Digital India - A model developed by Varma
Digital India - A model developed by Varma
Banking structure is redesigned to make India a fully digital nation and to usher in 100% E-governance.
Multi dimensional and multipurpose savings account - It is the main keel of this restructured banking.
Purpose of this multi dimensional account
- 1. This savings account can be used for receiving, storing and spending of money.
- 2. It can be used for buying, selling and holding property rights of immovable properties like lands, plots, flats and commercial establishments.
- 3. It can be used for buying, selling and holding properties rights of movable properties like vehicles, gold etc.
- 4. It can be used for buying, selling and holding shares
- 5. It can be used for getting driving license, passport, birth certificate, voter ID card, ration card, pension, relief funds, subsidies, and compensation.
Application of this new restructured banking system:- Banking is expanded so that taxation, tax collections, tax enforcement, tax compliance, registration departments, pass port offices, land registration departments, vehicle registration departments, share transactions, Public distribution system, census department, revenue department can be unified and integrated in this new banking system.
Salient features
Fully liberalised and self regulating banking sector
1. Automatic adjustment of money supply in banking system without any external regulators
2. No external regulators needed to control inflation and deflation.
3. Portable savings account. Customers can shift their accounts with same account number from one bank to another bank at any time without need for closing their accounts in the past bank and opening in the new bank.
4. Portable savings account number. It is valid, active, permanent and portable during his/her entire life period from the time it was given and upto his/her death.
5. No non-performing assets [NPA]
6. Loans can be sanctioned within 5 minutes without need for documents, encumbrance certificates, legal opinions, mortgages.
7. Easily distinguishable real money and loan money
8. No common financial year for all accounts. Financial year of an account begins on the day it opened. There will be no need to submit annual tax returns. All accounts are involuntary taxpaying accounts.
9. Banks will only handle citizens’ savings accounts. The banks are handlers of savings accounts and they do not own them.
10. Money, in this restructured banking, does not have storage value. It will have only transaction value. That means there will be no interest rates on demand deposits and fixed deposits. Money will have no depreciating value. In fact Rupee’s value is constant and permanent for eternity.
11. Total values of money supply, physical money, digital money, loans/advances in the entire banking system can be known at any point of time.
12. Accounting in single monetary unit values without decimals/paisa. All accounts show in single monetary unit i.e. rupee.
13. By using this restructured banking system, single phase election on single day can be held throughout the country. No rigging, no impersonation of voting and no electoral mal practices can be possible in this new banking structure.
14. Electoral rolls/voter listed can be prepared and supplied to Election Commission by banks within one hour. No government machinery is required to prepare electoral rolls/voter lists. These voter lists get updated with new voters and deletion of deceased voters from voter lists at every second.
15. 100% accountable and transparent governance
16. No bankruptcy of banks
17. No third party or agencies required to deposit cash in the ATMs.
18. Economy can be run on limited paper currency. 99.4% of total money supply will be in digital form and only 0.6% of total money supply will be in physical form in Rs 50, Rs. 20, and Rs. 10 notes apart from 50 paisa and 25 coins.
19. Fixed CRR at 10%. It is permanent and there is no need change from time to time.
20. Fixed PLR at 3@ per annum up 10 lakhs and at 4% per annum on loans above 10 lakhs.
21. Main savings account in this new restructured banking system is an involuntary taxpaying account just like respiratory system in human body. No tax returns, accounting and auditing required.
22. Banks’ profits can be known at every day, every hour or even at every minute.
23. There will be no vacancy for cheating chit fund companies in this restructured banking system.
24. Easier and quicker liquidity of all assets that belong to a person or organisation into cash within minutes.
Advantages of Multi dimensional savings account
Every bank branch will become an E-Seva centre.
1. Vehicle registrations and the transfer of ownership rights of vehicles can be made at any bank branch within 5 minutes. No regional transport offices are required.
2. Registration of properties like lands, flats, plots and all immovable assets can be made at any bank branch. Registration for selling/buying of properties can be made within 5 minutes. No registration departments are required.
3. There will be no tax collection expenditure for the Governments and no tax compliance cost for the people.
4. Citizens need not maintain separate account books and submit tax returns annually for paying either Direct taxes on personal incomes or Indirect taxes while running business or industry.
5. There will be no check posts, way bills, accounting, auditing, tax laws, tax raids, etc
6. Electoral rolls can be available at banks at any time as and when required by Election commission.
The electoral rolls will get updated constantly at every second in banks.
7. Exact population figures can be available at every second.
8. Birth certificates, death certificates, rations cards, can be got at any branch within five minutes
9. People can get passports at any bank branch within five minutes.
10. Selling/buying of shares can be done at any bank branch.
11. There will be no multiple selling of the same property to different people and unauthorised selling/purchase and illegal occupation of other person’s property without his/her knowing/consent will not be possible.
12. Total elimination of black money, fake currency, corruption and money laundering
13. Out of total money supply 99.4% will be in digital form and only 0.6% of total money supply will be in physical form.
2...........Method of Implementation: Basic model (India)
* The government should build the basic infrastructure [building premises and internet connections] for providing banking service for every village/suburb/town or colony having a population of around 2500 with the help of private sector banks and institutions.
* Banking licence should be fully liberalised.
* Banking licence should be given to any promoter or institution that has capital investment of minimum one thousand crore rupees. The qualification to start banking business should be a minimum capital investment of 1000 crore rupees. Even individuals or a set of people with capital of 1000 crores shall be allowed to operate banking business.
* Banks should be allowed to handle bank accounts whose cumulative total money should not exceed 18 times the bank’s own capital money.
* Banks should be allowed to generate money and sanction loans up to 9 times the value of its capital money but not more than the 47.37% of the value of [total money in all accounts it handles + its own capital money]. Read more on money supply [real money and loan money] on page 16.
