Portabl bank account
Portable bank account can be shifted from any bank to any bank at any time with the same account number
Published on: Mar 4, 2016
Transcripts - Portabl bank account
Portable bank accountVIJAYA KRUSHNA VARMA
Varma suggests radical bank reforms to usher in fully liberalized and transparent economic
system. The time has come to radically reform banking sector to the ultimate level where there
will be no NPAs, unemployment, black money, fake currency, economic recession and
corruption. The government liberalize the banking sector to establish a bank branch at every
village or colony having population of 2500 so that each bank shall handle approximately 2000
The ultimate banking reforms are needed for the following applications
To give every citizen above the age of 15 years a portable bank savings account with
permanent account number from birth to death. This portable bank account can be shifted
from any bank to any bank with the same account number at any time.
To make India a fully digital nation and to usher in 100% e-governance
To expand Banking to the ultimate level so that many State and Central Government
departments can be integrated in the banking system to cut the present government size and
non plan expenditure to 1/3 level.
To make the banking as intermediary between the Government and people
To integrate the Government and governance in the banking system vertically and horizontally
To abolish all Direct and Indirect taxes and merge all the tax collection departments of Central
and State governments in banking system
To get away with accounting, auditing, tax returns, tax collection costs and tax compliance
To know up to date bank profits at any time and to avoid nonperforming assets
To make money supply automatically expands or contracts in the banking system according to
demand for money, growth rate and population growth.
To achieve zero deficit fiscal and revenue budget
To make budget preparation simple and easy
To eliminate black money and corruption
To make every bank branch an E-seva center
To streamline the PDS to keep subsidies out of the reach of the rich
To streamline agriculture subsidies to stop farmer suicides and keep subsidies out of the reach
of rich farmers, high income group people, industrialists, contractors, political leaders and
To stop illegal migration effectively and permanently
To construct totally toll free highways, express ways and high level railway tracks
To control unemployment, provide social security to all, and stop child labour.
To get the updated population figures at every day.
To provide health care and the highest quality education to all people alike
To enforce land ceiling act in totality.
To achieve 100% food security, energy security and national security
To help people get passports, birth certificates, death certificates, loans, monthly rations,
pensions, natural calamity compensations instantly at any bank branch.
To prepare and supply electoral rolls for the election commission and help it conduct one day
polling in single phase for general elections
To make India one fully open market without any check posts
Before you read this document please down load and study the working modules of this new
banking system from the website www.vijayavarma.com
The concomitant study of this text document along with the working modules
will help it understood more easily. The links to the working modules for new banking system
My suggested regulations and guidelines for
issuing licenses for banking business
* 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. There should be no upper limit for bank’s capital investment. Even individuals or a set
of people with capital of minimum Rs. 1000 crores shall be allowed to operate banking business.
* Banks should be allowed to operate any number of branches.
* Banks should be allowed to handle bank accounts through its branches whose cumulative total money
should not exceed 18 times the bank’s own capital money.
* Banks should handle bank accounts and not own them. These bank accounts should be portable with
portable account numbers.
* Customer should have absolute right to shift his account from one branch to another branch of the same
bank or another branch of different bank.
* The money in the customers’ accounts should not have any storage value. It should have only transaction
* The PLR rates on loans should not be more than 3% per annum up to Rs. 10 lakhs and should not be more
than 4% per annum on loans/advances more than Rs 10 lakhs.
* The banks should not be allowed to take deposits from the customers. That means there should be no
fixed deposits. There is zero interest on demand deposits. Demand deposits mean money in the savings
* A Bank should be allowed to handle any number of accounts through its branches. But the total digital
money in these accounts should not exceed 18 times the value of bank’s capital money. So the number of
accounts a bank handles through its branches depends upon the total digital money in all these accounts. It
can increase the number of accounts until the cumulative digital money in all its customers’ accounts
reaches 18 times the value of the bank’s capital money. For example if a bank has Rs. 1000 crore has its
capital money, the total money it should be allowed to handle from all its customers’ accounts is 18,000
crore rupees. The total money in all customers’ accounts handled by all branches of a bank should not be
more than 18 times the value of the bank’s capital money. If the bank wants to handle more number of
accounts with more money supply it will have to increase its capital money.
* Banks should be allowed to generate loan money up to the 47.37% of the value of total digital money in all
customers’ accounts it handles + its own capital money in digital and physical form. The loans sanctioned by
bank should not be more than 47.37% of total money in all customers’ accounts it handles + its own capital
money. For example if a bank’s capital money is Rs. 1000 crore and with the maximum money handling
capacity of 18000 crores the bank’s maximum loan generating capacity is Rs 9000. That means a bank’s
maximum loans capacity with 1000 crore capital money is [47.37% of (1000 + 18000 =19000) = 9000]
* At the same time Banks should be allowed to generate loan money and sanction loans/advance to
customers up to 9 times the value of its capital money but not more than 9 times of its capital money.
That means if a bank’s initial capital money is Rs 1000 it can generate and sanction loans/advance up to Rs
9000 crores if it handles Rs 18000 crore in all its customers’ accounts.
* So a bank’s loan generating capacity depends on two factors 1] its capital money 2] it total money handles.
[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 supply 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
generation 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 with increase of
*A bank’s loan money generation 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. The bank should not lend its
capital money and it should remain in its own bank account. It should be remained stationery in the bank
account or its branch accounts as long as it runs the banking business. But he promoters or owners shall be
allowed to withdraw profits, if any, over this initial capital money at their own choice.
* Whenever branch issues its loans/advances to customers the loan amount generated by a bank increases
and whenever a customer repays loans the bank’s generated loans decrease. The total loans generated by a
bank should be within the two limits as prescribed above.
* The interest on the loans, when paid by a customer, should be added to bank’s capital money. When
customers pay interests the bank’s capital increases. Bank’s profits will also increase when customers pay
user charges for different services the bank provides. When bank pays salaries or spends towards operating
cost its capital decreases. Bank’s capital money minus its initial capital money = bank’s profits.
* A bank’s profits include the total interest paid by its customers and the service charges paid for different
services it provides minus its operating cost.
* A bank’s income from interest payments alone would be as follows.
1] When Bank’s own capital money = Rs 1000 Crores
If total money in all its customers’ account = 0
Then the bank’s maximum loan generating capacity = 47.37% of 1000 = 473 crores
The bank’s annual income from interest alone = 3.5% of 473 = 16.5 crores per annum [excluding user charges
+ service charges]
2] When a bank’s own capital money = Rs 1000
If total money in all its customers’ accounts at the bank’s maximum money handling capacity = RS.18000
The bank’s total loan generating capacity at maximum level = 47.37% of [1000 + 18000 =19000] = Rs 9000
The bank’s income at the maximum loan generating capacity = 3.5% of 9000 = 315 crore
So with Rs 1000 as capital money, a bank can earn income up to 315 per annum at the maximum loan
generating capacity of Rs.9, 000 crores which is possible at the maximum money handling capacity of 18,000
crores in all its customers’ accounts. In addition to this income there will be income from service charges and
user charges paid by customers for different services.
The total bank profits = the income accrued from interest and user charges – bank’s operating cost.
*When the bank starts the business it has to exchange 0.6% of its digital capital money with physical money
at the Central Bank. Now the newly started bank’s capital money will be in 99.4% digital money and 0.6% in
*The central bank’s physical money decreases by that amount and its Digital money increases by the same
amount when the new bank transfers its capital digital money to the Central bank’s digital money.
When the newly started bank opens branches it has to transfer sufficient amount of its digital capital money
and physical capital money into new branches’ accounts to start the business
* The bank shall be allowed to operate any number of branches.
