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Fri, 24th February 2017

Anirudh Sethi Report

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Archives of “india” Tag

“Humiliated” by post-note ban events, RBI staff write to Urjit Patel

Feeling “humiliated” by events since demonetisation, RBI employees today wrote to Governor Urjit Patel protesting against operational “mismanagement” in the exercise and Government impinging its autonomy by appointing an official for currency coordination.

In a letter, they said autonomy and image of RBI has been “dented beyond repair” due to mismanagement and termed appointment of a senior Finance Ministry official as a “blatant encroachment” of its exclusive turf of currency management.

“An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained,” the United Forum of Reserve Bank Officers and Employees said in the letter addressed to Patel.

Commenting on “mismanagement” since November 8, when note ban was announced, and the criticism from different quarters, the letter said, “It’s (RBI’s) autonomy and image have been dented beyond repair.”

At least two of the four signatories — Samir Ghosh of All India Reserve Bank Employees Association and Suryakant Mahadik of All India Reserve Bank Workers Federation — confirmed the letter. The other signatories are C M Paulsil of All India Reserve Bank Officers Association and R N Vatsa of RBI Officers Association.

The forum represents over 18,000 employees of the RBI across the ranks, Ghosh said.

India’s Q2 FY17 GDP growth at 7.3% vs 7.6% YoY

India’s GDP (Gross Domestic Product) for the second quarter of FY17 grew at 7.3% versus 7.1% quarter-on-quarter and 7.6% year-on-year. The GDP data comes at a time when there are growing concerns that the demonetisation decision of Modi government may slow down the world’s fastest growing economy in the coming quarters. Fitch Ratings has already lowered India’s GDP growth forecast for this fiscal to 6.9 per cent from 7.4 per cent, saying there will be “temporary disruptions” to economic activity post demonetisation.

It said economic activity will be hit in the October- December quarter because of the cash crunch created by withdrawal and replacement of 500 and 1000 rupee notes that accounted for 86 per cent of the value of currency in circulation. “Indian growth has also been revised down to reflect temporary disruptions to activity related to the RBI’s surprise demonetisation of large-denomination bank notes,” Fitch said, as it revised real GDP growth forecast down to 6.9 per cent for 2016-17, from 7.4 per cent projected earlier

All India Bank Employees Association demands RBI Governor’s resignation

Holding RBI Governor Urjit Patel responsible for ineffective handling of the crisis post the demonetisation drive, All India Bank Employees Association vice-president Vishwas Utagi on Wednesday said that bank unions are adamant on their demand for the former’s resignations as well as lockdown of the apex bank.

Questioning the failure of the RBI as the regulatory system, Utagi said that Patel, who hasn’t uttered a word till now, should resign with immediate effect.

“Since two weeks, the bank employees are working from eight in the morning till midnight including weekends. Still, there are truckloads of work to do. There has been absolutely no cooperation from the RBI’s side,” Utagi told ANI.

“It added to the mess by banning cooperative banks from exchanging old notes or accepting deposits,” he added.

Citing the present situation as a clear mess, Utagi further said that there have been in total ten lakh employees at various banks who are working in and out in a situation where there are inadequate cash counting machines, fake notes detection machines and manpower security personnel.

The All India Bank Employees Association vice-president’s assertion come as a united opposition is cornering the government in Parliament and demanding Prime Minister Narendra Modi to explain the rationale behind imposing such a decision.

Cannot disclose details on release of new Rs 500 notes: RBI

The Reserve Bank of India on Friday informed the Madras High Court that it cannot disclose details regarding the release of new Rs 500 denomination currency to the banks for distribution due to security reasons. The submission was made by the counsel for RBI on a petition seeking a direction to the Registrar of Co-operative Societies to follow procedures laid down by RBI relating to demonetisation and permit cash withdrawal and exchange of old currencies in the societies.

After recording the submission, the court posted the matter for further hearing to November 28. The High Court had on November 16 adjourned for today the hearing in the case after it sought to know from the RBI when new Rs 500 denomination currency would be made available in Tamil Nadu to ease the present cash crunch following demonetisation.

RBI had then submitted that it faced practical difficulties in transporting currency in view of seizure of over Rs 500 crore by poll authorities in Tamil Nadu two days before the 16 May Assembly election in three constituencies.

On permitting District Central Cooperative Banks to exchange the demonetised currencies, the counsel had submitted that “the decision to ban DCCBs from exchanging notes was made apprehending malpractices”.

Demonetisation: PM Narendra Modi’s ‘masterstroke’ could end up as ‘joke’, says Chinese media

Prime Minister Narendra Modi’s “masterstroke” to demonetise Rs 500 and Rs 1,000 notes could be reduced to a “nasty partisan conspiracy” or a “costly political joke” if it fails to deliver on its high-sounding promises, Chinese official media commented on Thursday.

“While it takes political courage to launch such a trailblazing and massive campaign; it actually takes far more wisdom to give it a happy ending,” an article in the state-run Global Times said.

