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Govt May Decriminalise Provisions In 5 Acts Administered By…

5 July 2024
by admin

The Union Budget is likely to decriminalise provisions in as many as five Acts administered by the Reserve Bank of India (RBI).

It is for the first time that Acts under the central bank are being discussed for decriminalisation, a government official told Moneycontrol on July 4.

“The inter-ministerial committee has reviewed the Acts. Nineteen provisions in five Acts were shortlisted for decriminalisation. Out of the 19, six may be decriminalised in the Union Budget, ” he said.

“Payment and Settlement Systems Act, the RBI Act, the FEMA Act, Banking Regulation Act and Indian Coinage Act are among the Acts under review which are administered by the central bank,” he said.

The inter-ministerial committee consists of senior officials from the finance ministry, NITI Aayog, Department for Promotion of Industry and Internal Trade (DPIIT), etc. The committee has been tasked with accelerating the identification of provisions that can be decriminalised in various laws.

What does it imply?

Decriminalising these provisions will help the government to replace many offences that involve imprisonment with just a monetary penalty to boost ease-of-doing business initiatives and save time and cost for both the government and businesses.

Modi government 2.0 had undertaken a significant effort to decriminalise various business and economic provisions to improve ease of doing business.

The Jan Vishwas Bill, which was passed in Parliament during Monsoon session 2023, decriminalised 183 provisions in 42 different laws. The Bill serves as a guiding principle for upcoming amendments in various laws.

The primary rationale behind these decriminalisation efforts is to enhance the business environment in India by reducing the compliance burden and the fear of criminal prosecution for minor or technical infractions. Overall, it represents a significant step towards improving the regulatory landscape for businesses in India, he said.

The decriminalisation of Acts administered by the RBI is likely to be a part of the next edition of the Jan Vishwas Bill, he added.

The government is also likely to decriminalise certain provisions of the Income-Tax Act. The Central Excise Act and the Central Goods and Services Tax Act are also under review, another government official had told Moneycontrol earlier.

Science & Environment

RBI Appoints Arnab Kumar Chowdhury As New Executive Director

1 July 2024
by admin

Mumbai: The Reserve Bank of India (RBI) has appointed Arnab Kumar Chowdhury as executive director with effect from Wednesday. Chowdhury will look after three departments, including DICGC.

Prior to being promoted to executive director, Chowdhury was serving as Chief General Manager-in-Charge in the Department of Supervision. As executive director, he will look after the Deposit Insurance and Credit Guarantee Corporation (DICGC), foreign exchange department, and international department, the RBI said in a statement.

Arnab Kumar Chowdhury is a chartered accountant and holds a master’s degree in economics. He is also a certified associate of IIBF. He has experience of over three decades in the Reserve Bank of India. He has worked extensively in the area of supervision of financial entities.

Arnab Kumar Chowdhury has worked in the area of corporate strategy, budgeting, accounting and issue department. He has also served as a member of several committees and working groups and has been contributing to policy formulation.

Science & Environment

Card dues & gold loans beat bank credit growth…

30 June 2024
by admin

MUMBAI: For banks, credit card outstanding and gold loans remain outliers in growth. The segments recorded a year-on-year increase of 26.2% and 29.7% respectively as of May 2024.
This is much higher than the 19.8% growth in overall bank credit which – adjusting bank’s books for the addition of loans due to HDFC’s merger with HDFC Bank – shrinks down to 16.1%.
The increase in credit card and gold loans comes at a time when RBI has expressed concerns over unsecured credit and is taking a hard look at the gold loan books of some lenders, given the surge in prices of the yellow metal.
Another segment that has been of concern to RBI – bank credit to non-banking financial companies – has moderated. But this segment’s growth is still faster than overall bank credit growth at 16%.

Monthly sectoral data on bank credit released by RBI shows that credit card outstanding stood at Rs 2.7 lakh crore as of May, up from Rs 2.6 lakh crore at the end of March 2024 and Rs 2.1 lakh crore a year ago.
Banks’ gold loan books stood at Rs 1.2 lakh crore at the end of May, compared to Rs 1 lakh crore at the end of March and Rs 90,036 crore in the year-ago period. Bankers said that the increase could also have been due to an increase in market share from NBFCs. Credit cards and gold loans are watched carefully because they reflect household indebtedness and at times financial distress.
The personal segment, with a year-on-year growth rate of 28.7%, continues to be the fastest-growing among industry, agriculture, services and personal loans. However, this is due to the HDFC-HDFC Bank merger, which has resulted in home loans growing nearly 39% yearly (16.9% excluding the merger).
Excluding the merger impact, services are the fastest-growing segment at 23.2% versus 17.8% in the personal segment. A large component of service industry loans comprises of providing loans to lenders.
While the growth rate in credit to NBFCs has moderated from a high of 27% a year ago, the book size continues to remain large at nearly Rs 15.7 lakh crore – up 1.3% from Rs 15.5 lakh crore in March.