* Some portion of this bank capital money [physical and digital money] shall be transferred to its branch
accounts to exchange cash with digital money with customers.
*When a customer withdraws money at the branch or its ATM, the digital money in the customer’s account
decreases, and the digital money in the branch account increases while branch’s physical money decreases -
When a customer deposits physical money at the branch, the digital money in the customer’s account
increases and the digital money at the branch account decreases and its physical money increases
*At all times the capital money [digital + physical] at bank branches should remain the same. The
expenditure cost of all branches should be paid from the bank’s capital money. The bank’s capital money in
its account and [digital money + physical money] in all its branches’ accounts is the total bank’s capital
* Interest payments on loans, user charges service charges should be added to the bank capital.
Bank’s initial capital increases when interest payments, user charges and services charges are added to the
bank capital. The bank capital decreases when banks spend money towards salaries, stationery, rents etc.
* From time to time the bank shall transfer its capital money to branches if necessary for smooth functioning
of the branches.
*Bank’s capital money should be used for exchange of digital money or physical money with customers and
paying for running expenditure.
* The customer can change the host bank for his account at any time if he has not taken any loans from the
bank. If he has taken loans, he has to repay all loans to the present host bank before he shifts his account to
the new host bank. If the new bank agrees to take all customers’ loans from the present host account to its
account then the customer can shift his account to the new host bank without repaying the loans to the
present host bank.
* Each bank shall handle on an average 2,000 accounts. India need 5,00,000 branches. There shall be many
banks which will run banking business through thousands of braches. Every citizen should have a bank
account and it should be made compulsory. Each bank branch will have an ATM at its own premises. Total
number of ATMs =Total number of Bank branches. Money will be put in the ATM machines by bank
branches. So No third party or agencies are required to deposit cash in the ATMs.
Money types and money supply in banking system
Total money supply
Physical money -0.6% Digital Money- 99.4%
money in banks
Digital money = <
digital money = >
Banks’ total capital money
Real Money =
Money types, percentages and Volume of money supply in new expanded banking system
Total money supply = total digital money 99.4% + total physical money [0.6%]
Total physical money = Physical money in banks + physical money at the public
Total digital money = customer digital money < 94.5% + Bank capital digital money > 5.5%
Banks Total capital money = Banks’ capital digital money + Banks’ physical money
Total money supply = Banks total capita money + customer digital money
Customer digital money = Loans generated by banks < 47.37% + Real money 52.63%
Real money = Total money supply – Loans generated by banks
Bank’s capital money should be more than 11.11% of total loans generated by a bank
Bank’s capital money should be more than 5.55% of total digital money of all customers it handles
Total money supply varies between 0 to 0.6%
If we assume that half of the total physical money of 0.6% is at the public then the total unaccounted
money in this new banking system is just 0.3% of total money supply that is equal to 0.3% of GDP value.
Only this small 0.3% of total money supply will be unaccounted and out of the economic system. That
means 99.7 % total money supply is fully accounted and the black money will be almost gone.
Bank capital money-
1. Government should give licences to any individual or financial institution or public limited companies
which have capital investment of minimum Rs. 1000 crores.
2. This is security deposit to run banking business.
3. This deposit in Bank’s Account is bank’s capital money. It is called as fixed money or static money
because the bank should not use its capital money as long as the bank runs banking business. It should
remain untouched by the banks. The bank’s profit like interest payments on its advance, services charges,
user charges will be added it its capital money. This profit money got from interest on loans, service charges
and user charges can be used to pay salaries and towards other operating costs of that bank. Bank’s profits
are from interest payments, service charges, ownership transfer charges
There may be hundreds of banks in the country. Each bank may have thousands of branches. Each bank may
handle thousands of accounts. There should be a bank for the population of every 2500 people. For example
in India it requires 5, 00,000 bank branches. So on an average a bank will handle roughly 2000 accounts.
[Every citizen above the age of 15 years should have Main Savings Account]
All these banks are under the total control of Central Bank.
1. Total Money Supply handled by a bank branch
The money recorded in any account is called digital money. The digital money of all accounts handled by a
bank branch is total digital money it handles at a particular point of time.
The total digital money handled by a bank branch + the total physical money at the branch and in its ATM is
the total money supply handled by the bank branch at a particular point of time
The total loan money/advance given to all its customers is equal to total loan money/advances given by
that branch at a given particular point of time. Note- All these figure will continuously change at every
transactions made at the branch
2. Total Money Supply handled by a Bank
The digital money handled by all its branches and the bank’s capital money is the total digital money in
that bank at a given particular point of time.
The total digital money handled by all branches of a bank + the total physical money at all the branches and
in all ATMs + the physical money at it own chest + bank’s capital money is equal to the total money supply
handled by that bank at a particular point of time.
The loans/advances given by all the branches of a bank is the total loans/advances given by that bank at a
particular point of time.
The total money supply handled by a bank minus the total loans/advances given = the total real money
handled by that bank.
Note- All these figure will continuously change at every transaction.
The total loans/advances given by a Bank through all its branches should not be more than 47.37% (if CRR =
10%) of the total money supply the bank handles. That means the total loans/loans given by a bank
through all its branches should not be more than 90% of the total real money the bank handles. In other
words the real money handled by any bank should be at the minimum level of 52.63% total money supply
the bank handles. Note – These restrictions do not apply at the branch level.
The total loans/advance of any bank should not exceed the 9 times the value of its capital money/security
The total money supply that can a bank can handle through all its branches should not be more than 18
times the values of its capital money.
3. Money Supply at Central Bank - Total Money Supply handled by the
*The digital money handled by all banks in a country + the digital money in government account and the
Central bank’s digital money = the total digital money in that country at a particular point of time.
*The total digital money [D] handled by all banks in a country + the total physical money handled [C] by all
banks and in all ATMs + the physical money at Central bank [C1] + digital money [D1] at Central bank + digital
money in government account is equal to the total money supply in the entire country at a particular point of
time. All this money supply will be controlled and handled by Central bank.
*Loans/advances given by all banks in a country are the total loan money in the country.
*Total money supply [K] minus total Loan money = total real money in the country.
Here are the examples of A bank’s branch account, the bank account and Central Bank Account
A Bank's Branch Account module - Download this bank account module from website –
www.vijayavarma.com or www.singletax.org
– A Bank shall have many branches. The figures in Table – 1 show the total value of money supply of all
accounts a branch handles. These figures are given for example only and they are imaginary figures
Table – 1 Figures in rupees [example]
at the branch
and in ATM
Digital money of
Money of all
Money in the
10,00,000 1,00,00,000 1,10,00,000 19,10,00,000 18,00,000,00 9,23,70,000 9,96,30,0000
The above figure shows one of a bank branch’s money supply balance sheets at a particular point of
time. There may be thousands of branches a bank operates
A Bank Account Module - Table – 2 shows a bank’s cumulative money supply balance sheet of
all its branches at a particular point of time.
Figures in crores [example]
in Bank =
Money of all
and its chest
Money of all
Its Branches +
money = [B]
C = A+B
money in all
2,000 50 150 7,000 7,150 1,25,000 1,32,150
Q should be >
5.5% of D
to total loans/
R should be >
11.11 % of E
61,172 46.29% 70978 >1/18 of D >1/9 of E
The Central Bank Account Module – This is an example of central bank account. There will
be only one Central bank under which all banks operate with thousands of branches at the ratio of one
bank branch for every 2500 people in a country. The Central bank account handles the cumulative
money supply in the country assisted by many banks through thousands of branches.
