Big bang reform, game-changer that no one expected, say bankers

The government Tuesday took a bold step of discontinuing with Rs 500 and Rs 1,000 notes from midnight in a move to curb black money and counterfeit currency.Most of the bankers that spoke to CNBC-TV18 have loaded this move. Chanda Kochhar, managing director and chief executive officer of ICICI Bank says it is the most transformational and game changing move ever. The move is sure to impact the parallel economy or black money.It is a big bang significant move and a shift away from cash economy.Addressing concerns of the customers, she said banks will be shut for customer- facing transactions tomorrow but customers will be able to start withdrawals from Thursday. The denomination could be either new currency or the old Rs 100 notes, she added. However, customers exchanging cash will need to carry identity card.Keki M Mistry, Vice Chairman and CEO, Housing Development Finance Corporation (HDFC) also lauded PM Modi’s move terming it as fantastic and well-timed post the disclosure scheme. He said the concept is good but implementation could be a bit of a problem. “This move in one-stroke will remove huge amount of black money from the system,” said Mistry.SBI Chairman Arundhati Bhattacharya said:  "We have just now been advised of the government's move to demonetise current series of Rs 1,000 and Rs 500. We have handled demonetisation earlier and will do so again."“Tomorrow banks will remain closed in order to withdraw these notes from counters and ATMs. We will strive to restock ATMs at the earliest and make them operational. Govt has given enough exemptions to ensure urgent needs are met. We will work round the clock to ensure that customers have a smooth experience," she said.Deepak Parekh, Chairman of Housing Development Finance Corporation also termed this move by the government as bold one. He said it is a big bang reform that no one expected.One could expect disruption in the economy in the short-term but would be good in the long-term, said Parekh. However, banks will have to work hard to make sure it is a smooth transition.