Bureaucracy tries to erode RBI governor’s powers: Raghuram Rajan

  Former Reserve Bank of India (RBI) governor Raghuram Rajan has reiterated his concerns over the bureaucracy impinging on the powers of the central bank. He has also said it should be made clear that the RBI chief is not just another bureaucrat. “There is a danger in keeping the position (of the RBI governor) ill defined, because the constant effort of the bureaucracy is to whittle down its powers,” the 23rd RBI governor has written in his book, I Do What I Do. “This is not a recent phenomenon…” the former governor has written. “The RBI risks becoming dangerously weakened, as successive governments and finance ministers have misunderstood its role.” “The RBI governor, as the technocrat with the responsibility for the nation’s economic risk management, is not simply another

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DBS gets RBI approval to set up banking subsidiary

  Singapore-based DBS Bank has received in-principal approval by the Reserve Bank (RBI) of India to set up a wholly-owned subsidiary (WOS) in India. It is the second bank to get this approval, preceded by Bank of Mauritius. DBS Bank was among the first to apply for WOS when the RBI had issued guidelines in 2014. DBS Group Chief Executive Officer Piyush Gupta welcomed the delay saying that it gave them time to clear up their books and improve asset quality.  The bank expects to get the final approval within six-eight months, well within the one-year limit. DBS Bank India’s total advances stood at Rs 21,838 crore and total deposits were Rs 26,990 crore as on March 31, 2017.  It wrote off Rs 1,396 crore during the year and the

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RBI Annual Report for the F.Y. 2016-17

  During 2016-17, 762,072 pieces of counterfeit notes were detected in the banking system, of which 95.7 per cent were detected by commercial banks (Table VIII.7). Detection of counterfeit notes was 20.4 per cent higher than the previous year. Barring `100, the detection of counterfeit notes increased across denominations – notably, `500 and `1,000 – during 2016-17 (Table VIII.8). During 2016-17, the National Crime Records Bureau (NCRB), Ministry of Home Affairs designed a uniform proforma for collection of Fake Indian Currency Note (FICN) data. It also developed a web-enabled software for uploading data on FICN detected by banks and law enforcement agencies. The Reserve Bank is facilitating implementation of the system in collaboration with NCRB. A survey-based estimation of FICN carried out by the Reserve Bank is presented in Box

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New notes of Rs. 50 introduced by RBI

  The Reserve Bank of India will shortly issue ₹ 50 denomination banknotes in the Mahatma Gandhi (New) Series, bearing signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India. The new denomination has motif of Hampi with Chariot on the reverse, depicting the country’s cultural heritage. The base colour of the note is Fluorescent Blue. The note has other designs, geometric patterns aligning with the overall colour scheme, both at the obverse and reverse.   All the banknotes in the denomination of ₹ 50/- issued by the Reserve Bank in the earlier series will continue to be legal tender. The image and salient features of ₹ 50 denomination banknote in the Mahatma Gandhi (New) Series are as under: ii Salient Features Obverse (Front) See through register with denominational numeral 50, 2.

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RBI imposes penalty of Rs. 30 million on UBI for KYC norm violations

   Date : Jul 31, 2017 Reserve Bank of India imposes monetary penalty on Union Bank of India The Reserve Bank of India (RBI) has imposed, on July 26, 2017, a monetary penalty of ₹ 10 million on Union Bank of India for non-compliance with the directions issued by RBI on Know Your Customer (KYC) norms. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to certain directions issued by RBI. This 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. Background RBI

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RBI stops printing Rs 2,000 notes; Rs 200 note may hit market next month

  The Reserve Bank of India (RBI) has stopped printing the Rs 2,000 currency notes and will not be bringing new notes of that denomination in the current financial year, according to a Livemint report on Tuesday. Officials of the central bank reportedly told the newspaper that the RBI had also accelerated the process of printing the Rs 200 currency notes. The new notes are expected to start circulating by next month. “About 3.7 billion Rs 2,000 notes, amounting to Rs 7.4 lakh crore, have been printed; that more than compensates for the 6.3 billion Rs 1,000 notes that were withdrawn after demonetization on 8 November 2016,” Livemint said, citing an RBI source. The RBI has reportedly already started printing the first batch of Rs 200 note in June to ensure easy currency availability in the country. In fact a report by SBI even

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RBI still reconciling demonetised notes to avoid reporting errors: Arun Jaitley to Rajya Sabha 

  The Reserve Bank of India is still in the process of reconciling the demonetised Rs 500 and Rs 1,000 currency notes to obviate any errors, finance minster Arun Jaitley has said. In a written reply in Rajya Sabha, Jaitley said the central bank is still completing the counting of specified bank notes (SBNs). “SBNs received are being reconciled to obviate reporting errors and processed for verifying numerical accuracy and authenticity through machines. The progress is being closely monitored,” he stated. The government demonetised high denomination notes on November 8, 2016. Steps have been taken to augment RBI’s machine processing capacity and efforts are afoot to complete the counting of notes “as soon as possible,” FM said. Demonetisation has resulted in “several gains” and the income tax department between November

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Almost resigned from RBI on differences with Chidambaram: Ex-Governor YV Reddy

  As the key figure in the balance of power between the government and the Reserve Bank of India, former RBI Governor Y.V. Reddy once contemplated resignation, and had to even offer an unconditional apology to the minister, his autobiography reveals. In ‘Advice and Dissent: My Life in Public Service’, being released on Tuesday, Reddy, who was RBI Governor between September 2003 and September 2008, describes his differences of opinion with then Finance Minister P. Chidambaram. These led him to also think of putting in his papers. The issue concerned opening the banking system to foreign ownership, which came to a head with Chidambaram in 2008. Reddy narrated his meeting where the Finance Minister told him: “Governor, this is a national commitment made to global financial community. How do we

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RBI defies Supreme Court order, refuses to disclose list of loan defaulters

  The Reserve Bank of India (RBI) has refused to make public the list of loan defaulters with public sector banks despite an order of the Supreme Court in 2015 to make this information public. The case relates to an RTI application filed by activist Subhash Agrawal who had sought to know the list of people who had defaulted in the loan of Rs one crore and above. According to the government, gross non-performing assets (NPA) of the public sector banks stood at Rs 6.06 lakh crore as on December 31, 2016. RBI had denied information citing clauses of economic interests of the state, the commercial confidence and information held in fiduciary capacity. It had also cited the provisions of Section 45-E of the RBI Act, 1934 which prohibits disclosure

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Bad loans crisis: RBI to expand oversight committee, rating agencies role

  Staying on course to resolve the bad loan problem plaguing the banking sector, the Reserve Bank of India (RBI) outlined the further steps it plans to take, such as expanding the oversight committee (OC) and its mandate, modifying existing debt recast rules, and engaging rating agencies for timely action. The central bank will reconstitute the OC and expand the panel to include more members. The existing OC, which has two members, was constituted by the Indian Banks’ Association. The RBI will now reconstitute the OC under its aegis and the two current members will continue in the revamped panel. The larger OC could then set up benches to deal with the volume of cases referred. The RBI will also expand the scope of cases to be referred to the OC beyond those under S4A (Scheme for Sustainable

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