Effect of demonetisation on companies

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Manmohan Gupta, Nov 13, 2016.

  1. RAMA MURTHY SASTRY CHALLA

    RAMA MURTHY SASTRY CHALLA Well-Known Member

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    sir , 74 lac crore is all notes Rs .5 , 10, 20, 50 , 100, 500 (old note), 1000(old note) together total value which are circulated in India
    in that Old 500 and 1000 rs notes total value is around 14.5 lac crores
    so government daily printing new notes worth 25-30 thousand crores
    so government may supplement these notes around 58 days
    in these rs. 2000 note printing is bad idea ,
    in my view if they lift withdrawal limit after December 31 st 2016
    economy may get stabilize soon with in 1 or 2 months after December 31 st
    CRR problem is temporary because , all people in india deposited amount in bank after November 8 th 2016 is due to only demonetization affect , and immediate limit in withdrawal affect also ,
    after lifting withdrawal ban , people with draw their money rapidly and that money again circulated in to indian market
    so after that CRR pressure will be reduced and remaining amount will be issued loans by banks also
    reduce impact

    in my view Indian Economy may get back its strength after dividend declared by RBI (Black Money filtered amount) to central government and that amount again circulated by government as schemes it will take may be 1 year above
    so my view is financial year 2018 on wards GDP improves rapidly

    In my Banks main problem is " NPA " not CRR
    there is a strong Law needed for NPA problem for banking industry is essential
     
  2. elegantly_wasted

    elegantly_wasted Member

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    What is the source of the information of 76 lac crores?

    You mention that goverment is printing 30000cr? looks like this is per day and hence 58 days. But according to Dr Naushad Forbes (in an interview with India Today TV yesterday) our capacity is only 10000cr per day and this means thay if the currency that was demonistised is to be remonitised then it would be achieved only by March 2017 (unless some alternate sources are also used)

    I am still am not clear about what exactly is the CRR problem or why is CRR move seen as a negative?

    Banks lending - is there any credit offtake? Nothing seems to be suggesting that banks are or will be able to put out new loans. Infact I read some place that the lucrative consumer lending business at banks has come to a virtual standstill

    Divdend declared by RBI - what is this and how will this happen?

    Sorry but I am just a novice with limited knowledge but with a deep appetite to learn. Hence the many questions to you sir.

    Thank you for your patience in taking time out of your busy schedule to answer these questions
     
    Raaz likes this.
  3. RAMA MURTHY SASTRY CHALLA

    RAMA MURTHY SASTRY CHALLA Well-Known Member

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    sir , those numbers taken from Finance minister speech and
    in Rs. 14.5 lac crore . total (old 500& 1000 ) value present bank deposited amount is Rs. 8.11lac crores ,
    after December 31 st 2016 if there is a non deposit amount , that amount again printed by RBI same value in other denominations and that amount declared dividend to central government
    so government gain that amount and it may use in 2017-2018 financial year
     
  4. elegantly_wasted

    elegantly_wasted Member

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    Are you certain the Finance Minister said this? The demonitised 500 and 1000/- notes as per all news articles represented 86% of the currency in circulation. so if 500 and 1000/- in circulation was about 15lac crores and this is 86% then all currency in circulation (100%) would be 17.5lac crores and certainly not 76lac crores.

    Coincidentally the RBI Annual Report for March 16 puts the Notes issued at 17.08lac crores.

    On the dividend point, why would the RBI need to print the amount not deposited till December 2016? Anyways even if they were to print this undeposited (in old denominations) amount in new notes, how does it allow RBI to declare dividend? I am just not clear about this. Is this your personal view or is it from some news article that you have read

    Also please do clarify the CRR point as well.

    Inputs from experts like you help improve the understanding of all of us in here

    Thanks once again
     
  5. Shibi

    Shibi New Member

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    I'm not a financial expert but I cannot understand the logic of the statement. Central Govt. can print any amount of currency and hence need not limit themselves to the surplus amount. But it they print excess, the money value will come down leading to inflation. The declared aim of the demonetization was to take black money out of circulation and to strengthen the value of the Rupee. So printing currency in place of black money will not help meet this goal.
     
  6. RAMA MURTHY SASTRY CHALLA

    RAMA MURTHY SASTRY CHALLA Well-Known Member

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    sir ,
    how can it possible ....500 & 1000 represented 86 % is it real ? ....
    just think sir ..... it is false Rs.10 , 20 , 50 ,100 remaining 14 %?
     
  7. Raaz

    Raaz Active Member

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  8. elegantly_wasted

    elegantly_wasted Member

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    Why think when the information is available easily....... see this link.

    https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0RBIAR2016CD93589EC2C4467793892C79FD05555D.PDF

    Its for the RBI Annual Report for 2016. Look up page 132 which gives the Balancesheet of RBI and Notes Issued therein on the liability side.

    Further Table VIII.1 on page 89 gives denomination wise breakdown of notes in circulation. Check what percentage do 500/- and 1000/- make up. This should clear any misconceptions carried.

    Hopefully the RBI annual report is not false.

    With this matter now settled, could you continue on the other questions I raised on dividend, CRR etc please
     
    Last edited: Dec 1, 2016
  9. elegantly_wasted

    elegantly_wasted Member

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  10. elegantly_wasted

    elegantly_wasted Member

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  11. elegantly_wasted

    elegantly_wasted Member

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    @RAMA MURTHY SASTRY CHALLA @Niveza India Pvt Ltd.

    So finally RBI Guv has finally clarified that the question of special dividend does not arise, the matter stands settled for now atleast.

    http://www.moneycontrol.com/news/ec...es-not-arise-rbi-guv-urjit-patel_8079421.html

    100% CRR withdrawn too..seen as a "relief" to banks - simply because the monies kept as CRR with RBI does not earn any interest and the drag/loss is incurred because banks would have to pay interest on deposits but not earn interest on monies deployed(CRR). It was as simple as this as I learnt earlier today
     
  12. ankit12

    ankit12 New Member

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    This is done for black money. People are facing problems but it will give good return to them. According to the stock broker or stock market there is no effect, market current move on. But main thing is this work really good for everyone and will give good result to everyone.
     
  13. shakti khanduri

    shakti khanduri Active Member

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    Sir,it is apparent that you have deep knowledge of banking industry. kindly suggest your recommendation for manyfold return in future.your modesty can not hide your expertise.
     
  14. elegantly_wasted

    elegantly_wasted Member

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    Nobody can ever claim to have deep knowledge for knowledge is limitless. Anybody claiming to have deep knowledge is a red herring for me.
     
  15. shakti khanduri

    shakti khanduri Active Member

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    My main query has not been replied ,Sir. Kindly elaborate supporting rational also, if you feel fit to reveal.
     
  16. elegantly_wasted

    elegantly_wasted Member

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    @shakti khanduri
    Supporting rational for?? Is it for me treating anybody proclaiming deep knowledge as a red herring?? If this is the case then like I said Knowledge is limitless and thus nobody can ever proclaim to profess deep knowledge.
    On this forum, a lot of names are written about with ease. I dont fault them for there is no punitive accountability associated with handing out names. Separately You had also asked me some banking names and U have them. Other names - have sent you some - these arent multibaggers but I believe will compound your money at a decent pace and some are punt stocks I like at the moment.
     
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