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Greece issue not greasy for India: RBI governor

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Chennai: India’s exposure to cash-strapped Greece was very limited and the central government was in talks with the central bank on providing additional capital to public sector banks, a top Reserve Bank of India (RBI) official said on Thursday.

RBI Governor Raghuram Rajan said capital investments in the Indian economy were picking up while reforms were needed for stronger growth.

Speaking to reporters after attending RBI’s board meeting here, Rajan said the country has very limited exposure to Greece that was facing a crisis after defaulting on payments to the International Monetary Fund and would not be impacted much directly. However, the develop ments may have a slight indirect effect, he conceded.

He said the Greece issue may impact the exchange rates. Untoward developments in that country could also place at risk global investments, he warned.

Rajan said global investors after analysis would find the India story to be very good. India’s macro policies were good while the growth prospects and foreign exchange reserves were healthy, he pointed out.

Rajan said India was attractive for foreign investors given the opportunities while the global economy is on the road to recovery.

According to Rajan, the Indian economy was picking up as there were signs of capital investment picking up while the government has to address some issues to put on track the stalled infrastructure projects.

However, he cautioned against relying on foreign investors to fund government or corporate banks market.

Queried about inflation, the RBI governor said it was being watched as well as the progress of the monsoon.

On the issue of non-performing assets of banks, Rajan said RBI was working with the banks so that they recognise the issue early.

He said additional capital infusion by the government into public sector banks will also provide the necessary buffer for the latter.

Rajan said the process of appointing new heads for public sector banks will be completed soon.

According to him, exports was an area of relative weakness which was true across different Asian economies.

Rajan also announced that RBI will put in place a regulatory framework to allow a new kind of Non-Banking Finance Company (NBFC), which could act as an account aggregator to enable the common man to see all his accounts across financial institutions in a common format.

The idea of such an NBFC had emanated from the Financial Stability and Development Council (FSDC).

RBI deputy governor S.S. Mundra said the central bank proposes to recommence the Financial Inclusion Advisory Committee (FIAC) to take the financial inclusion agenda forward.

Mundra said the work on financial inclusion was far from complete and a road map needed to be laid out to take the agenda forward, as Prime Minister Narendra Modi indicated at RBI’s 80th Anniversary celebrations.

This has also assumed critical importance following the massive efforts made for opening of bank accounts under the Prime Minister’s Jan Dhan Yojana with focus on Jan Dhan accounts, Aadhar identity and Mobile phones.

According to Mundra, RBI would request all financial sector regulators as also the government, self-regulatory organisations, research organisations, Unique Identification Authority of India (UIDAI), National Payments Corporation of India (NPCI) and such other stake holders for nomination to FIAC.

He said that as an input to the FIAC, RBI will set up an internal group with the concerned departments to prepare a blue print for financial inclusion for the next five to 10 years identifying ways to integrate resources available with all financial institutions in achieving the goals for financial inclusion.

Harun R. Khan, another RBI deputy governor, highlighted the measures being taken to move towards less-cash less-paper-based payment system, with focus on creating more acceptance infrastructure for the huge number of plastic cards issued by banks and upscaling mobile banking.

The RBI’s board meeting also discussed the draft Annual Report for 2014-15.

The Annual Report of RBI gives an account of what was planned in the past year, what was achieved and what was not, as also what the central bank proposed to do in the coming year.

(IANS)

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RBI maynot have been Authorised to Issue Currency Notes of Rs 2,000 and Rs 200

the Reserve Bank Of India (RBI) does not seem to have any official records to prove that it had authorised the issue of new currency notes in denominations of Rs 2,000 and Rs 200, after demonetisation

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authorised to issue currency notes
Reserve Bank of India doesnot have any proof to have been authorised to issue currency notes. Wikimedia.

Mumbai, Oct 28: In what could be a bizarre situation, the Reserve Bank Of India (RBI) does not seem to have any official records to prove that it had authorised the issue of new currency notes in denominations of Rs 2,000 and Rs 200, after demonetisation, according to documents available through RTI.

“As per RTI replies provided by the RBI, the country’s central bank has apparently not published any Government Resolution (GR) or a circular till date to issue the new Rs 2,000 and recently, the Rs 200 currency notes,” says Mumbai-based RTI activist M.S. Roy.

Authorised to Issue Currency Notes.
Rs. 2000 note was issued by RBI who maynot ahve been Authorised to Issue Currency Notes. Wikimedia.

A May 19, 2016 document — roughly around six months before demonetisation — shows that the RBI’s Central Board of Directors approved a proposal put forth by its Executive Director on May 18, 2016.

This (proposal) pertained to the new designs, dimensions and denominations of future Indian bank notes, and the Board resolved to forward it to the central government for approval, as per extracts of the minutes of that Board meeting.

Essentially, this was carrying forward an earlier such proposal made on July 08, 1993 to introduce a new family of Indian bank notes of Rs 10, Rs 20, Rs 50, Rs 100 and Rs 500 of reduced sizes.

