:
State Bank of India (SBI) reduced rates on deposits from one year to 455 days to 6.90%, down 15 basis points, while keeping the 7% rate for deposits between 211 days to one year unchanged. That may not be great news for those putting their money in banks but lending rates are likely to follow suit in a few weeks, possibly giving sluggish credit expansion a much-needed boost and shoring up growth. A basis point is 0.01
“All rates will fall,” said SBI Chairman Arundhati Bhattacharya. “The bank has seen huge inflow of deposits but demand for credit has slowed down. Therefore, lending rates too will fall but after a gap.”
Agreed, that’s not a large drop but it all helps. Lower interest rates should, all else being equal, produce a stimulus to the economy.
There’s also another interesting effect here, the money supply will be smaller as well. That of course is contraction, just as that interest rate change is expansionary. But India does have inflation and as Milton Friedman told us, inflation is always and everywhere a monetary phenomenon:
Of the Rs 14 lakh crore worth of Rs 500 and Rs 1,000 notes that have been scrapped, roughly Rs 3 lakh crore are not likely to be exchanged for new notes ever. This entire extinguished or disappeared black money will be profit to the RBI, and will be transferred to the central government as dividend.
That does of course depend upon that estimation being correct. One lakh crore is, to those of us using the western notation system, one trillion, thus the current estimation is that 3 trillion rupees will be withdrawn from circulation. The total cash in circulation in the Indian economy is some 18 trillion Rs, meaning that the demonetization will reduce that money supply, the base money supply, by 16 or 17 % or so. Dependent upon that estimate being correct of course.
We don’t have a big enough evidence base–not enough places have done this often enough–for us to know how much this will reduce inflation by but we are sure of the sign of this action itself. Reducing the base money supply will lower inflation. Of course, it’s possible that the shock to the economy will lead to a reduction in production and the total effect will depend upon the interaction. If the destabilization reduces production by more than that fall in the money supply then we’ll have more, not less, inflation. But it would be extraordinary to believe that production is going to fall that much.
And, of course, there’s the taxation effect:
Any deposit that is significantly in excess of Rs 2.5 lakh and reflects an “abnormal” rise in income is likely to be scrutinized and subjected to a 200% penalty+ as it may not be seen as eligible for the current year’s tax assessment, tax authorities have said.
A sharp increase in income that does not seem consistent with past patterns will need an explanation though smaller increases in deposits might be acceptable as part of the ongoing 2016-17 tax assessment. Penalties can be challenged but scrutiny of large cash deposits will be on the cards over the next few weeks.
Which gives us our third macroeconomic effect. At least some of that money will indeed be taxed and it would not have been taxed without the demonetization program. This means that the budget deficit will be smaller that it otherwise would have been. This will have knock on effects upon interest rates and inflation once again.
All in all then a rather interesting set of effects. A lower budget deficit, lower interest rates and also lower inflation. Not bad for the one simple plan, is it?
Joe Walsh, who was a United States congressman from 2011 until 2013, declared on Wednesday afternoon that he will take up arms if Donald Trump is not elected to the presidency.
Walsh, a man who at one point had the power to help write the laws of the United States, has a history of making violent threats against his political enemies. Last July, for example, Walsh tweeted — and then promptly deleted — a declaration of war against “black lives matter punks.”
On November 8th, I’m voting for Trump.
On November 9th, if Trump loses, I’m grabbing my musket.
For the record, Walsh’s apparent plan to form a band of individuals to take up arms against the lawfully elected leader of the United States most likely meets the legal definition of treason. Under federal law, “whoever, owing allegiance to the United States, levies war against them or adheres to their enemies, giving them aid and comfort within the United States or elsewhere, is guilty of treason.”
Though treason prosecutions are unusual, previous federal cases have allowed such prosecutions to move forward when armed individuals join together against the United States.