Science & Environment

Banks put on alert! RBI warns banks of ‘credible…

30 June 2024
by admin

Banks on alert! The Reserve Bank of India (RBI) has cautioned banks across the nation to be vigilant against potential cyberattacks, following credible intelligence reports. Banks have been instructed to actively monitor their systems round the clock to detect any threats.
In an advisory issued on June 24, the RBI said, “In the light of credible threat intelligence received regarding potential cyberattacks, regulated entities are advised to put in place enhanced state of surveillance and resilience capabilities to guard against these threats.”
According to an ET report, RBI’s communication preceded a social media post suggesting that LulzSec, a group notorious for several high-profile attacks, was targeting Indian banks.The group, which was thought to have become inactive, is said to have resurfaced.
Banks are required to continuously monitor network activities and server logs to identify any malicious intrusions. Additionally, they must keep a close watch on critical payment systems, including SWIFT (the messaging system for international fund transfers), card networks (facilitating card payments), and domestic real-time fund transfer frameworks such as RTGS, NEFT, and UPI.

Cyber Attack Threat: Combat Plan

RBI has issued a reminder to banks, urging them to implement standard controls to safeguard against threats such as DDoS (distributed denial of service) attacks. These attacks involve hackers launching a coordinated assault on a bank’s systems, overwhelming them with a flood of queries that hinder the processing of legitimate customer requests and transactions on the website and online services.
In addition to DDoS protection, banks are required to impose restrictions on remote logins and access to critical systems. They must also conduct thorough scans of all information systems to detect viruses and malware, and ensure that the latest patches are installed after necessary testing.
Also Read | RBI’s overseas gold reserves drop to 6-year low! Share of gold held at home goes up to 53%
The RBI’s Financial Stability Report, released recently, highlights the alarming rise in cyber intrusions and digital attacks targeting the financial sector. Over the past two decades, these incidents have resulted in staggering losses amounting to $20 billion. The central bank has noted that cyberattacks tend to increase during times of political and economic instability, such as geopolitical tensions, leading to disruptive consequences.
An industry official told the financial daily, “About a year ago, a similar communication was issued by the regulator and CERT-In (the Computer Emergency Response Team under the ministry of electronics). Typically, when there is some hint of a possible cyberattack, banks simultaneously test the efficacy of their continuity and contingency plans. It’s the same this time”.
The regulatory communication emphasizes the importance of banks having robust offline backup and recovery strategies in place, and testing their effectiveness.
The official further stated, “Given the numerous instances of attacks, some of which may go unreported, authorities and institutions can’t take intelligence input lightly.”

Science & Environment

Reserve Bank Of India Cancels Licence Of City Co-operative…

20 June 2024
by admin

New Delhi: The Reserve Bank of India (RBI) has cancelled the licence of “The City Co-operative Bank Ltd., Mumbai, Maharashtra.”

RBI in a release said, consequently, the bank ceases to carry on banking business, with effect from the close of business on June 19, 2024. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

The Reserve Bank cancelled the licence of the bank due to the following reasons

– The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.

– The bank has failed to comply with the requirements of Sections 22(3) (a), 22(3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

– The continuance of the bank is prejudicial to the interests of its depositors;

– The bank with its present financial position would be unable to pay its present depositors in full; and

Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, added RBI.

Consequent to the cancellation of its licence, “The City Co-operative Bank Ltd., Mumbai, Maharashtra.” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

Deposit Insurance and Credit Guarantee Corporation

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 87% of the depositors are entitled to receive full amount of their deposits from DICGC. As on June 14, 2024, DICGC has already paid ₹230.99 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.

Science & Environment

Stock Markets Gain 3 Per Cent As Political Stability…

8 June 2024
by admin

New Delhi: In a week full of political surprises, the Indian Indices saw high volatility but ended up gaining more than 3 per cent, buoyed by Prime Minister Narendra Modi’s return for the record third term and RBI’s monetary policy announcements. The BSE Sensex hit a fresh all-time high of 76,795.31 while the Nifty reached a record high of 23,338.70.

