08 June 2011

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Reasons to Ban Currency Notes of Rs.500 and 1000 in India Effects of Ban on Currency notes of Rs. 500 and 1000

Reasons to Ban Currency Notes of Rs.500 and Rs 1000 in India
Effects of Ban on Currency notes of Rs. 500 and 1000.

Yes it is possible to ban Currency notes of Rs. 1000 and Rs.500.

Yes it is the necessity to ban Currency notes of Rs. 1000 and Rs.500 in India.

Currently how the total Indian currency is divided?

1. Rs.100 Notes = 23%

2. Rs.500 notes = 44%

3. Rs.1000 notes = 24%

Notes of 100,500 and1000 Rs. account for 93% of the Total Currency Money.

Fake currency notes are also found only in the currency notes of Rs.500 and Rs. 1000.
As per media reports currently fake currency in circulation in India is more than Rs 1,69,000 to 200,000 Crore

Please know that Reserve Bank of India has no power to ban the currency notes of 500 and 1000.

Only government of India is allowed to ban the currency notes.
Only government of India got power to ban the currency notes.

The central bank only prints currency notes, denominations are decided by the government,"

Government of India Reports says that 70% Indians earn daily Rs.20.

If someone is earning Rs.20 daily then he must be spending Rs.20 daily.

I assume that if any Indian is earning Rs.100 daily then also he can spend daily Rs.100.

What is the meaning per capita income?
What is the definition of Per capita income?

Per capita income is calculated by evenly dividing the national income among the country's population.

Per capita income – income per person in a population

Per capita income is often used to measure a country's standard of living.

Now Know the Per Capita Income of few countries

1. per capita income of US is 40000$

2. per capita income of UK is 20000£

3. per capita income of Japan is 40,00,000¥

4. Per capita income of India is projected to grow by 17.3 per cent to Rs 54,527 in 2010-11 from Rs 46,492 in the year-ago period. Currently Per capita income of India is Rs.46, 492. Per capita income (at 2004-05 prices) stood at Rs 36,003 in FY 2011 against Rs 33,731 in the previous fiscal, according to the latest data on national income. Official data released on Feb.7 2011.

5. Per capita income of India in US dollars will be $ 1041.6321 as per conversion rate June 8, 2011. INR Rs. 46, 492 = US $ 1041.6321

Divide Per capita income with highest denominator note and you will find the magic number and magic number for US is 400, UK is 400 and Japan is 400 and India is 37.

India needs to get the magic number 400.

Now what is the highest currency denominator in USA, UK and India?

1. USA highest currency denominator is $ 100 and Per capita income is 40000$

2. UK highest currency denominator is 50£ and per capita income is 20000£

3. India Highest currency denominator is Rs. 1000 and per capita income is $ 1041 or INR Rs. 46, 492

Now do you see that ratio of Per capita income and highest denominator currency?

1. USA = 40,000 $ = highest currency note 100$

2. India = 1041 $ = highest currency note is INR Rs 1000 = 22.409 $

When highest denominator note is 100$ what is the per capita income?
Per capita income is 40,000 $

In other language when per capita income is 40,000$ what should be the highest denominator note?
It is 100$

Now divide 40,000 by 100 it will be 400.

Now what is the per capita income of India it is $ 1041
Then what should be the highest denominator note for India.

40 000 = 100
1041 =?

The answer is 2.60$ should be the highest denominator note for India.

100 Rs. = US $ 2.24 - As per Conversion rate on June 8, 2011

1041 multiply 100 = 104100
Now divide it with 40,000 it will be 2.60%

Now same way if you will find different nations you will come to know that
Their ratio of per capita income to highest denominator currency is 400.
For UK magic number is 400
For Japan magic number is 400.

Not exactly 400 but it will be near to that in every developed country.

Thus India does not need the currency notes of more than Rs.100.

Today in India when we read about corruption amounts and fake currency notes found the number is in Crores always.

Did you ever heard that fake currency notes of 50 and 100 found in Crores of Rs?
Did you ever heard that bribe of Rs.1 Crore given in notes of Rs.50 and 100 notes?

These types of cases are rare I have never heard or read about this.

I am not here writing how the corruption happens in India.

Every one knows when corruption happens corrupt people use currency notes of Rs. 500 and 1000

To give bribe everyone knows that currency notes of Rs. 500 and 1000 are used.

What will happen if suddenly Government of India bans Rs.500 and Rs.1000 notes?

Nothing will happen for few days people will find it very difficult to do business.

To gain something one has to suffer the pain also.

In developed nations 90% transactions happen through banking system.

In India only 20% transactions happen through banking system.

Today why no one is interested in the development of banking system of India?

The reason is easy access to high denomination notes.

Once we will ban these notes village people will also demand open the banks in our area.

All the banks will see the growth opportunities in village and they will start to open banks in villages.

If you will ask any economist if he will tell you that good country is one where all the transactions happen through banking system.

Keeping poor people out of banking system is not good sign for any country.

I think that presence of high value notes in any country is the sign of corrupt country and corrupt culture and corrupt politicians.

Do you know that America also banned the high denomination notes in America in year 1969?

Year 1969 America banned High value notes to stop corruption.

