Boostrapping : CURR.03 - Transferring Existing Legal Tender to Citizens' Legal Tender
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Proposed administrative procedure - CURR.03
Transferring   Existing   Legal   Tender   into   Citizens'   Legal   Tender

Purpose : To reduce nexusproness in issuance of Legal Tender

Pre-requisite reading : CURR.02

Transfer from existing system to new system

Transferring existing system to the system I described will need to address two issues:
  1. managing existing deposits in nationalized banks and other GOI financial institutions (such as Unit Trust, Indira Vikas Patra etc.)
  2. managing loans issued by nationalized banks and other GOI institutions.
On this web-page, I will describe the proposed procedures to manage deposits and loans.

Managing deposits

  1. All existing accounts, checking, savings and fixed in all nationalized banks and GOI owned institutions (such as UTI) will be converted into CLT-accounts.

  2. No interest will be given after the conversion.

  3. The account holders may transfer them to another interest bearing accounts after conversion.

Recovering loans

All loans (and other investments such as stocks or bonds) issued by all nationalized banks will become RBI property. The recollection will be managed by RBI-Governor. Following are the procedures
  1. No bank will charge interest on any OLD loan, after "Citizens Legal Tender Law" is passed.

  2. The loan must be repaid in 50 equal monthly installments.

  3. The installments must be given ONLY using a check from CLT-account at an SBI branch.

  4. If an installment fails to arrive by 15th of the month, then ENTIRE collateral should be auctioned within 90 days. If the debt is not recovered, all the assets of borrower too will be confiscated and auctioned within 90 days. After that, the debt will be washed off.

Thus all the debts in legal tender will get cleared in less than 5 years.

Advatages of CURR.03

This will convert the existing legal tender into Citizens' Legal Tender, and remove ALL the traces of existing legal tender within 5 years.

Draft of the act to create procedure CURR.03

To enact CURR.03, the citizens would need to pass "RLPP/Jury over RBI/SBI" Act in the Parliament. The draft of the Act is given here.

     It will be wiser for citizens to first enact procedure LM.03, and then use LM.03 to pass this act. To know about procedure LM.03, please click here.

If you have any other question, please mail it to Thousand thanks in advance.

Next - CURR.04 : Cancellation of foregign debt