On Friday, the Sensex surged 2,732 points or 3.69 per cent to close at 76,693.36. On the other hand, Nifty went up 759 points or 3.37 per cent to end at 23,290. The investors’ losses prior to the new government’s formation moves were almost recovered in just three trading sessions, at more than Rs 28 lakh crore. (Also Read: Sensex Touches All-Time High, Nifty Up 2% On Announcement Of PM Modi Taking Oath)

The BSE Small-cap index surged 3 per cent and Mid-cap Index also went up 3 per cent during the week. The large-cap Index saw 3 per cent rise. The foreign institutional investors (FIIs) sold equities worth Rs 13,718.42 crore. On the other hand, domestic institutional investors (DIIs) bought equities worth Rs 5,578.71 crore. (Also Read: BSE Denies Technical Glitch On June 4 Causing Mutual Fund To Lose Money On Election Day)

According to market experts, the Nifty moved up significantly after a flat closing in the previous trading session. Going forward, the market remains a buy on dips as long as 23,000 is not broken. “On the higher end, the index might move towards 23500-23600. On the lower end, profit booking might occur only below 23000,” said Rupak De, senior technical analyst, LKP Securities.

Bank Nifty has also shown bullish momentum, taking support near its 10-day moving average and forming a bullish engulfing candle on the daily chart. It closed near its resistance level, indicating strong buying interest. The key resistance level for Bank Nifty is 50,500, while 49,200 will act as crucial support, said experts. The rupee also traded strong, appreciating by Rs 0.11 to close at 83.40 against the dollar.

This strength is attributed to ongoing capital market gains and a continued buying spree following the general election, with the market showing confidence in the NDA 3.0 government maintaining economic stability, the experts noted.

Science & Environment

Sensex Touches All-Time High, Nifty Up 2% On Announcement…

7 June 2024
by admin

New Delhi: Indian markets continued their upward trend and Sensex touched all-time high after the Reserve Bank of India (RBI) announced on Friday that it would keep policy rates unchanged at 6.5 percent and it became clear that Narendra Modi will again take oath as Prime Minister of India.

The BSE Sensex touched an all-time high, while the Nifty 50 index closed positively at 23,267.75, marking a gain of 446.35 points or 1.96 percent, and hitting a high of 23,320.20. The Sensex followed suit, closing at 76,693.36, up by 1,618.85 points or 2.16 percent. (Also Read: India’s Forex Reserves At Historic High Of $651.5 Bn, CAD To Dip: RBI)

“At the RBI MPC meeting earlier today, the benchmark interest rate was left unchanged, as expected, with a continued focus on inflation. U.S. jobless claims data came in at 229,000, slightly above the expected 220,000. Later today, investors will focus on the U.S. Non-Farm Payrolls and Unemployment Rate data for further insights into Federal Reserve actions” said Shrikant Chouhan, Head equity Research, Kotak Securities (Also Read: RBI Announces UPI Lite Integration With E-Mandate Framework; Now You Can Autofill Your UPI Lite Balance)

Top performers in the Nifty 50 included M&M, Wipro, Tech Mahindra, Bharti Airtel, and Infosys, whereas SBI Life Insurance and Tata Consumer Products experienced losses. Across sectors, all indices showed gains, with the IT sector leading with a 3.37% increase, followed by the Auto, Oil & Gas, Metal, and Realty sectors, each up by more than 2 percent.

During the Monetary Policy announcement, the RBI also revised upwards its FY25 gross domestic product (GDP) forecast to 7.2 percent from the previous 7 percent, boosting investor confidence in Indian markets.

“The anticipation of stability within the coalition government at the center, coupled with the RBI’s upward revision of its growth forecast for FY25 to 7.2%, fuelled a broad-based rally in the domestic market. The Indian market surpassed its previous record high set on exit-poll day and reached a fresh peak. Though the last mile towards the inflation target remains sticky, investors are expecting the MPC to be one step closer to the easing cycle” said Vinod Nair, Head of Research, Geojit Financial Services.

In the broader market, the BSE SmallCap rose by 2.16 per cent, while the BSE MidCap climbed by 1.20 per cent. European shares, on the other hand, opened slightly lower, with the Stoxx 600 index down by 0.1 per cent. Despite this, technology stocks saw gains, while real estate and insurance stocks faced losses due to the European Central Bank’s cautious approach towards rate cuts.