* [For example if a bank has 1000 crore has its capital money, the total money it will be allowed to handle from all its accounts is 18,000 crore rupees. So with the capital of 1000, the total money the bank can handle is 1000+18000= 19000. With this total money supply this bank handles, the loans sanctioned by this bank should not exceed the value of 47.37% of 19000crores] = 9000. With the 1000 as it capital money, the maximum level of this bank’s money handling capacity of 19000 crores = 9,000crore loan money [maximum level] + 10,000 crore real money]. As the bank’s capital money increases its money handling and loan sanction capacity will increase correspondingly.
*A bank’s money supply handling capacity with 100 as its capital will be at the level of 100 when the bank has zero accounts at the launching time and it can reach up to at the maximum level of 1900.
*A bank’s loan sanction capacity with 100 as its capital will be at the minimum level of 47 and at the maximum level of 900 when the bank reaches the maximum level of total money it handles reaches 1900. On the first day with 100 as its capital the bank, without any accounts, can generate and sanction loans up to 47 only. If their accounts increase, the money it handles also increases and correspondingly the money generation capacity also increases up to the maximum level of 900 when total money it handles in all its accounts reached the maximum level of 1900.
* Banks should not be allowed to use or withdraw its capital money by its promoters for any purpose other than paying salaries, stationery or other running or operating costs of the bank. That means the initial capital money cannot be used for any other purpose or withdrawn by its promoters.
* There should be one bank branch for every 2500 people. That means there should be a bank branch in every village or colony with a population of 2500 people. India need 5,00,000 bank branches and minimum of 15 lakh bank employees. See Bank’s operating cost and profits on page 18 onwards.
* The government should bear entire cost of the rental charges, internet charges and current charges of bank branches situated in rural areas to promote establishing bank branches at the ratio of one branch for every population 2500 to 3000 people.
In this new banking system there will be three types of accounts. The three types of bank accounts are called 1 Main Savings Account [MSA], 2 Sub Savings Account [SSA] and 3 Corporate Account Number.
* Every bank should have computers that should be capable of taking biometric inputs [finger print images and iris images] for opening new savings accounts. The collected biometric data of iris and finger prints of an individual will be encrypted and sent to the database in the servers of super computers at RBI. Using this encrypted biometric data, a Main Savings Account number [MSA] will be generated at the server maintained by the RBI. If the user tries to provide the same biometric to open another account in the same branch or another branch anywhere in the country, the main server should be able to identify and reject the new account generation for the same individual. There should not be multiple generations of account numbers with an individual’s same biometric data [finger prints and iris]
*It should be made mandatory for every citizen above the age of 15 years to take a Main Savings Account in any bank branch.
7. The server should have the capacity to handle 150 crore individuals’ data and be able to handle 1500 crore transactions every day.
*After establishing sufficient number of banks/service centres by the Government (for example, India) with the help of private sector banks and financial institutions, all the citizens above age of 15 years should be asked to open Main Savings Accounts at any bank within 30 days without need for any initial deposits. It can be opened with zero balance. Indians, who reside outside India, should be given six months time to open Main Savings Account at any branch in India. All these bank branches are connected to central servers. No second generation of Main Savings Account number of any person would be possible with the same data of his/her finger and iris images. There after no new Main Savings Account should be given to any individual. From here after anyone who does not have Main Savings Account should be deemed as illegal migrant.
* A person’s Main Savings Account number will remain same for his/her entire life time. He/she can change the bank at any time but the account number will remain same. That means the Main Savings Account number is portable, active and permanent during his/her entire life period. These permanent Main Savings Account numbers cannot be changed. These account numbers will become ceased or closed only upon death of the account holder.
Usage of Main Savings Account
Unlike savings account in the present banking system, this Main Savings Account consists of 5 sub accounts. It is a combinations of 1] money account 2] Land Savings Account[LSA] 3] movable property account (MPA) 4] Shares account(SA) 5] Personal account(PA).
The MSA shall be used to deposit, withdraw, receive or pay salaries, professional fees, service fees, remunerations, donations, loans etc The Main Savings Account (MSA) should also be used for buying of shares, land for agriculture or industrial purpose, plots, flats, gold, jewellery, vehicles, commercial establishments or any other movable or immovable property. Main Savings Account is also needed to get driving licence, passport, voting right, subsidies, funds, monthly ration, pensions, remittances and loans (personal, agriculture, business, educational and industrial) and for getting compensation/exgratia/relief funds in the event of natural calamities like cyclones, earthquakes, floods, famines, accidents, etc,
From here onwards this restructured banking system is called “TOP TAX SYSTEM”
At the initial launching of this “TOP TAX SYSTEM”, all the persons above the age of 15 years will be given the Main Savings Account numbers. It should be mandatory for every citizen above the age of 15 years to have Main Saving Account. Children below the age of 15 years will be registered in their mother’s or father’s or guardian’s or social welfare ministries’ or NGO’s account. From there after every child will get Main Savings Account once he/she reaches 15 years of age. Although this account number is given and registered in the mother’s Main Savings Account within one month of child’s birth, it will be activated and come into live account only when the child reaches 15 years of age as decided by the Government. A person’s Main Savings Account will become operational and start functioning from the age of 15 years as decided in the particular country. In case of orphans the account numbers will be registered in the social welfare ministries’ accounts and it should be made mandatory for State Governments to look after every orphan’s well-being and care till he/she reaches the age of 20 years and he/she gets employment.
Read full document that is available on my website----
www.vijayavarma.com
https://archive.org/details/BankingStructureRedesigned
posted by VIJAYA KRUSHNA VARMA
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