The world's second most populous nation has been profoundly shaken by demonetisation — and no wonder, as a full 86 percent of Indian cash in circulation is in the process of being pulled out and replaced. With no warning at all before the announcement 20 days ago, daily life is suddenly more difficult for the vast majority. The Economist reports the on-the-ground effects for different classes, while also noting that "GDP growth might be as much as two percentage points lower this quarter and next before returning to normal as the money stock is replenished, reckons Pranjul Bhandari of HSBC". But consider this figure as a counterweight: "In the fortnight after the announcement, bank deposits were up by 5.1trn rupees [$74.23bn], thanks to an influx of old notes and restrictions on withdrawals of new ones." That, by any measure, is an extraordinary cash infusion, and more is rolling in all the time as the Wednesday deadline to deposit otherwise-worthless notes approaches.
Meanwhile, tourist destination Goa plans to become cashless in a month's time. And opportunities are sprouting for fast-reacting players: "Demonetisation has created an immediate need for alternative ways to pay and mobile seems to the obvious answer owing to its penetration," says Paytm founder, Vijay Shekhar Sharma.
The already alarming phenomenon of ransomware has taken a further turn with news that blackmailers who successfully hacked Valartis Bank Liechtenstein are now leveraging their incursion to attack customers. "The hackers are demanding ten percent of the account balances, to be paid in Internet cryptocurrency Bitcoin to help preserve anonymity," says Reuters, quoting German newspaper Bild. The cybercriminals have stated that they will turn over transaction histories to media outlets and financial authorities should their demands go unmet.
Having already lost the commitment of both Banco Santander and Goldman Sachs, the R3 distributed ledger consortium seems to be having some difficulty getting off the ground with all aboard: a leaked document suggests that JPMorgan, Macquarie Group and US Bancorp have yet to submit a bid in the current $150m round of funding. But the onward march of the technology seems unstoppable: Hong Kong authorities are "looking seriously" at using the blockchain in the mortgage industry.
Finally, the saga of the Williams and Glyn spin-off from Royal Bank of Scotland continues in the United Kingdom. Challenger bank Clydesdale's CEO, in an interview with the Telegraph in London, is confident that he can follow his bank's successful listing on the London Stock Exchange earlier this year with a well-executed deal with RBS to take on an additional 300 branches and bolster Clydesdale's campaign to break into Big Five business. Others in the market are in more cautious humour: "Banco Santander is set to abandon plans to split its UK operations in two to comply with incoming ringfencing rules, as the Spanish bank seeks greater flexibility to shift operations out of the UK if needed because of Brexit," reports the Financial Times.
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