Table- 3 Figures in crores [example] shows total money supply in the economic system operated by
Central Bank through all its licensed banks with lakhs of branches that are equal to one branch for every
given by all
Money of all
All banks =
Money [digital +
Physical] of all
= A2 + B2
money in all customer
accounts in all
of all banks in the
country = D
5000 200000 4,00,000 36,48,513 45000 4,45,000 74,85,000
K = A1+A2+
F = K - E
% to total
> 5.5 % of D
R should be
81,35,000 44,86,487 $100000 44.84% 1/16.8 1/8.2
* The minimum capital to run banking business should be Rs 1000 Crore.
1. The bank can generate loan money up to 47.37% value of total digital money it handles in all accounts
through all its branches.
2. The total loans/advance should not exceed 9 times the values of its own capital money
3. The total digital money in all customers’ accounts it handles should not exceed 18 times the value of the
bank’s capital money.
4. The total digital money in all customers’ accounts + the total bank capital money [digital money and
physical money] = the total money supply it handles
5. Bank’s capital money should not be less than 1/18 times the value of the total digital money in all its
customers’ accounts it handles. It should not be less than 1/9 times the total loans it generated.
6. The total money supply – total loans generated = Real Money
7. The real money should always be more than 52.37% total money supply a bank handles
8. The generated loan money /advances will be added to the customers’ digital money and money supply
increases. When bank generates money the money supply increase
9. When customer repays loans the loan generated by a bank decreases and money supply decreases.
10. The interest paid will be added to bank’s capital money and it increases. Money supply remains the same
when interests on loans are paid.
*Each customer should be allowed to withdraw only Rs 5,000 per month from his/her savings account even
though he/she has huge amount of money in his/her savings account. The customer has to spend his/her
remaining earning through debit card, cheque or online money transfers. The monthly withdrawal limit in
cash should be Rs. 5000 per month.
*Total physical money of a Bank = total money in its own chest and at all its branches and ATMs
Bank capital money = It’s initial capital amount + profits if any
Total digital money = Total digital money in all customers’ accounts handled by all branches and bank’s own
digital capital money.
Total loan money = Total loan money given by all its branches. The total loans/advances should not be more
than 90% of the total real money in all accounts it handles and it should not be more than
47.37% of total money supply in that bank. Total real money = Total money supply - Total loan money.
Total number of ATMs =Total number of Bank branches. There should be a bank branch for every 2500
people. Each bank branch will have an ATM at its own premises. Money will be put in the ATM machines by
bank branches. So No third party or agencies are required to deposit cash in the ATMs.
The money supply change at every transaction that takes place at a branch or at a bank
or at the Central bank [From above tables] Money changes Module
Download money changes modules from website - www.vijayavarma.com
When a customer deposits physical money in his/her account at a bank
The digital money D increases in his/her MSA/SSA account
The digital money at bank branch decreases
The physical money at branch increases
The values of K and F increase at bank branch
The values of A,D, K, F in Bank account increase, the values of B, L in bank account decrease
The values of A2, D, K, and F increase at Central Bank, the values of B2, L decreases at Central Bank
Function – 2
When a person withdraws money from ATM or at a bank branch
Digital Money D decreases in his/her MSA/SSA account
Digital money B increases at branch account
Physical money A at bank branch decreases
The values of B, L increase in Bank account, the values of A, D, K, F decrease in Bank account
The values of B2, L increase in Central Bank account, the values of A2, D, K, and F decrease in Central Bank
When money transfers from one account to another account through online transfer, debit
card or cheque - Intra bank transfer
The digital money in the in the D transferor account decreases, an additional 4% [TOP TAX] of this amount
from transferor account will be transferred to Central and State bank combined Account and its Digital
The digital money in the transferee account increases
The values of D, F in branch account decrease
The values of L increases in Bank account, the values of D, K, and F decrease in Bank account
When money transfers from one account to another account through online transfer, debit
card or cheque – Inter-bank transfer
The digital money in the in the transferor account decreases, and additional 4% [TOP TAX] of this amount
from transferor account will be transferred to Central and State bank Account and its Digital money
The values of D, F, and K decrease in transferor branch and bank accounts and L increase
The values of D, F, and K increase in transferee branch and bank accounts and L decrease
Function 5 - When a customer shifts his account with some digital money in his account [Note- Savings
accounts in this new banking system are portable accounts with same account numbers] from one branch to
another branch of the same Bank [intra bank savings account transfer] – The values of D, K, F decrease in the
present branch account. The values of D, K, and F increase in the new host bank branch
Function 5 A - When a customer shifts his account [Note- Savings accounts in this new banking system
are portable accounts with same account numbers] from one branch to another branch of the different Bank
[inter - bank savings account transfer]
The customer can change the host bank for his account any time if he has not taken any loans from the bank.
If he has taken loans from the present host bank, he has to repay all loans before he shifts his account to the
new host bank. If the new bank agrees to take all customers’ loans from the present host account to its
account then the customer can shift his account to the new host bank without repaying the loans to the
present host bank.
Function 5 B When a customer shifts his account without loans in his account
The values of D, K, and F decrease in the present host branch.
The values of D, K, and F decrease in the present host bank
The values of L and Q increase in the present host bank
The values of D, K, and F increase in the new host branch
The values of D, K, and F increase in the new host bank
The values of L and Q decrease in the new host bank
Function 5 C When a customer shifts his account with some digital money in his account and with all
loans in his account if the host bank agrees to take all loans
The values of D, K, and E decrease in the present host branch account and its bank account
The value of Q and R increases in the present host bank account
The value of F decreases when customer’s digital money D is > customer’s Loans
The value of F increases when customer’s digital money D is < customer’s Loans
The value of L increases when customer’s D is > customer’s loans in the present host bank account
The values of L decreases when customer’s D is < customer’s loans in the present host bank account
The values of D, K, and E increase in the new host branch and in the new host bank
The value Q and R decreases in the new host bank account
The value of F increases when customer’s digital money D is > customer’s Loans
The value of F decreases when customer’s digital money D is < customer’s Loans
The value of L decrease when customer’s D is > customer’s loans in the new host bank account
The values of L increase when customer’s D is < customer’s loans in the new host bank account
When bank gives loans
The customer digital money increase
The values of D, E, and K increase at bank branch
The values of D, K, E, and L increase in Bank account, the values of Q, R decrease
The values of D, K, E, and L increase in Central Bank Account, the values of Q, R decrease
When loans [principle] amount are repaid
The customer digital money decrease
The values of D, E, and K decrease at bank branch
The values of D, K, and L decrease in Bank account, the values of Q, R increase
The values of D, K, E, and L decrease in Central Bank account, the values of Q, R increase
Function 6 A
When interest on loans are paid
The digital money in customer account decrease
The values of B and C increase in branch account, the values of D decrease
The values of B, C, P, Q, and R increase in Bank account, the value of D decrease
The values of B2, C, Q, R increase in Central Bank account, the value of D decrease
Function 7 A - The user charges, services charges on registrations and ownership transfer rights for
movable and immovable properties like lands, plots, flats, vehicles, gold shares etc. will be added to bank’
capital money. The bank’s capital money increase whenever the above charges are paid and added to bank’s
capital money decreases whenever banks pay salaries and other operating expenses
The values of B and C increase in branch account, the values of D decrease
The values of B, C, P, Q, and R increase in Bank account, the value of D decrease
The values of B2, C, Q, R increase in Central Bank account, the value of D decrease
Function 7 B
When bank spends money towards salaries, rents, stationery etc.
The amount in its capital decreases.
The digital amounts in recipients’ MSAs/SSAs - D increase.
