Was demonetisation in India a step too far?

Nicholas Wallwork

Nicholas Wallwork

Editor-in-Chief
Staff member
Premium Member
Just a couple of days ago we covered the developing situation in India which has seen some of the country’s highest denominated banknotes classified as illegal going forward. This surprise move by the authorities has seen queues outside many of India’s banking institutions and a growing backlash from the investment community. So, was demonetisation of

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R

realdeals

Active Member
In many ways the Indian authorities were in a Catch-22 situation, if they gave notice about the change in banknote denominations the “criminal fraternity” would have pushed through transactions before the change. However, by effectively bringing through the denomination change overnight the authorities have impacted the finances and the trading of those operating totally above board and in line with regulations. Long-term positive, short-term mayhem?
 
L

lookinginvest

Member
I totally agree, what else could the Indian authorities do? If they give prior notice then the criminal fraternity, and those with undeclared funds, would have acted to integrate their funds into the system. Unfortunately, once the government decided this was the correct course of action they had to act immediately.
 
N

nmb

Well-Known Member
Personally I think this is a brave and clever move by the Indian government which will bring great benefits in the longer term. In the short term there could be some upheaval as many who have done nothing wrong have been impacted. Also, the timing of the move had to be quick in order to catch criminals and those with undeclared cash by surprise.
 
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