New Delhi, November 25, 2016: Bankers here say that a section of police personnel are still forcing them to deposit or exchange their old currency for new money although the facility ended on Thursday midnight.
A few bankers IANS spoke to on the condition of anonymity said they were being pressured by police personnel in uniform to provide them new 500 and 2,000 rupee notes in lieu of the demonetised currency.
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Some bank employees who tried to approach senior police officers backed off after being told by the policemen that the money they wanted, converted or deposited belonged to their bosses.
[bctt tweet=””I have no option but to do what the policeman wants.”” username=””]
They (policemen) making such demands were those deputed outside to provide security to our bank. They are not bothered about our problems. They just want to exchange their old notes all the time, one senior officer of a state-run bank told IANS.
The officer admitted that for a few days after the demonetisation was announced on November 8 she did help the policemen change their old currency for new even after banking hours.
The officer, like the others IANS spoke to, said they did this because they felt sorry for the police personnel who spent the whole day trying to control the mobs outside.
A few policemen also related personal problems to generate sympathy.
But now they talk to my colleagues and me in a way that amounts to threatening us although not in so many words. I don’t know what to do, said one female bank officer.
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Senior Delhi Police officers denied the allegations and said they had not received any complaint from any bank.
The government announced on Thursday that exchange of the demonetised currency would cease from midnight of Thursday in all banks. The facility would, however, continue at RBI offices.
But the policemen seem to have no respect for rules, the bankers said.
Unable to handle the pressure caused by an ill-mannered cop, a relationship manager of another bank told IANS: I have no option but to do what the policeman wants.
The policeman threatened to go to the Income Tax Department and lodge a complaint against me. If my senior is not taking action against the policeman, why would I face unwanted problems, the bank official asked.
Another banker complained about a police sub-inspector who allegedly brings in friends all through the day and tells the bankers to exchange their old currency for new money.
When we tell the policeman not to make us do such things, he argues with us, the bank employee told IANS.
All the bank employees insisted they should not be identified by name or designation and that even the names of their banks should not be revealed because they did not want to face the policemen’s wrath. (IANS)
The Governor of India’s central bank, Urjit Patel, resigned abruptly Monday after a months-long tussle over policy with the government that has raised concerns about the bank’s independence as a national election nears.
Government officials have been pressuring the Reserve Bank of India to allow some bad-debt-laden public sector banks to lend more easily, and pushed for it to hand over some of its surplus reserves to help fund the fiscal deficit.
Prime Minister Narendra Modi’s ruling Hindu nationalist Bharatiya Janata Party (BJP), which must call national polls by May, faces anger in rural communities because of slumping farm incomes, and broader concerns about a lack of jobs growth in small businesses that are finding it hard to get banks to lend them money.
Getting control of the reserves would give the government more flexibility in spending on welfare policies and farm support schemes.
Patel cited “personal reasons” for his decision to immediately step down.
His resignation came four days before an RBI board meeting, and at a sensitive time for the government.
On Tuesday, votes in key state elections are due to be counted, with exit polls suggesting the BJP could suffer some major defeats at the hands of the opposition Congress party.
That scenario, and Patel’s resignation, are expected to roil Indian markets. On Monday, forward contracts tracking the rupee against the dollar outside of market hours posted their biggest fall in more than five years.
That added to earlier losses caused largely by concerns — triggered by the state exit polls — that next year’s election might end with a defeat for the pro-business Modi and a weak coalition government, leading to policy uncertainty.
Investors will want to know quickly who Patel’s replacement will be, and how that will affect the direction of financial and monetary policy, analysts said. There was no clear front-runner, but one name being mentioned was former Finance Secretary Hasmukh Adhia who retired at the end of November.
While not commenting directly on Patel’s exit, Moody’s Investors Service said on Monday any signs the government was attempting to curtail the RBI’s independence would be a credit negative.
“We currently assume that the RBI will continue to pursue price and financial stability and implement policies towards these goals,” the agency said in an emailed statement.
Patel announced his departure in a short statement on the RBI’s website in which he said that “on account of personal reasons, I have decided to step down from my current position effective immediately.”
Modi suggested he had not wanted Patel to leave. On Twitter, the Indian leader praised Patel as a “thorough professional with impeccable integrity.”
“He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability,” Modi tweeted. “He leaves behind a great legacy. We will miss him immensely.”
Building for months
Even before Patel’s announcement, the 10-year benchmark Indian government bond yield rose the most since September, and stocks posted their worst close in four weeks, with the broad NSE index losing 1.9 percent.
The pressure on him had been building for some months.
The government has made clear it was not happy with the RBI’s policies and stacked its board with pro-BJP representatives.
Former RBI Governor Raghuram Rajan, who did not take an extension after his term ended in September 2016, said Indians should be concerned about what was happening.
“We should go into the details on why there was an impasse which forced (Patel) to take this ultimate decision,” Rajan told the ET NOW television channel. “The strength of our institution is really important.”
Within the RBI there was a combination of anxiety and relief at the announcement.
“It was very shocking. … Morale of employees is very down,” said one RBI official who has been with the central bank for more than a decade. “This is very sad moment.”
But another official said Patel was often inaccessible to key financial market players and had stifled discussion within the RBI, and that now it might be possible to open up more.
“Finally things will come to peace. I can talk more openly,” this official said.
The officials asked not to be named due to the sensitivity of the matter.
The rift between the government and the central bank became very public in late October when RBI Deputy Governor Viral Acharya warned in a speech that undermining a central bank’s autonomy could be “catastrophic.”
He referred to a meltdown in Argentina’s financial markets in 2010 after a struggle between the government and the central bank over who controlled the bank’s reserves.
Last week, Patel declined to answer reporters’ questions about the rift with the government, which former government officials and analysts said they were convinced was a major factor in his decision to quit.
There was speculation a month ago that Patel might quit over the government pressure, but the rumors eased after the two sides reached an uneasy truce ahead of last month’s RBI board meeting.
“The timing just before this week’s board meeting suggests that there’s still a huge gap between the government and RBI positions on key issues,” said A. Prasanna, head of research at ICICI Securities Primary Dealership in Mumbai. “Markets will now hope that the government has a plan of action ready so as to restore calm.” (VOA)