The values of B and C decrease in branch account, the values of D increase
The values of B, C, P, Q, and R decrease in Bank account, the value of D increase
The values of B2, C, Q, R decrease in Central Bank account, the value of D Increase
There will be no changes in the Central bank account
When payments are made to the foreign accounts
A] The digital amount D in MSA/SSA of transferor decreases.
B] The values of D and F decreases in branch’s account, the values of D, F and K will decrease in the bank’s
account, the values of C, D and H in central bank account decreases, the value of B1 in central bank account
When foreign remittances come to India
The value Foreign exchange [H] in central bank account increases
A] The digital money D in customer account increases.
B] The values of D and F increases in branch’s account, the values of D, F and K will increase in the bank’s
account, the values of C and H in central bank account increases, the value of B1 in central bank account
decrease and the value of D in Central bank increase
Note – There should be Central bank branches at all international airports. All incoming passengers should
deposit the foreign currency dollars, Euros etc., brought with them from abroad, in the banks at the airport
before they leave out of airport. The equalling value of Indian currency will be credited to their MSA’s
Carrying and holding of any foreign currency anywhere in India outside the premises international airports
should be banned.
When Indian currency goes out of country while imports or foreign tours or foreign investments
The value Foreign exchange [H] in central bank account decreases
The value of digital money [B1] at Central Bank increases, the total digital money of all banks [D] recorded at
Central Bank decreases. But Total money supply [K] recorded in the Central Bank remains the same.
The amount in MSA/SSA of account holder, who imports or need foreign exchange for various reasons
The values of [D] and [F] will decrease in branch’s account; the values of [D], [F] and [K] will decrease in the
bank’s account. The loan percentage to money supply in that bank increases.
Note – There should be Central bank branches at all international airports. All outgoing passengers, who go
abroad and need foreign exchange, can take dollars or Euros from bank branches at the airport. The
equalling value of Indian currency will be debited from their MSA’s
Note - Carrying and holding of any foreign currency anywhere in India outside the premises international
airports should be banned.
Every year, additional real money equalling 52.63% of the value of the growth in the GDP, should be added
to the Government account (out of thin air) at the time budget presentation to check deflation and
recession. The additional money that should be added every year = 52.63% x [value of GDP of present year -
the value of GDP of previous year]. That means there will be fresh real money originated from Government
account every year that is equal to the value of 52.63% of growth rate of GDP.
99.4% of this additional money shall be added as digital money directly into the Central Government account
0.6% of this additional money shall be added in the form of physical money as Rs 10, Rs 20 and Rs 30 in
currency notes and Rs. 5, Rs, 2 Rs 1 coins
This physical money should be deposited in the chests of Central Bank.
When additional money is added to Government account or Central bank account real money [F] and total
money supply [K] increases
When government spends money through social welfare schemes and investment infrastructure projects
this additional money will mingle in the existing money supply
The money in MSAs, SSAs and CANs increases
The value of digital money [D] and Total real money [F] at branch account increase [table -1]
The percentage of loan money to the real money [F] decreases
The values of digital money [D] and Total real money [F] and total money supply [K] of bank account will
increase [table -2]
The values of total digital money [D] real money [F] and money supply [K] increase at Central Bank
The value of [C] at Central bank increase
When fresh money is printed it first should be added to the Central bank’s chests.
A] The value of C1 and K increases in central bank account
When bank need physical money, then the equalling digital money from its Capital [M] should be transferred
to Central bank. The physical money from the chest of Central Bank will be released to the bank which
transferred digital money to the central bank
B] Then the values of C1 decreases and the values of D1 increases in Central bank account
C] The value of C increases in Bank’s account and the values of Bank’s M decreases. But the total money
supply [K], in the bank will remain the same. The physical money can also interchanged between the
different banks with digital money.
Note- Every bank branch should have its own ATM in its bank’s premises. At the ratio of one bank branch
for every 2500 people there would be 500000 lakh bank branches and ATMs in the country. That means
there would be a bank branch and ATM in every village and a colony in urban areas. So there would be no
need to maintain separate ATMs outside bank branch premises. This branch should maintain money in its
own ATM. The deposited money at the branch should be used to cash withdrawals and money
replenishment in the ATM. If there is shortage of money at any bank branch, its head bank should adjust
money to all its branches. No third party should be given job of putting money in the ATM’s.
Ultimate Tax Reforms can be achieved through liberalised banking sector- With liberalised banking
license banking services can be expanded at the ratio of one branch for every 2,500 people
and all citizens are given Main Savings Accounts
The Main Savings Account in the expanded banking system will help Government abolish all Direct and
Indirect taxes accompanied by tax laws, accounting, auditing and tax returns. Ultimate Tax reforms will
relieve 7 billion people of the world from the cobweb of ambiguous and complex tax structures, plethora of
tax laws, mandatory and cumbersome accounting, auditing, tax returns and consequent quagmire of all tax
related cases. Download the Main Savings Account module
The working modules for expanded banking system are available on
websites to download www.vijayavarma.com
The liberalised license policy is for the purpose of providing a banking service for every
citizen of the country.
* 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 57 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.
Multi dimentional Main Savings Account - It is the main keel of this
restructured banking. Download the module of Main Savings Account from the website
www.vijayavarma.com or www.singletax.org
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 used for buying, selling and holding properties rights of movable properties like vehicles, gold
4. It can 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.
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
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 up to his/her death.
5. No non-performing assets [NPA]
6. Loans can be sanctioned within 5 minutes without need for documents, encumbrance certificates, legal
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 more or less constant. Expansion and contraction of money
supply according to the demand is automatic in this new banking system.
11. Total values of money supply, physical money, digital money, loans/advances, Real money Banks’
capital money 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. The physical currency will be Rs. 30, Rs.20, Rs. 10 notes and Rs 5, Rs, 2 and Rs. 1
coins only. The high value currency notes Rs. 1000, Rs. 500, Rs. 100 and Rs 30 should be demonetised.
13. By using this restructured banking system, single phase voting on single day can be held throughout
the country with help of banking sector. 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. These voter lists get updated 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 30, Rs. 20, and Rs. 10 notes apart from Rs. 5
Rs. 2 and Rs. 1 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
Advantages of Main 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
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
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. India need 5,00,000 fully fledged bank branches. Each bank
shall handle approximately 2000 accounts on average.
* Banking licence should be fully liberalised.
In this new banking system there will be three types of accounts. The three types of bank
accounts are called 1 Main Savings Account 2 Sub Savings Account [SSA] and 3 Corporate
* Every bank branch 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 servers
maintained by the Central Bank. 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.
* The servers 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. All
new babies born are to be are recorded in their mothers’ personal account in her Main Savings Account
within three months of their birth. In case of orphans they should be recorded in Government’s social
welfare ministry account. Once they get the age of 12 years the banks generate their Main Savings Account
with the digital recording of their finger print images and iris data. After the initial launch of this system there
should be no generation of Main Savings Accounts for individual who are not recorded at the time of their
birth either in their mothers Main Savings Account or Government’s social welfare ministries’ account.
* 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 combination 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 12 years will be given the
Main Savings Account numbers. It should be mandatory for every citizen above the age of 12 years to have
Main Saving Account. Children below the age of 12 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 12 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 12 years of age as decided by the Government. A person’s Main Savings
Account will become operational and start functioning from the age of 12 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.
Main Savings Account
Land Savings Account [lands, plots, flats, commercial
establishments, buildings, houses etc., ]
Vehicles Account [vehicles, gold]
Shares Account [SA]
Personal Account [family, passport, education certificates, ration card
The 15 digit Main Savings Account number will act as money savings account, movable property account,
immovable properties account, shares account, citizenship card, taxpaying account, ration card, Pass port
and voter identity card.