Science & Environment

RBI Governor Shaktikanta Das To Announce Monetary Policy Amid…

7 June 2024
by admin

New Delhi: The Governor of Reserve Bank of India, Shaktikanta Das will address the Monetary Policy at 10am. Following this, there will be post-policy press conference at noon. The Monetary Policy Committee, chaired by Governor Shaktikanta Das has been meeting in Mumbai this week to discuss key policy decisions in a challenging economic landscape.

The central bank’s position on the benchmark interest rate has drawn a lot of attention especially due to ongoing inflation, particularly in the food sector. The RBI’s repo rate, currently held at 6.5 per cent since its last increase in February 2023, is widely anticipated to remain unchanged for the eighth consecutive bi-monthly policy review. (Also Read: RBI Likely To Leave Interest Rates Unchanged)

M Govinda Rao, a member of the Fourteenth Finance Commission and former director of the National Institute of Public Finance and Policy, remarked, “It is widely expected that the MPC will hold the policy rate in the eighth consecutive meeting. The inflation rate, particularly the food inflation continues to be much higher than the target rate of 4 per cent” Inflation Dynamics and Economic Outlook:

Food inflation has been a persistent concern, with urban areas experiencing a 1.03 percent rise and rural areas seeing a 0.59 percent increase in April, leading to a combined national food inflation increase of 0.74 percent. This trend underscores the challenges faced by the central bank in maintaining price stability.

Despite these inflationary pressures, there is optimism surrounding the agricultural sector. The forecast of an above-normal monsoon and expected improvements in agricultural production could help ease food inflation in the coming months. (With ANI Inputs)

Science & Environment

Indias Forex Reserves Decline USD 2 Billion And Come…

2 June 2024
by admin

New Delhi: India’s foreign exchange reserves declined a little over USD 2 billion in the week that ended on May 24, to come off from its all-time high it experienced a week prior. The reserves are now at USD 646.673 billion.

In the previous week, the reserves rose for the third straight week, by USD 4.549 billion to USD 648.700 billion, according to data shared by the Reserve Bank of India (RBI). In the process, they touched a fresh lifetime high.

Preceding those three weeks, the forex kitty had seen three consecutive weeks of decline. According to the latest data released by the Reserve Bank of India (RBI), India’s foreign currency assets (FCA), the biggest component of the forex reserves, declined by USD 1.510 billion to USD 567.499 billion.

Gold reserves during the week declined by USD 482 million to USD 56.713 billion. India’s foreign exchange reserves are now sufficient to cover around 11 months of projected imports, according to a RBI report. (Also Read: FPIs Offloaded Over Rs 25,000 Cr Indian Stocks In May, Turning Net Sellers Second Month)

In the calendar year 2023, the RBI added about USD 58 billion to its foreign exchange kitty. In 2022, India’s forex kitty slumped by USD 71 billion cumulatively. Foreign exchange reserves have risen about USD 28 billion, on a cumulative basis, in 2024 so far.

Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.

The country’s foreign exchange reserves last touched their all-time high in October 2021. Much of the decline after that can be attributed to a rise in the cost of imported goods in 2022. Also, the relative fall in forex reserves could be linked to the RBI’s intervention, from time to time, in the market to defend the uneven depreciation in the rupee against a surging US dollar. (Also Read: RBI Aims To Expand UPI To 20 Countries By 2028-29: RBI’s Annual Report)

Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the sale of dollars, to prevent a steep depreciation in the rupee. The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.

Science & Environment

RBI Imposes Rs 36.38 Lakh Fine On HSBC Ltd…

29 May 2024
by admin

New Delhi: The Reserve Bank of India (RBI) has imposed a penalty of Rs 36.38 lakh on HSBC Limited for violation of directions on reporting requirements under the Liberalised Remittance Scheme of FEMA. The RBI had issued a show-cause notice to the bank, in response to which the bank submitted a written reply and also made oral submissions.

After considering the facts of the case and the bank’s reply in the matter, the RBI came to the conclusion that the violations were substantiated and warranted the imposition of penalty, according to a statement by the central bank. (Also Read: From HDFC To IDFC: 4 Important Credit Card Changes You Need To Know)

The RBI also said that the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. (Also Read: HDFC Bank To Stop SMS Alerts For Small UPI Transactions Starting From THIS Date: Find Out Why)