America became the very corrupt country. The criminals, mafia dons and white collar criminals took full control of American economy.

That time American banking system was not developed.

All the transactions happened in Cash using notes of $ 500, 1000, 5000, 10000 including one lakh dollar note.

American population citizens were suffering because of corruption of politicians and mafia and white collar criminals.

In this situation President Richard Nixon took the bold step.
He did what no one expected.
In year 1969 President Nixon withdrew all the notes of higher than 100$

It was a great blow to corrupt people; this started the development of American banking system also.

American people found it very difficult to shift suddenly but to get something one has to suffer the pain also.

White collar criminals and politicians found it very difficult to accept bribes and do the corruption this it helped to reduce the corruption in America also.

As the notes of higher denomination were banned, baking system started to develop very fast in USA.

Now when we will ban the Notes of Rs.500 and Rs.1000 common citizens of India will face the problems for few months, but they will get used to banking system.

Government will be forced to develop our banking system in India.

Always remember purpose of Rs.500 and Rs.1000 notes is nothing but to develop black economy in India.
To take and give bribe, to do corruption.

Do you want Corrupt India or Honest India?

What America can do it why we Indians can not do it?

Demand and Support ban.

Ban Rs.500 and Rs.1000 notes in India.

And start a journey towards Honest India.

Reality views by sm-

Wednesday, June 08, 2011

Keyword Tag – Ban Currency Notes Rs.500 and Rs.1000


Mohinee June 08, 2011  

Great work! Very very important information in all aspects. Thank you so much SM for such a deep analysis.

sm June 08, 2011  


Ravikar June 08, 2011  

In other language when per capita income is 40,000$ what should be the highest denominator note?
It is 100$
Then what should be the highest denominator note for India.

dr.antony June 08, 2011  

That was real information.I didnt have an idea about this. Now I understand the reason for Ramdev's demands to withdraw500 and 1000 rupee notes.

Bikramjit June 08, 2011  

wowo good info and good research ..

sm,  June 08, 2011  


sm,  June 08, 2011  


sm,  June 08, 2011  


Renu June 08, 2011  

good thought..yes why not?

mermaid gallery June 08, 2011  

very interesting post....this is all new to me and certainly is an interesting subject....

raju p v,  June 09, 2011  



Destination Infinity June 09, 2011  

Do you think lack of availability of 500 and 1000 rupee notes will stop corruption? A lot of corruption happens with normal people using 10, 20, 50 and 100 rupee notes itself!

Destination Infinity

Insignia June 09, 2011  

This was good info. I didnt know a lot of things. Thanks

sm,  June 09, 2011  

mermaid gallery,,

sm,  June 09, 2011  

raju p v,,

sm,  June 09, 2011  

Destination Infinity,
No law can stop the Corruption.
Law will only reduce the corruption.
It will surely stop the corruption of Billions and Crores of rupees.
I never heard some paid bribe of Rs.1 CRORE using currency notes of 10,50 and 100.

sm,  June 09, 2011  


Kirti June 09, 2011  

Great information sm. The 400 thing.

Kirti June 09, 2011  

Black money is happening due to lack of clarity. Economy is not an easy thing. No one can give the correct answer to why black money is happening.

Regarding the solution to black money by banning 500 and 1000 notes. I will rather ban the ATMs and leave the discretion to the banks. Because to me economy is confidence on others.

Kirti June 09, 2011  

Banning the ATMs can be done by the banks. But banning 500 and 1000 by government of India. That is why.

Kirti June 09, 2011  

If camera is installed in Tata house and other business areas, corruption can be reduced.

sm,  June 09, 2011  


Team G Square June 09, 2011  

Amazing analysis , it justified to ban these notes .

sm,  June 09, 2011  

Team G Square,,

prince george June 30, 2011  

bab ram dev and anna hazare may help us ???????????????

sm,  June 30, 2011  

prince george,,

G.D. Singh November 12, 2011  

i was awestruck by your research man...
so i copied this article and sent it as an email to the prime minister of India !!!
i hope that you would forgive me for copying from your blog but it was our better future only.

Anonymous,  April 17, 2012  

Good one dude..So Informative.

Anonymous,  May 23, 2012  

To reduce chaos and opposition from politicians, opportunity can be given to all people to deposit valid (not counterfeit) currency of 500,1000 into banks with no question asked about source. If anyone dares to do it let it be so. Once the banking system is improved, through mobile phone and other e-methods, we can even think of banning Rs.100 denominations
This will not only stop corruption, but most of the crimes like kidnapping, prostitution, sale without bills, drug sales and use, illicit liqueur sale, sale of illegal medicines, etc.
Good work SM.

hemant Yadav June 08, 2012  

we want also to reduce the corruption of India.
The government should take a quick decision against the currency note more than Rs. 100 (500 , 1000)and improved the banking system as soon as.

Anonymous,  November 08, 2016  

Yaar SM tu toa mindblowing dude. Tune toa future bata ya tha jo aaj jake sach ho gaya. Lagta hae PM ji ne tera blog pada hoga.

M.P. KumarKutty November 09, 2016  

Then why they introduced Rs500/, Rs 2000/ instead of retaining Rs 100/as the largest denomination? Within 10 years this will open conduit for another string of corruption.