An example of Main Savings Account number –
The first two digits from left side 21 indicate the day, the next two digits 08 indicate the month and the next
three digits 011 indicate the year when the Main Savings Account is issued to the person or his/her birth
year. Although this account number is given and registered in the mother’s Main Savings Account within
three months of the child’s birth, it will be activated and become into live account at the age of 12 or 15
years as decided by the Government. A person’s Main Savings Account will become operational and start
functioning from the age of 12 or 15 years. In the case of orphans the account numbers will be registered in
the social welfare ministry’s account and it should be made mandatory for State Government to look after
every orphan’s care till he reaches 20 years and until he/she gets employment. That means there will be no
street children and child labour.
The eighth and ninth digits from the left side  denote the main savings account. It is common for all Main
Savings Accounts. The last six digits 456789 are serial numbers of the Main Savings Accounts. That means on
each day the nine digits from the left side will remain same. The last six digits from right side will be from
000001 to 999999. The person can choose his/her Main Savings Account number from the available
numbers. With the change of date, month and year the last six digit serial numbers will repeat. For every 999
years the 15 digit Main Savings Account numbers will repeat once again. Once taken/given, the Main Savings
Account number is permanent for his/her entire life. From then he/she can choose any bank to maintain and
operate his/her MSA. As said earlier MSA is portable bank account. The MSA will contain 5 sections/sub
accounts. A person’s money, immovable properties, movable properties, shares and family details will be
maintained in different sections/sub accounts of a person’s Main Savings Account. The 5 sub account
numbers of Main Savings account are same except the ninth digit. If the ninth digit is 1, it is money account.
210801101456789 This number implies that 21-08-011-01-456789
If the ninth digit is 2, it is immovable property account.
If the ninth digit is 3, it is movable properties account.
If the ninth digit is 4, it is shares account.
If the ninth digit is 5, it is family account.
The overview of a Main Savings Account click here to download
Main Savings Account
210801101456789 Main Savings Account /MSA
210801102456789 Immovable properties/
Land Savings Account
210801103456789 Vehicles Account
[MPA] movable properties
210801104456789 Shares Account (SA)
210801105456789 Personal Account (FA)
The user name, profile pass word, logs in password and transaction password are same for all these sub
accounts of a person’s Main Savings Account. Thus the Main Savings Account is a multi dimensional and
multi functional single savings account for storing/using money, for buying/selling of shares, movable and
immovable properties, for direct receiving of subsidies, pensions, relief funds, rations, scholarships etc., from
the Government. The main functions of Main Savings Account are
* Money account is just like the present savings account where money will be stored and used. Money in
flows (credits) and money out flows (debits) will be recorded in this account. Money can be used or spent
through cheques, debit cards, credit cards, demand drafts and online transfers only. There will be no pay
orders and other means of conveyance for money. Money flows will be only in five forms.
* Buying, selling or mortgaging of immovable properties like lands, plots, flats, house, commercial
establishments etc., will be recorded in land savings account (LSA) of his/her MSA, which is managed by
banks. Purchases and selling of immovable properties will be done through this account by banks.
*Buying, selling and mortgaging of movable properties like vehicles and gold will be recorded in the
movable properties account (MPA) of his/her MSA.
* Buying or selling of shares will be recorded in the shares account (SA).
* A person’s personal account is used as a ration card, citizenship card, voter card, passport, driving license,
hall ticket for all exams, CV and insurance policy.
[B] Sub Savings Account (SSA)
Every citizen would be allowed to open any number of Sub Savings Accounts (SSA) by using the same MSA
number, if he/she wishes to operate business or industry. He/she can also use his/her MSA to operate any
business or industry. If he/she runs many industries or business activities, then he/she can open Sub Savings
Accounts to run these industries or business centres in multiple places in the country. These Sub Savings
Account numbers are also portable. People can change the banks to operate their Sub Savings Accounts at
any time. Usually people, who run business or industry, will need Sub Savings Accounts. Generally 10%
(approximately) of total population of any country, who run business or industries will need Sub Savings
Accounts. Even individuals who do not run business or industry shall be allowed to open Sub Savings
Accounts. In Sub Savings Accounts only money will be managed by banks.
An example of Sub Savings Account number
210801110456789 - The Sub Savings Account number of a person is same as of his/her Main Savings
Account except the eighth and the ninth digits from left side. He/she can choose Sub Savings Account
numbers from 10 to 99. The remaining 13 digits will remain the same as of his/her Main Savings Account
number. That means the Sub Savings Accounts of a person are offshoots from his/her Main Savings Account.
He/she can open up to 89 Sub Savings Accounts to run multiple industries or business activities located at
different locations. If he/she needs more than 89 accounts then he/she will have to take Corporate Account
numbers. These Sub Savings Accounts will be used to maintain money only.
The Sub Savings Accounts (SSA) and also the Main Savings Accounts (MSA) can be used for running business,
industry, schools, colleges, hospitals, hotels, restaurants, construction, studios, services, or any other type of
business. Just like MSA, the SSA can also be used to receive or pay salaries, professional fees, service fees,
remunerations, donations loans etc,
210801110456789 –This number implies that 21-08-011-10-456789 [date-month-year-SSA-
[C] Corporate Account Numbers (CAN)
Corporate account is a seven layer account – it is seven layer accounts for 1] money operation, 2]
immovable property account 3] movable property account 4] shares account 5] man power account 6] raw
materials account 7] finished products account
Under proposed TOP Tax system the accounting and auditing of the corporate or public companies
will be mandatory and compulsory as in the present system for protecting the interests of the investors.
Corporate or public companies, which issued share to public, will be given Corporate Account Numbers
An example of Corporate Account number
The first three digits from left side are zeroes in all Corporate Account Numbers. The next two digits 08
indicate month and the next three digits 011 indicate the year of the account number taken. The eighth and
the ninth digits 01 indicate the industry or sector codes. The next three digits 001 indicate the product code
and last three digits 345 are serial numbers of industries registered in the same month. In the same month,
Corporate account number - Finance account
Immovable property account- 100801101001345
Movable property account-200801101001345
Shares account -300801101001345
Man power account [employees] - 400801101001345
Raw materials account -500801101001345
Finished products account- 600801101001345
the last three digits will repeat many times [possible 99,999 times if need] for different sectors/industries
and for different products. 0008011101001345 This number implies that 00-08-011-01-001-345 [00-month-
year-industry code-product code-serial number]
000801101001345 Money Account
100801101001345 Immovable properties/
Land savings account (LSA)
200801101001345 Movable properties account
300801101001345 Shares account (SA)
400801101001345 Man power account
500801101001345 Raw materials account
600801101001345 Finished products account
The corporate or public companies will have to operate all cash transactions through the Corporate
Account Number (CAN) only.
An example of Central Government account number
In all Central Government accounts the first six digits 222222 from left side are twos. The next two digits 01
indicate ministry code. The next three digits 001 indicate department or institution code and the last four
digits 3456 indicate serial numbers.
An example of State Government account number
In all State Government accounts the first four digits 3333 from left side are threes. The next two digits 01
indicate State code. From 01 to 99 the numbers are State codes. The next two digits 01 indicate ministry
codes. The next three digits 001 indicate department or institution codes and the last four digits 3456
indicate serial numbers.
An example of Bank [Financial institution] account number
456789 is the bank [Financial institution] account number and 000001 is one of its
branch code numbers.
For all bank accounts the first three digits are 999. The last five digits 456789 are bank account numbers. The
banks can choose their account numbers available at the time of registration from 000001 to 999999. The
middle six digits 000001 are that particular banks’ branch code numbers. The bank can allot any code
numbers from 000001 to 999999 to each of its branches.