This old proposal (July 08, 1993) was approved at an RBI Central Board Of Directors meeting on July 15, 1993 as per a memorandum dated August 3, 1993 sent from RBI’s Central Office, Mumbai, to the Chief Officer, Department Of Currency Manager (RBI Mumbai), which was signed by the then Executive Director, A P Aiyer.

As per that proposal (of July 8, 1993), these new Indian currency notes of reduced size were to incorporate several fresh and enhanced security features in order to check counterfeiting, according to the same August 3, 1993 memorandum (quoted above).

Roy had also filed a separate RTI query on February 27, 2017, asking for documentation about photographs of Mahatma Gandhi which are not being printed on the Re 1 notes, but were being printed on all currency notes of denominations ranging from Rs 5 to Rs 2,000.

In reply to this particular query, the RBI provided resolutions of its board meetings held on July 15, 1993, July 13, 1994 and May 19, 2016.

authorised to issue currency notes
RBI had issued notes with no proof if authorised to issue currency notes. Wikimedia.

However, these resolutions talk about design features merely for Rs 10, Rs 20, Rs 50, Rs 100 and Rs 500, all of which bear the photographs of the Father of the Nation.

None of these RBI board resolutions make any references about design features or Mahatma Gandhi photographs for denominations of Rs 1,000, Rs 2,000 and now, the latest entrant to the Indian bank notes family, the Rs 200 currency note.

Hence, Roy said that if the RBI board resolutions never even discussed design features or Mahatma Gandhi photographs to be incorporated in Rs 1,000 notes (discontinued after demonetisation), Rs 2,000 denomination notes (introduced on November 8, 2016) and the subsequent Rs 200 notes (introduced in mid-2017), it clearly indicates that no official approval was granted.

He questioned that if no approval was granted for issuing these denominations, who authorised these denominations, their design, printing and distribution.

“If there has been no approval by the RBI Board, no supporting GR or any other known documentation in the public domain, then there is a big question mark about the legal validity and official (monetary) status of these notes — namely Rs.200 and Rs.2,000. The matter merits an independent investigation,” Roy said.

However, if such approvals do indeed exist, then the RBI and government must explain why these documents were not made available despite an RTI query or why they were not in the public domain. (IANS)

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Raghuram Rajan’s Name in Clarivate List of Nobel Prize Worthies

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Rahuram Rajan
Former RBI governor Raghuram Rajan. ians

New Delhi, Oct 7: Former Reserve Bank of India (RBI) Governor Raghuram Rajan’s name figures in this year’s list of possible winners of Nobel Prize in economics brought out by Clarivate Analytics.

The economics prize will be announced in Stockholm on Monday, according to Nobelprize.org.

Clarivate Analytics, earlier a Thomson Reuters unit, publishes a list of possible Nobel Prize winners based on research citations, ahead of the formal announcement by the Nobel committee.

Raghuram Rajan is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at the Booth School of Business, University of Chicago.

Giving the list of six possible candidates for the economics Nobel, Clarivate said these were Citation Laureates — standouts whose research is clearly “of Nobel Class” according to its significance and utility, as attested by markedly high citation tallies recorded in the Web of Science.

According to information available on Clarivate’s website, in the last 15 years, 45 of the selected researchers had gone on to receive a Nobel — nine in the same year in which they were tipped by Clarivate and 18 within two years of the distinction.

Raghuram Rajan’s three-year term as RBI governor ended on September 4, 2016.

Exactly one year after his term as RBI governor came to an end, Rajan published a book with his “commentary and speeches” to convey what it was like to be at the helm of the central bank in “those turbulent but exciting times”.

Rajan, who was considered a vocal RBI Governor, in his book “I Do What I Do” said The demonetisation tool used by the Indian government to drive out black money could have long-term benefits but its short-term economic costs would outweigh them.

“I was asked by the government in February 2016 for my views on demonetisation, which I gave orally. Although there might be long-term benefits, I felt the likely short-term economic costs would outweigh them, and felt there were potentially better alternatives to achieve the main goal,” he wrote.

The Indian government undertook the demonetisation drive on November 8, 2016 by banning high denomination Rs 1,000 and Rs 500 notes.

Raghuram Rajan is said to have predicted the 2008 market crash caused by the housing market crisis in the US that put its economy into deep recession and set off a global slowdown.

In 2011, he published the acclaimed “Fault Lines” on how hidden financial fractures threaten the world economy.

He has won the British magazine Central Banking’s Central Banker of the Year award for his handling of the rupee crisis in 2013 and bringing back foreign investors to the country.

A graduate of the Indian Institute of Technology, Delhi, Raghuram Rajan served as visiting professor at Stockholm School of Economics and at Kellogg School of Management.

He was also a visiting professor at MIT Sloan School of Management.(IANS)

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New Rs 200 notes: It may take ATMs three months to dispense Rs 200

Will all the 2.25 lakh ATM machines across India would be recalibrated?

