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The Indian Express 16 June 2020 Written by: Sunny Verma Latest data from the Reserve Bank of India shows that transactions and payments through various banking channels fell between 26 per cent and 71 per cent in April over March, depending upon the mode of transaction. PAYMENT transactions contracted by a massive 46 per cent in value in April over the previous month as the nationwide lockdown affected economic activity across the board. Latest data from the Reserve Bank of India (RBI) shows that transactions and payments through various banking channels — cheque payments, ATM withdrawal, NEFT and RTGS, fell between 26 per cent and 71 per cent in April over March, depending upon the mode of transaction. The sole exception was direct benefit transfer (DBT) payments by the government using the Aadhar-enabled platforms, which recorded a 138 per cent jump. Transactions through issuance of cheques – a paper instrument – saw the sharpest contraction of 71 pe...

I ndian Express dated: May 04, 2020 Amartya Sen once wrote in the Economic and Political Weekly that Alfred Tennyson’s poem “The Charge Of The Light Brigade”, which glorified charging ahead in nobility, “Theirs not to reason why/ Theirs but to do and die”, was inappropriate inspiration for policy because “Good reform is the charge of the heavy brigade. The reason why is central to the task”. A central bank like the RBI must replace intellectual certainty with continuous debate about Why because their job involves complex trade-offs — next quarter vs quarter century, growth vs stability, and mandates vs expectations. A global anthropological shock like COVID makes these trade-offs — they are not conflicts — even harder. The RBI must remember three things — acting prudently to balance the next quarter and quarter century, acting flexibly to blunt this economic cataclysm, and acting within their mandate to ensure institutional legitimacy and immunity. First, acting prudently. If e...

Scroll.in October 09, 2019 Fund flows declined from Rs 7.36 lakh crore between April and mid-September 2018 to Rs 90,995 crore in the same period this year. Fund flows from lending institutions to the commercial sector have declined as much as 88% till mid-September in this financial year, the Reserve Bank of India said in a report on Friday. Such flows collapsed from Rs 7.36 lakh crore between April and mid-September 2018 to Rs 90,995 crore in the same period this year. This indicates a slowdown in investment activity, which can be attributed to risk aversion and demand slowdown, the central bank said in the Monetary Policy Report for October. Global uncertainties have also weakened domestic investment activity, according to the report. In the April to mid-September period in 2018, non-banking financial companies lent Rs 41,200 crore to the commercial sector, but this year, the flow reversed – Rs 1.26 lakh crore moved from the commercial sector to the NBFCs. Non-food ...

Business Line PTI Oct 06, 2019 Foreign portfolio investors have offloaded equities worth around ₹3,000 crore in just three trading sessions of October amid fears of global recession and trade war. This follows a net investment of around ₹7,850 crore by foreign portfolio investors (FPI) into equities in September. Market experts, however, believe that FPI inflows are expected to pick up after the rate cut by the Reserve Bank of India (RBI) and several decisions taken by the capital markets regulator Securities and Exchange Board of India (SEBI). The central bank on Friday cut benchmark repo rate by 25 basis points to 5.15 per cent. The interest rates cut is for a record fifth straight time to almost a decade low. According to the depositories data, overseas investors pulled out ₹2,947 crore from equities and ₹977 crore from debt segment on a net basis. This resulted in a total net outflow of ₹3,924 crore from the Indian capital markets during October 1-4. Marke...

Financial Express April 10,2019 IMF Chief Economist Gita Gopinath has become the latest to weigh in on the controversy surrounding India’s actual GDP growth, after a recent letter by 108 economist raised concern and sparked a debate on the credibility of official data. “There are still some issues with the way India calculates its growth rate and the IMF is paying close attention to the new numbers that are coming out,’’ Gita Gopinath said to CNBC in a recent interview. India, being touted among the fastest growing economies, is also an aspiring nation with one of the youngest populations in an aging world. However, the official growth numbers have come under severe criticism from time to time as the growth rate does not resonate with the situation on the ground, according to various experts. Although Gita Gopinath welcomed the changes made to the method of estimating GDP growth rate such as revision in base years, she raised concerns over the use of “deflator” in t...

Financial Express April 10,2019 It seems that  WhatsApp  will have to wait a little longer for the full-scale commercial launch of its BHIM UPI-compliant payment service, the process for which began over three years ago in 2016. The instant messaging application is likely to meet the requirement of storing consumers payment data in India by June-July this year and then approach the Reserve Bank of India ( RBI ) for a fresh approval. At present, the Facebook-owned company is running a pilot for the service, WhatsApp Payments, with close to 1 million users.  Google  Pay leads the payment service providers market in India followed by Paytm, PhonePe, BHIM app and Axis Pay. Sources said WhatsApp will approach the banking regulator around July after it makes arrangements for storing and processing payments service data in India. Last month, the RBI, in an affidavit to the Supreme Court, said that WhatsApp has not met data localisation requirement. “RBI has been...

The Money Control April 08, 2019 PTI The Reserve Bank of India Monday came out with guidelines for banks to set up new currency chests, which include minimum area of 1,500 square feet for strong room. "Area of the strong room/ vault of at least 1,500 sq ft. For those situated in hilly/ inaccessible places, the strong room/ vault area of at least 600 sq ft," the RBI said while specifying minimum standards for setting up new currency chests. Besides, the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day.For those situated in the hilly/ inaccessible places, capacity of 2.1 lakh pieces of banknotes per day.Earlier, a RBI appointed committee had recommended that the apex bank should encourage banks to open large currency chests with modern facilities and Chest Balance Limit (CBL) of at least Rs 1,000 crore. The central bank further said the currency chests should have CBL of Rs 1,000 crore, subject to ground realities and reasonab...

