Demonetization proof

As whole of India erupted in chaos post demonetization, Kashmir remained calm. Was it the efficient Banking network or almost nil economic activity post July 7 this year.


The demonetization move by the Prime Minister Narendra Modi government that created chaos elsewhere in India has had very little impact in Kashmir.
Kashmir remained calm after the sudden scrapping of high denomination currency notes, even as it was already in the middle of its longest-ever agitation.
Prime Minister Narendra Modi, on November 8, brought the entire country to toes after he announced that currency denominations of Rs 500 and Rs 1,000 would no longer be deemed valid.
With over 80% of the country’s currency now suspended, the announcement sent the nation into frenzy, with many queuing up outside banks and ATMs in a bid to get their hands on valid currency.
Figures disclosed by the government suggested that money worth 16 trillion was in circulation across the country of which 85 per cent was in higher demonization notes of Rs 500 and Rs1000.
So far, more than 80 deaths have been reported in different parts of India, credited to the demonetization move by the Central government.
In Kashmir, the announcement made people feel discontent, but people didn’t panic. No beeline of people was seen outside banks, nor did any untoward incident happen after the demonetization announcement.
The banks credit the calm situation to the slew of measures adopted to handle the expected rush of people and to provide them on-spot services.
Soon after the demonetization was implemented, banks announced extension of working hours, doing away with ATM charges and expanding credit limits to handle the expected huge rush to tender now defunct Rs 500 and 1000 notes.
Bankers say that they were advised not to take additional leaves and were asked to function even on Sundays and Saturdays.
A top official from the Jammu and Kashmir Bank said that the outreach of the bank had helped the state to come out of the demonetization crisis.
“Our bank has the most outreach here and you can find bank within a distance of one kilometre. Further, every person here has the bank account, so there was not that big a need to change the currency. People came and got their money deposited in their bank accounts,” he said.
Similarly, many banks here stalled other operations and concentrated to provide cash exchange services to the customers.
“We had closed other counters and all the staff was deputed to receive old cash from the people to exchange or deposit it in their bank accounts. Even our ATMs continued to function soon after the demonetization announcement was made,” S S Andrabi, a branch head of State Bank of India, Residency Road Srinagar, said.
The banking sector is one among the few areas that has made progress over the years in the state than the average national level.
As per government survey, on an average one bank branch is available per seven thousand people, while for India it is per ten thousand persons.
The survey report says that 1,893 branches of scheduled commercial banks, cooperative banks and state financial corporation (SFC) are functioning in J&K.
The number of branches has risen by 15.57 % from March 2013 till September 2014.
Meanwhile, economists cite the least economic activity in wake of the unrest as the main reason behind the calm that Kashmir witnessed post demonetization.
“It was obvious that here people won’t panic. Actually we saw no economic activity here for a long time due to which people have deferred expenditure. Further our problem was different from the rest of the country. The demonetisation has been taken well by the people in Kashmir. Here people traditionally keep money deposited in bank accounts,” Prof Nisar Ali, the valley’s noted economist, said.
He also said that black money, if any, is not that liquefied to create panic here.
“Here, someone having black money may have already converted it into other forms. People here invest in real estates and don’t keep cash with themselves. It is not in liquid form to lead to any crisis here,” he said.
Shakeel Qalender, a noted businessman says that majority of the people here had bank accounts where they keep the money deposited. “We have a workforce of around 42.5 lakh and 90 per cent of them are bank accountholders. Of them, 58 per cent are related to agriculture and allied sectors and 42 per cent to public enterprises sectors,” he said.
The demonetization had also reported least impact on the business sector in Kashmir which already was battling in wake of unrest.
Kashmiri businessmen say that the current unrest dominated the demonetization chaos here.
“What would demonetization do here when businesses were already closed for the last four months? So naturally, it had no impact on the most of the business here,” Kashmir Chamber of Commerce and Industries, President Mushtaq Ahmad Wani, said.
However, initially a few of the trade sectors including horticulture and gold reported a setback due to its implementation in Kashmir.
The Kashmir’s apple industry witnessed a huge decline in the demand from many outside markets during the first two weeks of demonetization.
The gold business in Kashmir witnessed 100 per cent loss due to the demonetization.
The Kashmir Gold dealers and workers association (KGDWA) here say that the move, coming amid the shutdown, continuing since July 8, caused them almost a 100 per cent loss this year.
“People with a large amount of old currency notes are coming to our shops, but we have to turn them away. There is not a single entry in our account books due to the demonetization of currency notes of Rs 500 and Rs 1000,” said Bashir Ahmad Rather, president KGDWA, who is also the secretary of New Delhi-based Akhil Bhartiya Swarncar Sang.