“Given the fact that people have to pay an absurdly high price for the expected reform, if BJP fails to deliver its high-sounding rhetoric and promises, then Modi’s much-lauded ‘masterstroke’ or ‘big bang reform’ will likely be reduced to ‘nasty partisan conspiracy’ and even a ‘costly political joke’,” it said.

The article noted that demonetisation is by no means new to India. However, rooting out India’s perennial and enormous black economy has never been an easy mission, it said.

“If Modi fails to supplement the blitzkrieg reform with more enduring and fundamental measures, any beneficial effects the reform has created may evaporate quickly, even if Indian people have paid an absurdly high social and economic price so far,” the article said.

The demonetisation may also benefit BJP, it said.

Subbarao warns RBI against taking unclaimed notes as profit

Any move by the Indian government to treat currency that is not surrendered during the ongoing demonetization process as a profit will be “ill-advised,” former Reserve Bank of India (RBI) governor D. Subbarao has warned.

Speaking at MintAsia’s global banking conclave in Singapore, Subbarao cited speculation that the Indian government could use the currency that is not returned to solve its fiscal problems or to recapitalize banks, but pointed out that such a step would send out the wrong message.

“Then demonetization will be viewed as being done with other motives, rather than fighting black money,” Subbarao said.

“For argument’s sake, let us assume that a quarter of the Rs500 and Rs1,000 currency notes in circulation does not come back—this is equivalent to about Rs3.5 trillion, and can be considered as a windfall profit for the RBI. By law, the central bank has to transfer all its profit to the government. If RBI treats this as a profit, and the Centre demands that this be transferred to it, and they use this to play Robin Hood or to recapitalize the banks, or for whatever other purposes, this will send out the wrong message. I don’t believe that this is the intention of the current government, but if they were to do such a thing, it will be highly ill-advised,” he said.

Subbarao also said that he was unsure about the legal position on whether the RBI could claim unreturned currency as profit.

According to him, all currency notes carry a legal obligation, as the “RBI has guaranteed that it will pay the bearer the sum or the value of the denomination that is printed on that note.”

Two-wheelers sales to be affected by demonetisation: ICRA

The November 9 demonetisation is likely to dent domestic two-wheeler sales in the near term, rating agency ICRA said on Tuesday.

Restrictions on cash transactions are expected to affect the demand for the entry segment of two-wheelers which are cash-purchase driven.

The sector achieved a 16 per cent growth during April-October period in the current fiscal.

“Rural markets account for about 60-65 per cent of the entry segment motorcycle sales and given the high propensity for cash purchases in the rural markets, the entry segment of the motorcycles is expected to be a casualty,” the ratings agency said in a statement.

Favourable monsoon has been a significant trigger for healthy demand from the rural markets during the current fiscal, most of the sales have been sentiment driven. The Kharif crop sales have also commenced in October or November.

However, the recent scrapping of high denomination notes and the consequent constrained liquidity may result in dip in realisations as well as delay in realisations of crop sales. It will cause postponement of demand for such vehicles, the agency said.

“Unavailability of adequate cash during the preparation of sowing time for next Rabi season is also likely to have a bearing on farm incomes in the next season,” it added.

The Secret World Of Indian Currency Printers

The recent decision to discontinue the Rs 500 and Rs 1000 notes and introduce the Rs 2000 notes was taken with a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy. However, are our new currency notes printed with the involvement of the same blacklisted companies that infact were the source of fake notes to Pakistan in the first place?

RBI Rocked & Parliament Shocked

 Sometime during 2009-10 CBI raided some 70-odd branches of various banks on the India-Nepal border from where counterfeit currency racket was unearthed. The officials of these branches told CBI that they had got these notes from RBI which led CBI to raid the vaults of RBI. What CBI found in the vaults of RBI were huge cache of counterfeit Indian currency lying in the denomination of 500 and 1000, the same counterfeit currency smuggled by the Pakistani intelligence agency ISI into India. The question was how did these fake currency landed in the vaults of RBI?

Later in 2010 the Committee on Public Undertakings (COPU), an Indian Parliamentary committee was shocked to find out that the Government had outsourced the printing of Rs 1 lakh crore of currency notes to US, UK and Germany putting the “entire economic sovereignty (of the country) at stake”.

The 3 companies to whom the Indian currency printing was outsourced are American Banknote Company (USA), Thomas De La Rue (UK) and Giesecke and Devrient Consortium (Germany).

Pakistan violates ceasefire in Kathua, Samba and Jammu

Pakistani rangers pounded BSF posts and civilian areas using small arms and mortars shells in overnight ceasefire violations along the International Border (IB) in Samba, Kathua and Jammu districts.

Pakistan rangers violated ceasefire in Samba, Kathua and Jammu district of Jammu region last night, a senior BSF officer said.

“Firing started from Pakistan side at 2115 hours in R S Pura Sector and continued intermittently till 0300 hours,” Deputy Inspector General (DIG) BSF Jammu Frontier Dharmendra Pareek said today.

Small arms and mortars shells were fired by the rangers but were not effective. BSF retaliated appropriately to the firing, Pareek added.

He said at 0200 hours Pakistan started firing in gaps in Hiranagar and Samba sectors which continued till 0600 hours.

“BSF retaliated appropriately wherever required,” he said.