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Wait for 3 more months as ATM recalibration is not yet done
Wait for 3 more months as ATM recalibration is not yet done. Wikimeida
  • Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up
  • The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent
  • The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon
New Delhi, September 4, 2017: While the RBI launched the new Rs 200 notes a week ago, it may take up to three months for ATMs to start dispensing the new denomination currency “new Rs 200 note” as it will involve a huge exercise of recalibration.

What are ATM companies saying about when will the new Rs 200 notes come into the market?

Some banks have even asked the ATM companies to begin testing the new Rs 200 notes for recalibration of the machines, though they have not got supplies of the new Rs 200 notes/ currency. Only last year, the banks were involved in the recalibration of ATM machines after the demonetization of high-value currency notes in November.
ATM manufacturing companies said that they have not received any directive from the RBI regarding the recalibration of ATMs for the new Rs 200 note. They disclosed that some banks have at an informal level have asked them to start testing of the new note since it is of a different size.

 

When will the supply of the new Rs 200 notes see an increase?

Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up but has not given any time-frame by which it will be available in adequate numbers.

 It is yet to be seen whether all the 2.25 lakh ATM machines across India would be recalibrated for dispensing the new Rs 200 notes.

 

 avi B Goyal, Chairman, and Managing Director, AGS Transact Technologies Limited, which claims to have an installed base of 60,000 ATMs, told IANS, “The process of recalibration will begin once we receive the directive from the RBI. The size of the new Rs 200 notes are different from the existing ones and so, once we receive the new Rs 200 notes, we will have to understand its dimensions and accordingly reconfigure the ATM cassettes. Next, we will have to check if the supply of new Rs 200 notes is good enough to run the cassettes at full capacity.”

 “The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent. In fact, the ATMs will continue to be fully operational during recalibration and will continue to supply Rs 100, Rs 500 and Rs 2,000 denominations,” he said.

 

Among the other companies operating in the sector are NCR Corporation, which has over 1,08,000 machines, and BTI Payments, which has 4,500 cash dispensers. NCR Corporation said that while some banks have reached out to them to start testing of the new Rs 200 notes, they were yet to receive the supply to begin the process.

 “Banks have started getting in touch with us for testing the same “new Rs 200 notes”. They will let us know which machines they wish to configure for new rs 200 notes, which will require physical visits to ATMs. However, the new Rs 200 notes are still to be provided to us by the respective banks so that the testing can begin,” Anand Garollu, General Manager (Services), NCR Corporation said.

K. Srinivas, Managing Director, and CEO of BTI Payments, a RBI-licensed firm that operates cash dispensers not owned and managed by banks, said, “Recalibration will begin as and when we receive adequate quantity of new Rs 200 notes. We are looking to roll this out as quickly as possible.”

 He said that the industry was expecting new Rs 200 notes to be available over a period of time across various geographies.

 “The recalibration can be done progressively as and when the new denomination note starts to become available. Unlike the last time around (during demonetization), when we had to recalibrate all machines in one go,” Srinivas added.

 The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon. However, emails to RBI in this regard did not elicit any reply, they said.

 “The production of these “new Rs 200 notes” is being ramped up by the currency printing presses and over time, as more notes are printed, it will be distributed across the country through the banking channels and will be available for the public in adequate quantity,” the RBI had said in a statement.

 Currently, new Rs 200 notes are available only through select RBI offices and some banks.

While State Bank of India and Punjab National Bank are reported to have received the new Rs 200 notes, Eknath Baliga, Manager, KYC-Antimoney Laundering Cell, Corporation Bank, Mangalore, told IANS that none of its branches across the country had received the new Rs 200 notes so far.

The new Rs 200 notes are currently being printed only by RBI presses. Security Printing and Minting Corporation of India (SPMCIL) sources told IANS that the company has not received any indent so far for the printing of new Rs 200 notes. India’s two currency presses are owned by RBI and two by SPMCIL, which is a government-owned company.

 How ATM recalibration happens:

Usually, an ATM holds four cassettes — three of which can continue to be used for Rs 100, Rs 500, Rs 2,000, and the fourth cassette can be used for the new Rs 200 notes. On an average, each cassette has a capacity to hold 2,000-2,500 notes depending upon the quality of cash issued by banks. However, there are many ATMs that only have either two or three cassettes.

The number of slots in the ATM can be configured as per the bank’s preference. The banks decide which denomination needs to be configured in a machine on the basis of the customer profile in the area where the ATM is located and the number of transactions on that machine.

The banks need to make requisite changes at their ATM switch before the rollout of the physical recalibration at the ATMs in the field.

The recalibration of a new denomination takes 30-45 minutes per ATM. The process of recalibration is not very difficult but is time-consuming given an engineer has to visit every ATM and configure it to dispense the requisite denomination.

The introduction of the Rs 200 note has been welcomed as it would ease the currency circulation in the market as people prefer lower denomination cash withdrawals from ATMs. Rs 200 would also be more convenient for rural consumers. (IANS)