Banks [financial institutions] operate MSAs, SSAs and CANs as long as the account holders want. But they
would not own these accounts. These accounts are portable and can be shifted from any bank to any bank at
Non Government organisation account numbers start with four 4’s 444400000000000
Educational institutions numbers start with four 5’s 555500000000000
Health care service institutions’ account number start with four 6’s 666600000000000
Trusts’ account numbers start with four 7’s 777700000000000
Usage of MSAs, SSAs and CANs:-
In the present economic system a person’s or a company’s money, movable or immovable
properties(like vehicles, plots, flats, houses, factories, commercial establishments, lands etc.,) shares, family
tree, insurance policies and all other assets are recorded, managed and handled by different departments,
agencies or institutions.
But in the suggested TOP Tax system each individual above the age of 12 years will have one Main
Savings Account consisting of five folders. Money, movable or immovable properties (like vehicles, plots,
flats, houses, commercial establishments, lands etc.,) shares, family tree, insurance policies etc., are
recorded, managed and handled in a single account called Main Savings Account (MSA) with five sub
accounts in case of individuals and in Corporate Account Numbers (CAN) with seven sub accounts in case of
companies which issued shares for public. These accounts namely, MSAs, SSAs and CANs will be
maintained and operated by banks replacing different departments, tax collection and tax enforcement
boards, agencies or institutions of the present economic system.
Thus people’s money, shares, all movable and immovable properties will be in only one account (MSA) with
different folders operated by banks.
1. Main Savings Account (MSA) - There will be only one compulsory and mandatory MSA for
each person given by the Government. This MSA will have five sub accounts for each specific purpose of an
The first sub account (Money account) will be used for storage and usage of money got through
savings/earnings/incomes/donations. This MSA can also be used to run or operate any business or industry
owned wholly by an individual.
The second sub account Land Savings Account shall be used for registration, storage and usage of
ownership rights of all immovable properties like lands, flats, plots, commercial establishments, and
etcetera. The ownership rights of these assets will be transferred from one person’s LSA to another person’s
LSA while purchasing/selling/donating of these immovable properties.
Vivid explanation: - Land Savings Account/LSA In this suggested TOP Tax system the Land
Savings Account of each person shall be utilised as the de-mat account of that person’s ownership rights of
immovable properties like lands, plots, flats, assets, factories and other establishments in the entire country.
While purchasing or selling, the transfer of ownership rights of these assets/properties from one person to
another person shall be made from one person’s LSA to another person’s LSA through banks/service centres.
So the transfer of assets like lands, plots, flats, structures and other establishments will take place in physical
form upon the transfer of ownership right of that asset in digital form from one LSA (seller) to another LSA
(buyer). TOP Tax system suggests that total land record of the country should be dematerialised according to
extent, location, mapping and ownership. The land belongs to people will be recorded in their respective
LSAs. Similarly the land that belongs to Government, Government organisations, companies should be
recorded in their respective accounts.
Repeat;- Under the TOP tax system the purchase of lands, plots, flats or other properties should be
made through Land Savings Account (LCA), the sub account of Main Savings Account (MSA) operated by
banks. If any person buys land, plot, flat or any other property anywhere in India the extent and nature of
the property will be credited in his Land Savings Account and the same property will be debited from the
seller’ Land Savings Account (LSA). Whenever he/she sells any property that is credited in his LSA, the same
will be debited from his/her Land Savings Account and the same property will be credited in the buyer’s Land
Savings Account (LSA). The credit in the LSA means purchase of immovable property and debit means selling
of immovable property. The immovable properties will be in dematerialised form and the ownership rights
can be transferred from one account to another account just like money transfers and shares. Just like shares
there will be no paper documents for properties. Unlike cash transfers the buyer’s presence and
signature/authentication shall also be needed for any property transaction. A bank statement of the second
folder (LSA) of any person’s Main Savings Account will hold the entire ownership rights of that person’s all
immovable properties in the entire country. The People can get these bank statements of their properties at
any time at banks in addition to weekly, monthly or yearly statements by post or e-mails or both. They will
get phone messages and email statements immediately after each property transfer.
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
Advantages of Land Savings Account/LSA:-
1. Land ceiling act
In the present system rich people are having huge tracts of agriculture lands in different districts and States
making mockery of the land ceiling act. The registrations of lands, flats, plots and other properties are being
made by the registration departments and land records are maintained by revenue departments.
In the TOP Tax system land ceiling act can be strictly enforced on individuals and no individual can have more
than 20 acres of land in the entire country. Every individual will have only one Main Savings Account
consisting of separate sub account called Land Savings Account for all immovable properties like lands, plots,
flats, etc., All immovable properties, situated wherever in the country, along with all details of Survey
numbers, boundaries, description, nature, map, geo location, village, district, state, extent and date of
selling/buying of each property of each person will be recorded and maintained in Land Savings Account
The Land Savings Account will be operated and maintained by banks just like money savings accounts. Debits
and Credits of all properties will be made in the Land Savings Account while a person buys or sells his
property. The total extent of land recorded in all Land Savings Accounts belonging to people, Governments,
departments, organisations, companies, institutions etc., will remain exactly the same even after countless
number of debits and credits each day. The Land Savings Account will show an individual’s exact ownership
rights of his/her all immovable properties. The total land extent in each Land Savings Account will never
cross the upper limit of 20 acres (as envisaged in TOP Tax system) strictly adhering to land ceiling act. There
can be absolutely no multiple selling of same property to different people. It will become impossible for any
individual to own huge extent of lands (beyond land ceiling act) under different names in different locations
of the country. TOP Tax system ensures that the land ceiling act can be implemented in totality to perfection
making Government’s task easier in pushing forward land reforms and allocating land to landless poor.
There will be no paper documents for all movable and immovable properties. Hence no separate registration
and revenues departments are needed in the suggested TOP Tax system. Only land survey department would
suffice to mark and clear boundary disputes.
2. Farm subsidies; - In present system 90% of total farm subsidies are being gobbled up by rich farmers
(10%), while the small and marginal farmers (90%) are getting only 10% of total farm subsidies. This anomaly
can be totally checked in TOP Tax system where Land Savings Account is a sub account of Main Savings
Account operated by banks. According to records in Land Savings Accounts, the total farm subsidies (100%)
would reach the small and marginal farmers while keeping away rich farmers from all subsidies. Here rich
farmers means industrialists, contractors, professionals, celebrities, individuals, politicians, business class,
salaried class (govt or private) etc., whose annual incomes are more than 2,00, 000 (other than agriculture
3. Farm loans; - In the present system getting farm loans by farmers is cumbersome, laborious, time
consuming and bribery ridden exercise. Farmers need to go from one department to another department to
get land documents, evaluation and encumbrance certificates, revenue certificates etc., after paying heavy
bribes. Farmers are being forced to take loans from private lenders who charge high interest rates.
But Land Savings Account will make money borrowing by farmers from banks so much easy, instant, smooth,
timely and time saving exercise. By using Land Savings Accounts the branch managers can sanction farm
loans instantly based on land records in the LCAs.
4. Interest rates on farm loans
In the suggested TOP Tax system the interest rates on farm loans, up to Rs.10, 000, 00, will be only 3% per
annum and 4% per annum beyond Rs. 10,000,00.
5. Land acquisition and compensation;- If an individual or company acquires land of more than 20
acres of land for industry, studios, real estate or any other purpose, land tax of 10,000 per acre per annum
needs to be levied. If land is acquired for SEZs the farmers should be paid not only the market price of the
land but also Rs 1,000 per acre per month for rest of his/her life and thereafter to his/her legal heir. It is
easier for local panchayats, municipalities, corporation to collect house tax, vacant plot/land tax and
properties tax as all the details of a person’s properties are recorded in his/her Land Savings Account (LSA).
