Retail Money Laundering
November 11, 2016 Leave a comment
Wholesale Laundering
November 11, 2016 Leave a comment
Wholesale laundering happens when seasoned chartered accountants and money market brokers bring together two kinds of people: one, with excess, unexplained cash and the other having a shortage of it.The latter are small firms whose books show large `cash on hand’ but actually hold very little physical cash.These are companies which have spent their earnings and fund withdrawals from banks for personal uses, bribes, and commissions expenses that are not reflected in their books of accounts.Though their books show `cash in hand’ they don’t really have the cash as it has been used in activities that is difficult to account for.They are the perfect match for people and businesses who are looking for avenues to salvage their hidden bills of Rs500 and Rs1,000 these days. If the stakes are high, a few companies with sizeable ‘cash on hand’ in their balance-sheets, may even be acquired by those with large undeclared funds.Such deals would go on till December 31, the dead line for exchanging and depositing Rs500 and Rs1,000 notes with banks.
Here’s how it works Read more of this post
Raghuram Rajan On Demonetization
November 9, 2016 Leave a comment
“In the past demonetisation has been thought off as a way of getting black money out of circulation. Because people then have to come and say “how do I have this ten crores in cash sitting in my safe” and they have to explain where they got the money from. It is often cited as a solution. Unfortunately, my sense is the clever find ways around it.They find ways to divide up their hoard in to many smaller pieces. You do find that people who haven’t thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetization. It is not that easy to flush out the black money. Of course, a fair amount may be in the form of gold, therefore even harder to catch. I would focus more on the incentives to generate and retain black money. A lot of the incentives are on taxes.”
Demonetization Then And Now
November 9, 2016 Leave a comment
Mr Modi may have shocked the nation with yesterday’s announcement of demonetization, but the prime minister’s move was hardly unprecedented. India has demonetized select denominations of its currency twice before. Read more of this post
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