February 16, 2019  Authorised dealers can offer foreign exchange derivative contracts up to $1 million to users - retail or non-retail - to hedge their exposure to the exchange rate of Rupee against a foreign currency on account of current and capital account transactions permissible under Foreign Exchange Management Act (FEMA), 1999, according to the Reserve Bank of India’s draft circular on Hedging of foreign exchange risk by Residents and Non-Residents. Non-retail users Non-retail users include insurance companies, mutual funds, pension funds and other collective investment schemes, entities regulated by RBI, financial institutions, companies (meeting any one criteria: listed on an exchange in India or any Financial Action Task Force jurisdiction; networth of Rs 200 crore or its equivalent; the notional amount of the user’s outstanding foreign exchange derivatives exceeded $250 million or equivalent at any point in each of the previous four quarters). Non-retail user...

February 17, 2019 They call for a mechanism to reduce unwanted litigations, strict adherence to timelines under IBC To ensure the speedy resolution of cases under the Insolvency and Bankruptcy Code (IBC), bankers have suggested, among others, the introduction of a mechanism to reduce unwanted litigation and strict adherence to the timelines under the code. As per the FICCI-IBA Survey of Bankers (for July-December 2018 period), to reduce unwanted litigation, provisions similar to DRT (Debt Recovery Tribunal) must be introduced, where a percentage of the loan outstanding is insisted upon while filing an appeal. The survey said the time norms under the IBC for admission, appointment of valuer and forensic auditors, as well as for the resolution of the company must be strictly followed. Need more NCLT benches To cater to the rising number of cases under the National Company Law Tribunal (NCLT), there is a need to improve the capacity by increasing staff and establis...

FIRSTPOST July 09,2018 PTI Just days after the Reserve Bank of India (RBI) issued a licence to Bank of China to launch operations in India, the Ministry of Home Affairs has reportedly raised objections to a proposal by the Industrial and Commercial Bank of China (ICBC) to open a second branch in India. Sources quoted by  The Indian Express   said the MHA has voiced concerns that ICBC has employed more than the authorised number of Chinese nationals at its Mumbai branch. The MHA, according to the report, told the finance ministry that ICBC's Mumbai branch has about 11-12 Chinese nationals while it is only authorised to employ a total of three or four Chinese nationals. Further, only three-four Chinese nationals working with the ICBC are registered with the Foreigners Regional Registration Office (FRRO). According to  International Business Times , the Chinese nationals, who are not registered with the FRRO, leave just before the completi...

The Times of India , February 15, 2018 Hit by a Rs 11,400 crore fraud, state-owned Punjab National Bank (PNB)  has cautioned other banks about the modus operandi of the scam.  "It has been reported through a preliminary investigation that the  suspected fraud has been carried out by the perpetrators in collusion  with the staff of one of our branches in Mumbai," PNB said in a letter   sent to various banks, including those from the private and public   sector as also to foreign lenders. Punjab National Bank fraud: Top developments  The letter said it was found through the SWIFT trail that one junior   level official unauthorisedly and fraudulently issued Letters of  Undertaking (LoUs) on behalf of some companies belonging to Nirav Modi   Group.  The companies were maintaining only current accounts with the branch   and none of the transactions were routed though the Centralised   B...

Business Line Bureau, February 07, 2018 As was widely expected, the Reserve Bank of India’s rate setting monetary policy committee (MPC) on Wednesday decided to keep the policy repo rate unchanged at 6 per cent. The status quo on the rate comes as the inflation outlook, in the words of MPC, is clouded by several uncertainties on the upside, including staggered impact of HRA increased by various State governments; pick-up in global growth exerting further pressure on crude oil and commodity prices, with implications for domestic inflation; proposed increase in minimum support price for kharif crops; fiscal slippage; and proposed increase in Customs duty on a number of items. The six-member MPC said there is, therefore, need for vigilance around the evolving inflation scenario in the coming months. RBI Governor Urjit Patel addressed queries from the media on the reasons for keeping the rate unchanged and continuing with a neutral policy stance. Excerpts: The weighted aver...

FE Bureau February 09, 2018 A committee set up by the Reserve Bank of India (RBI) on Thursday recommended that the government consider offering tax-based incentives to merchants to encourage the adoption of digital means of payments in the country. “Given that fintech companies are in their infancy but are growing at a rapid pace, the government may consider introducing tax subsidies for merchants that accept a certain proportion of their business revenues from the use of digital payments as opposed to cash,” said the report of the inter-regulatory working group on fintech and digital banking, chaired by Sudarshan Sen, executive director, RBI. The report also emphasised the need for a data protection law in the country, stating that while sections under the Information Technology Act, 2000, provide for redressal in instances of data breach, the protections guaranteed by them are often subject to the particular terms of a contract between two parties. “…that data protection is ...

The Indian Express Dec 08, 2017 A day after the Reserve Bank of India (RBI) “rationalised” the merchant discount rates (MDR) for debit card transactions, retailers have come out against the new charges, saying they are “unrealistic” and increase the cost to the merchants. “While the RBI has mentioned in its circular that the rates have been ‘rationalised’ to increase the acceptance of debit cards by a wider set of merchants, the increase in the rates and the high cap set defeats the purpose as this increases cost to merchants by almost double,” Retailers Association of India (RAI) has said. “In a retail business, especially a supermarket or hypermarket where the margins are just 2-3 per cent, such an increase in MDR will have a huge impact on costs, making it imperative for retailers to pass it on to the consumer. In the modern day digital economy, there is no validation for the charges that are being levied for debit card transactions to this extent, especially when we...