851 Result oriented suggestion for temporary solution to ameliorate DEMONETIZATION ATM QUEUES: Bank Branches should be permitted to issue PAY ORDERS PAYABLE TO BEARER VALID FOR 30 DAYS

We know that people are dying in ATM queues. Millions of innocent citizens are getting fatigued and sweating, in ATM queues, and Bank-Entrance queues in futile attempts to get just a pink piece of Rs. 2,000 currency note. Pregnant women are delivering babies in Bank queues. Foreign tourists who have been stuck up are starving, Agricultural laborers are starving because farmers do not have cash Rs. 100 denomination money to pay. We have seen the case of a Citizen in Vinukonda, tearing off a Rs. 2,000/- note because no hotel was giving a meal token and nobody was willing to give him change. In every Indian's mind, lingers / might have lingered a thought at least once: Why should the Government trouble me by barring me to draw my own hard-earned money from my Bank account? Does the Government of India have a right to infringe my fundamental right?

ybrao-a-donkey's suggestion:

I have seen dozens of T.V. Channel discussions in which politicians, trade union leaders, financial experts, bureaucrats, participated. Most of them ended up in heated arguments, political one-up-man-ships, word juggleries, passing on the bucks, doing propaganda for their party lines, etc. etc. I am unable to recollect any of them giving any constructive suggestions.

DECISION COULD HAVE BEEN TAKEN BACK, SAVING AT LEAST A TRILLION RUPEES

In the early days of demonetization, I have suggested TAKING BACK, OF THE DEMONETIZATION ORDER. At that time, it was sensible because, bulk of the old Rs. 500, Rs. 1,000 notes were still with the public. Unfortunately, the apathetic egoistic Govt. took it as a matter of prestige issue and remained adament. Had the Govt. taken back its decision, it would have saved several billions of Rupees of costs of printing new notes, logistic costs (packing and transport costs), counting costs, distribution costs, communication costs. A trillion Rupees could have been saved.

CURRENCY NOTES COULD HAVE BEEN GOT PRINTED ABROAD, AND IMPORTED

After most people surrendered their old notes to the Banks, it emerged that the whole process is a wild goose chase. A certainty has unveiled itself that for several months, currency supplies are going to be slugglish, as we do not have the PRINTING CAPACITY to print huge volumes of currency notes. At this stage, I suggested that we should place orders with reputed international currency printing presses situated abroad, and get notes printed with the help of Central Banks of the respective countries. Unfortunately, Government of India took a different route, and started giving publicity for Cashless Economy, Mobile-Apps, Wallets, POS swiping etc. etc. I am not against these solutions. ONLY problem is, we cannot dig a well, when the house caught fire, and has become a towering inferno, suffocating people. Efforts for Cashless economy can continue. But that is a medium term solution.

Link for those readers who wish to have a look at my suggestion AS A TEMPORARY SOLUTION to get currency notes printed abroad, and import: Click here to go to post No. 844 about importing currency notes.

TEMPORARY SOLUTION. SUGGESTION BEING GIVEN NOW: PUBLIC SECTOR BANK BRANCHES CAN BE PERMITTED TO ISSUE DEMAND PAY ORDERS, PAYABLE TO BEARER

1. Only Public Sector Bank Branches should be permitted.

2. Demand Pay Orders payable to bearer,are nearly equal to currency notes. Issuing these may violate RBI Act. RBI Currency notes are Demand Promissory Notes payable to bearer. Demand Pay Orders are not promissory notes. They will be akin to Bank drafts and Bank Cheques. Anyway, to guard against legal complications, Government of India can get an ordinance signed by President of India, pending a legislation by Parliament within 2 months. Added at 10.45 p.m.: The idea seeking an ordinance is NOT TO AVOID PARLIAMENT. The problem, is the urgency, considering the sufferings of the people.

3. The step can be only a temporary measure, for use till RBI replenishes full stocks of new currency notes which may take around six months, at the current printing capacities and logistic speeds.

4. The Pay Orders can have a maximum validity period of one month. Otherwise, they will go into unlimited periods of circulation like currency notes.

5. Bank Branches can issue these pay orders by debit to their customers' accounts. Even ATM machines, draft printing machines can be calibrated to print Bank Pay Orders.

6. To guard against fake Bank Pay Orders, Bank Branches, if they want, can add their bar codes, special stickers etc.

7. The Pay Orders should be valid for circulation within the DISTRICT only. This reduces possibility of fake pay orders circulating all over India.

8. As the Pay Orders are issued by debit to customer accounts, repaid by credit to PRESENTORS' ACCOUNTS, there will not be any problem associated with currency notes.

9. Only Rs. 100 and Rs. 500 denomination Pay Orders are to be issued.

10. No commission is to be charged for issuing or for repayment. Added at 10.46 p.m.: Alternatively, Banks may be permitted to charge Rs. 1 per instrument. That means, if a Bank issues 10 payable-to-bearer pay orders, whether Rs.100 or Rs. 500 denomination, it will get a commission of Rs. 10/-.

11. Milk Booths, Veg. vendors, grocery stores, private hospitals, hotels anybody can accept these pay orders, treating them as cash. The Pay Orders can be freely circulated for exchange of goods and services everywhere in the bazar, because they are supported by local banks in the District. On the 29th day, when the last man presents the Pay Order in clearing to the Issuing Bank, the amount will get credited to his account. Added at 10.45 p.m.: Unless huge number of pay orders are presented into a single account, say > Rs. 250,000/- source of the Pay Orders need not be inquired.

Added at 10.43 pm, 14.12.2016 IST

yb-donkey, sent a copy of this blog-post, as suggestion to the Supreme Court of India for their due consideration.