Retirement, Uncategorized

Retirement Age

The retirement age has been fixed at 58 or 60 in most government jobs, banks, insurance and many other sectors. In the services some retire even at 55 or less. The good part is that for many such retirees, they get pensions.  Given increasing longevity, any healthy person now needs to look at 25-30 years of retired life after working for 30-35 years. As one agers, the biggest tension is how to meet medical expenses.

The clamour for banks to reduce interest rates on loans will persist. When banks do reduce lending rates, they will also drop savings rates. Unfortunately savers do not have the clout to demand better rates, whereas borrowers do. So while we will live longer, the funds available to ensure a comfortable lifestyle and returns on these savings will go down.

There is a great deal of discussions on our “young” population. Demographic dividend. For sure the young have aspirations and they need encouragement and jobs. What the government is largely ignoring is the increasing number of elderly who will need support.

Many European governments and other countries have raised retirement age to 65 years. It is time India also thinks on those lines. Bureaucrats, especially those in the higher levels, wrangle for themselves cosy post-retirement sinecures, and they do not care to think about the majority population of elderly.


Banking, Uncategorized

Demonetisation Success

There is a strong narrative being pushed, by those who want to discredit Demonetisation, that funds that has been deposited into bank accounts is all “white” money. This is not true. What matters, and how the distinction needs to be made between black and white, is to determine whether funds – held either in cash or in bank accounts – has been declared for tax purposes. What this means is that any amount – whether held in cash or deposited in your bank account – can be and is “white” money provided the funds have been declared in your tax return.

Based on analysis of data at their disposal, tax authorities have raised queries with more than 18 lakh bank account holders to explain the source of the funds deposited into bank account during the remonetisation period. The amount so detected reportedly runs upto some Rs 3.5 lakh crores. Till a satisfactory clarification is received by tax authorities, such amounts are being treated as unexplained black money. ]

There is also the claim by many who should know better is that only a minuscule amount of counterfeit notes have been detected and therefore there is very little or no fake notes. There has been a standard procedure in place for years that enjoins upon a bank branch to report any fake note tendered by a customer should be reported to the police. The police will conduct an enquiry to determine from where and how the fake notes came to be held by the customer. In practice, branches avoid getting their reliable customers into trouble by just returning the notes to the customer asking them to destroy them. The point is that fake notes in circulation do not come into banks, and to therefor claim on that basis that fake currency notes do not exist is wrong.

Tax authorities and the finance ministry are also aware that staff at several bank branches colluded with some well-heeled customers to fraudulently exchange their 500/1000 rupee notes using dormant accounts and shell company accounts. Jan Dhan accounts have also been extensively used to launder money. Ongoing investigations in this regard would certainly throw up anomalies.