6. Land transfer/registration/stamp duty;- Under the “TOP Tax system” there will be no stamp duties
on all immovable properties The registration charges for purchasing any property i.e. land, plot, flat, house
or other commercial establishments will be same and equal all over India irrespective of the place and
market value of property. The registration charges would be only Rs. 1,000 per acre, Rs. 1,000 per 300
square yards of plot or Rs 1,000 per 1000 square feet of flat and multiples thereof. These registrations of
land transfers can be made in any bank and anywhere in India. It is needless to say that the loss of stamp
duties would be compensated by the “TOP Tax” which is compulsory on any money transfers. If a person
buys a property (land, plot, flat, house, commercial establishment) for Rs. 10 lakhs, a TOP tax of Rs. 40,000
will be deducted from his MSA or SSA while transferring the cash to the sellers account. If he/she buys the
same property for Rs. 1 crore the deducted TOP tax will be Rs. 4 lakhs. In the case a person transfers a
property as a gift to his/her son/daughter or any other person, trust or organisation the TOP tax deducted
will be nil as there is no cash transfer made. That means there will be no need for separate registration and
revenue departments for registrations and handling of all immovable properties.
The third sub account of MSA Vehicles Account) shall be utilised for ownership rights of all
movable properties like vehicles, gold, jewellery, and etcetera. The ownership rights of these properties will
be transferred from one person’s MSA (manufacturer, dealer, and seller) to another person’s MSA while
purchase/sale/donation of these movable properties. The ownership records will contain the vehicle’s
model, manufacturing date, engine number, chassis number, registration number, fitness certificate etc. The
ownership rights of all vehicles will be transferred from one MSA belonging to
manufacturer/importer/dealer/retailer, or other citizen to the buyer’s account through online just like
money transfers in the present system. In the TOP Tax system people will not need to have separate vehicle
registration certificates, fitness certificates, and insurance certificates for each vehicle he/she owns. The
bank statement of the third folder of his/her MSA, which contains the owning record of all his/her vehicles,
will suffice for all his/her vehicles. That means the bank statement of the sub account (MPA) of any
person’s Main Savings Account will hold the entire ownership rights of that person’s all movable
properties. Furthermore there will be no need to have separate RTO departments for registration and
checking of vehicles in the TOP Tax system. The traffic police department will suffice to oversee all vehicles in
promptly paying the road taxes and insurance premiums regularly. The data on payment of road taxes
collected from banks will ensure that the checking authorities can stop only the non tax- paying vehicles
leaving the tax paid vehicles unstopped on the highways.
Similarly the gold in the entire country, owned by people, importers, dealers, sellers, Governments,
temples, companies, organisations, will be recorded in sub account (movable property folder/MPA) of Main
Savings Account. Upon the launching of TOP Tax system people should register the gold they own in their
third folder of their Main Savings Account within the stipulated time period of one month or more or as
decided by the Government. After this stipulated time period no individual will be allowed to register his/her
gold. From hereafter when one person buys gold the ownership rights of the bought gold in seller
(importer/dealer/retailer, or other citizen) will be transferred from his/her MSA to the buyer’s account
through online just like money transfers in the present system. So the ownership rights of gold will be
transferred from one Main Savings Account to another account (importer, dealer, seller or between people)
on each purchase or selling of gold. Gold loans will be given on the records of an individual’s gold owning in
his/her Main Savings Account (third sub account) and gold’s physical mortgage. It will not be possible either
to mortgage or sell gold without owning record in his/ her MSA. That means there will be no possibility of
stealing gold because the thief cannot sell the stolen gold without the owning record in his/her account. A
person cannot complain the theft of his/her gold more than the recorded gold in his/her account. Similarly
when law enforcement agencies raid a person’s house and find gold beyond the recorded gold in his/her
account it will be deemed as either stolen or bought from illegal means. People, who bring gold from abroad
on return, should record it in their Main Savings Account at the airport itself. The exact gold reserve owned
either by people or Governments will be known at any time. Every year the imported and locally produced
gold will be added to these reserves.
The fourth sub account Shares Account shall be utilised for storage and usage of ownership rights of
shares/stocks, bonds, derivatives etc. The ownership rights of these securities will be transferred from one
person’s MSA to another person’s MSA while buying/selling/donation. The ownership rights of shares can be
transferred from one account to another account by the bank which handles the account. The shares
account is portable and the customer can transfer his account from one bank to another bank at any time for
handling the shares.
The fifth sub account (personal account) shall be utilised for family details and called as personal account.
Marriage registration and child birth registrations will be made both in husband and wife’s family folders of
MSAs. Based on the details in the family folders, monthly rations will be computed and transferred every
month, in the form of cash, directly into the wife’s MSAs. Every child will get his/her own MSA account at
the age of 15 years. The bank statement of The fifth account (personal account) of MSA of any individual can
be utilised as income certificate, voter list, ration card driving license and passport. It can be obtained within
minutes from any bank and from anywhere in the country. People need not pay bribes to get these
certificates or documents from revenue department and passport offices. All funds allocated towards
welfare of SCs, STs and BCs can be transferred directly into the MSAs of these sections leaving no room for
leakages, bribes and misappropriation of these funds.
Vivid explanation:- All the details of a person’s occupation, educational qualifications, marriage, driving
license, passport, his/her life partners name, children and their age etc, will be recorded in fifth sub account
(personal account) of his/her Main Savings account. The parents should register their child’s details in the
data record of their Main Savings Account (MSA) within three months of their child’s birth. Once the child
gets the age of 15 years he/she will automatically get MSA. The total care and welfare of the orphans should
be taken by the State governments till the child reaches the age of 20 years. The pathetic plight of street
children and orphans will come to an end once the TOP Tax system becomes operational.
This system totally and permanently checks the ever increasing problem of illegal migration from Pakistan
and Bangladesh changing the demographic proportion of India to an unimaginable level. Once all the citizens
above the age of 15 years are given the mandatory Main Savings account (MSA) and the TOP Tax system
becomes fully operational, no adult will be given Main Savings Account (MSA) thereafter. From hereafter
every additional Main Savings Account [MSA] will be an offshoot of an existing MSA belonging to parents or
Government in case of orphans. There will be no question of additional fresh MSA without parent’s existing
MSA. Similarly existing MSAs will come to cease upon the death of individuals. All the money, shares,
movable and immovable properties recorded in the five folders of MSA of the deceased person will be
transferred to his/her legal heirs or to nominees registered in his/her MSA account. The total number of
MSAs will increase every year depending upon the growth rate of population of that country. TOP Tax
system will record; maintain every individual’s family record generation after generation. Therefore illegal
migrants from other countries cannot enter illegally into India, get Main Savings Account or Sub Savings
Accounts and assimilate in Indian population. It will be a lot easier for the government to detect terrorists
and militants who cross over from across the border to indulge in unlawful activities.
Preparation of voter lists- TOP Tax system makes the preparation of electoral roles to be very easy and
simple and instant. Fresh voter lists will be provided by banks at any time if asked by election commission.
According to the addresses recorded in the Main Savings Account the area wise voter lists can be supplied by
banks to conduct polls to panchayats, cities, districts, MLA, MP and all other polls. If by polls are to be held,
the last voter lists should be used in that particular constituency in order to stop people from other areas to
change their addresses to that by poll areas.
