Source: News Bharati English15 Nov 2016 09:48:41
Canberra, November 15: Commending India’s move of demonetization, Swiss global financial services company UBS advised that Australia should also follow steps of Indian government and scrap biggest bank notes. “Removing large denomination notes in Australia would be good for the economy and good for the banks,” UBS analysts led by Jonathan Mott said in a note to clients on Monday
The analysts argued that the move will help Australia by reduced crime and welfare fraud, increased tax revenue and a spike in bank deposits. The report came after India last week banned its existing 500-rupee and 1,000-rupee notes as part of a crackdown on tax evasion and the black economy that the government hopes will force people to declare unaccounted income and boost tax coffers. The Indian government has introduced new notes of 500 and 2000 rupee with biggest security features to deter counterfeiters.
92% of all currency in Australia is in value of A$50 and A$100, the larger of which is rarely seen. Removing bigger denominations would boost digital payments in a country where the use of cash payments is continuing to fall, said UBS analysts in the report.
Since 2009, ATM exchanges in Australia have fallen 3.4 percent a year, while Visa exchanges have expanded 7.3 percent a year, UBS said. The program would likewise be sure for banks. In the event that all the A$100 notes were saved into records at the loan specialists, family unit stores would ascend by around 4 percent, the UBS experts said. That would likely be sufficient to fill the huge banks' administrative ordered net stable subsidizing proportions and decrease dependence on seaward financing, they said.
The European Central Bank in February said it was thinking about pulling back 500-euro notes as a result of an "expanded conviction in world popular assessment" such high-esteem notes are utilized for criminal purposes.