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Australia Should Scrap Its Big Bank Notes Like India, Recommends UBS Group
Swarajya Staff
Nov 14, 2016, 09:28 PM | Updated 09:28 PM IST
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UBS analysts headed by Jonathan Mott said in a note to clients on Monday (14 November) that Australia should follow India’s example and demonetise its biggest bank notes.
Removing large denomination notes in Australia would be good for the economy and good for the banks.
The benefits of this move, Mott believes, would include reduced crime and welfare fraud, increased tax revenue and a “spike” in bank deposits.
The report came after India last week demonetised its existing 500 and 1,000 rupee notes. The government is issuing newly designed 500-rupee and 2,000-rupee bills with additional security features to deter counterfeiters.
As per the UBS report, in Australia, 92 per cent of all currency by value is in $50 and $100 Australian notes, the larger of which is “rarely seen”. Since 2009, ATM transactions in Australia have declined by 3.4 per cent a year, while credit-card transactions have increased 7.3 per cent a year. The UBS analysts said that all the A$100 notes were deposited into bank accounts, household deposits would rise by about 4 per cent.
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