TOP tax system will be operated solely by banks to provide different services for the Government like
taxation, tax collection, tax enforcement; for issuing caste certificates, income certificates, voter lists,
monthly rations, subsidies, pensions, calamity relief funds, passports, licences, fees reimbursements,
scholarships etc., at absolutely free of cost. TOP Tax system, operated by banks, will also help people in
getting all the above mentioned services at single window through their MSAs with five different sub
accounts. That means TOP Tax system will replace present system’s multiple departments like Income tax
department, Central Excise department, CBDT, CBEC, Tax tribunals, passport department, census
department, States’ commercial tax departments, civil supplies departments, registration departments,
revenue departments etc., saving thousands of crores of Government’s non-plan expenditure.
2. Usage of Sub Savings Account (SSA):- Every person can open and operate as
much number of SSAs as he/she wishes. The SSA is only a money account as in the present system. This Sub
Savings Account shall be used for receiving, storage and usage of money to operate any business or industry
wholly owned by an individual.
3. Usage of Corporate Account Number (CAN): -
Corporate companies, MNCs and Public limited companies which sold/issued shares to the public will be
given CANs. Each Corporate Account Number will have seven sub accounts for each specific
operating/running purpose of the company.
The first sub account shall be utilised for receiving, storage and usage of money for running of that company.
The second sub account [LSA/land savings account] shall be utilised for having all records of immovable
properties like land, buildings, infrastructure and etcetera of that project/plant/business.
The third sub account [movable Property Account/MPA] shall be used for registration, storage and usage of
ownership rights for all fleet of vehicles and other movable properties like machinery etcetera required for
running of that company.
The fourth Sub account [Shares Account] shall be used for storage of all shares of the promoters and the
public of that company.
The fifth sub account will contain the details and accounts of all the employed manpower of that company.
The sixth sub account [ Raw materials account/RMA] will contain the detailed accounts of all raw materials
and other required inputs bought and used for running of that company.
The seventh sub account [Products Account/PA] will contain the details and accounts of all products
manufactured, sales and inventory. TOP Tax system’s CAN with seven sub accounts is a new procedure to see
that company’s financial books were clean, accurate, open and transparent to all share holders so that there
can be no room for fraudulent and deceptive financial statements.
Vivid explanation: - The TOP Tax system’s Corporate Account Numbers (CANs), which consists of 7 sub
accounts, will make all companies’ accounts fully transparent and open to all share holders every day (unlike
quarterly, half-year and yearly statements released by the companies in the present system) for inspection,
study and analysis before investing their hard earned money in shares of those companies with sound
Money will flow into the first sub account of Corporate Account Number (CAN) when products are sold and
money will go out when payments are made towards salaries, purchase of raw materials, services,
equipment etc,. The seventh sub account, which records the manufactured products, gets updated online at
every stage of production and marketing just like money savings account. The depletion of stock in the
seventh account (products account) means the increase of money in the money account (first sub account)
on the selling of products. Similarly the decrease of raw materials in the sixth sub account means an increase
of finished products in the seventh sub account. The increase of raw materials in the sixth sub account points
to depletion of money in the money account (first sub account) on purchase of raw materials. All these seven
accounts get updated online at every stage of construction, production and marketing showing the exact
details of debits and credits relating to money, raw materials, finished products, borrowings, shares, etc., for
the benefit of all investors who put their hard earned money into these companies. The total money, the
value of raw materials, finished products, machinery, movable and immovable properties recorded in the
seven sub accounts of any Corporate Account Number (CAN) minus the borrowings is equal to the total
strength of that company.
The TOP Tax system’s transparent accounting system in Corporate Account Number (CAN) with seven sub
accounts for money, movable properties, immovable properties, manpower, shares, raw materials and other
inputs, and manufactured products and inventory will remove all frauds in accounting, securities, stocks and
investment. These CANs with seven sub accounts ensure that there will be no chance of fraudulent business
practices of overstating profits, concealing debts, spreading the expenses out over several years, under
voicing or over voicing of raw materials, inputs, and manufactured products, under or over stating of stocks,
padding up of project cost and diverting of funds at grounding, construction, erection and all stages of
project implementation and publication of falsified financial reports. The CANs of TOP Tax system can also
check the diversion of funds from one company to another company within the group companies (same
promoters). The TOP tax system gives a big boost to stock markets as people start buying huge lots of
shares to maintain minimum balance in their accounts in order to avoid Profit tax. There will be no
significant effect of TOP tax system on intraday trading and Future options trading because the looser looses
extra 4% of the loss amount only in the intraday trading. People will prefer to buy shares on the long term
and annual yield basis. They invest in the companies which give handsome dividends year after year.
Thus a country’s exact worth of all its money, movable and immovable properties, shares, gold, ores and
minerals will be known exactly at any given point of time.
TOP Tax system insists that the entire natural resources of any country should belong to people of that
country. The total known reserves of all natural resources should be recorded dematerialise form in
Government accounts. The Government should sell ores or minerals to mining companies at reasonable
price in terms of quantity or tonnes instead of leasing out mines in terms of extent or acres. Every tonne of
ore or mineral mined should be paid by mining companies. The mining company which offers the highest
price per tonne should be given the licence to mine after paying advance payment for the quantity it wants
to mine. All the mining companies should buy ore or minerals from Governments before start of mining. The
bought ore or mineral will be in dematerialised form and transferred from Government account to mining
companies’ CAN. Every tonne of mined ore or mineral will be accounted and transferred from one account
to another account i.e., from miner’s account to user’s or exporter’s account. The quantity of ores or mineral
recorded in the Corporate Account Numbers (CAN) gets depleted when used in the production process or
when exported. The stocks get increased when bought from mining companies or Governments. When a
mining company sells or exports the mined ore or mineral to any other company the transfer of rights of
bought ore or mineral will be made online from the mining company’s CAN (sixth sub account) to the buyer’s
CAN. At the same time money will be transferred from buying company’s CAN to mining company’s CAN.
After the depletion of the recorded bought stocks in the CAN, the mining company will have to buy fresh
stocks from the Governments and replenish its sixth folder. That means the buying and selling of natural
resources will be made both in physical form and dematerialised form. TOP Tax system makes it impossible
for any mining company to illegally mine huge quantities of ore or minerals without paying correct price. TOP
Tax system makes it possible to know the exact quantity of ores or minerals mined, exported or used by
TOP Tax system’s five main objectives are 1)The tax collections from people, 2) the
distribution of revenues from governments to people in the form of subsidies, relief funds in the event of
natural calamities like earth quakes, floods, famines, pensions, cash transfers towards monthly rations,
hospital bills, education bills, et., 3) providing all basic services including registrations of movable and
immovable properties, driving licences, air, bus, train tickets, permits, licences, payment of electricity,
telephone bills, water cess, house taxes, issue of voter lists and voter slips, birth and death registrations,
census figures at every day, every hour, every minute (unlike at every decade in the present system), 4)
lending money to borrowers at the lowest PLR (average 3%per annum). All these objectives can be met and
carried through banks/service centres to all people at single window, situated nearest to their homes (5)
implementation of welfare schemes to BCs, SCs, STs, towards education, self employment and other areas,
and monthly pensions to senior citizens (with no or paltry incomes) and physically challenged.
All the earnings/savings of an individual deposited in their respective accounts
(MSA/SSA) in the form of numerical/digital value can be utilised at any time for buying of movable or
immovable property or for any other legally allowed purpose. The unutilised deposits will be disbursed as
loans to the borrowers by the banks at the lowest lending rate (average 3% per annum as operating cost).
The total profits (an estimated 64,973crores) got by all the banks/ service centres will be more than enough
to operate them and they can meet all the objectives of TOP Tax system i.e. providing all basic services to
people at absolutely free of cost at single window.
Read full article from the following link - https://www.academia.edu/11860995/Bank_reforms
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VIJAYA KRUSHNA VARMA