The Reserve Bank of India (RBI) on Monday late night said that the general public has withdrawn Rs 2.16 lakh crore from their accounts since beginning of demonetisation on November 9, 2016.

RBI further said that deposits in bank accounts during this period, amounted to Rs 8.11 lakh crore. Interestingly, Government had told the Supreme Court earlier this month that it expects around Rs 10-11 lakh crore to be deposited in banks till December 30, 2016 &ndash; the last day of depositing the now illegal tender of Rs 500 and Rs 1000 notes.

However, the long queues and frequent running out of cash has ensured that nearly 50% of this total currency (Rs 14 lakh crore) has already been deposited in banks in two weeks.

Moreover, there has been a sudden surge in deposits with Jan Dhan Accounts.

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<h5>As on November 9, the Government claimed that the 25.5 crore accounts opened under Jan-Dhan Yojana (PMJDY) garnered Rs 45,636.61 crore. The number of accounts now stand at 25.68 crore while deposits have risen to Rs 72,834.72 crore.</h5>
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PM Modi and Finance Minister Arun Jaitley have been pushing citizens towards a more &#39;less-cash&#39; economy. The Government, on Monday, removed excise duty on &#39;point of sale&#39; machines in order to expedite use of digital currency than hard cash.&nbsp;

However, with over Rs 2 lakh crore withdrawn in two weeks from the Rs 8.11 lakh deposited, it is amply clear that Indians are still not ready to go completely cash-less.&nbsp;

On the evening of November 8, Prime Minister Narendra Modi in a televised address said that nearly 86% of Rs 16 lakh crore that oiled the Indian economy by way of Rs 500 and Rs 1000 notes were illegal tender from midnight.

He said that citizens have&nbsp;50 days to deposit this old currency in banks, exchange it with new or withdraw through ATMs, etc.

The RBI on Monday released data that showed nearly 50% of all demonetised currency in Rs 500 and Rs 1000 notes has been deposited with banks

The Reserve Bank of India (RBI) on Monday late night said that the general public has withdrawn Rs 2.16 lakh crore from their accounts since beginning of demonetisation on November 9, 2016. RBI further said that deposits in bank accounts during this period, amounted to Rs 8.11 lakh crore. Interestingly, Government had told the Supreme Court earlier this month that it expects around Rs 10-11 lakh crore to be deposited in banks till December 30, 2016 – the last day of depositing the now illegal tender of Rs 500 and Rs 1000 notes. However, the long queues and frequent running out of cash has ensured that nearly 50% of this total currency (Rs 14 lakh crore) has already been deposited in banks in two weeks. Moreover, there has been a sudden surge in deposits with Jan Dhan Accounts. As on November 9, the Government claimed that the 25.5 crore accounts opened under Jan-Dhan Yojana (PMJDY) garnered Rs 45,636.61 crore. The number of accounts now stand at 25.68 crore while deposits have risen to Rs 72,834.72 crore. × PM Modi and Finance Minister Arun Jaitley have been pushing citizens towards a more 'less-cash' economy. The Government, on Monday, removed excise duty on 'point of sale' machines in order to expedite use of digital currency than hard cash. However, with over Rs 2 lakh crore withdrawn in two weeks from the Rs 8.11 lakh deposited, it is amply clear that Indians are still not ready to go completely cash-less. On the evening of November 8, Prime Minister Narendra Modi in a televised address said that nearly 86% of Rs 16 lakh crore that oiled the Indian economy by way of Rs 500 and Rs 1000 notes were illegal tender from midnight. He said that citizens have 50 days to deposit this old currency in banks, exchange it with new or withdraw through ATMs, etc.

Demonetisation: Indians withdrew over 2 lakh crore since November 9

The Indian government today said sufficient cash is available with the Reserve Bank of India (RBI) and banks, and it is not considering extending the deadline of December 30 for deposit of invalid&nbsp;500 and&nbsp;1,000 rupee notes.

The statement was made in the Rajya Sabha even as people queued up at banks to deposit old high-value notes and withdraw new cash.

&quot;There is sufficient cash available with the Reserve Bank of India and banks. Circulation of notes in respect of Rs 100 has already been increased,&quot; minister of state for finance Arun Ram Meghwal said in a written reply.

On whether the December 30 deadline will be extended, he said, &quot;No such proposal for extension of deadline beyond December 30, 2016, is presently under consideration of the government.&quot;

To cater to the requirements of rural areas, banks have been advised to supply notes of smaller denominations (Rs 100 and less), Meghwal added.

As on November 8, the day demonetisation was announced, there were 1,716.50 crore pieces of Rs 500 and 685.80 crore of Rs 1,000 notes in circulation.

To another question, minister of state for finance Santosh Kumar Gangwar said RBI advises banks from time to time to enhance security arrangements at their branches and ATMs.

This includes coverage of ATM sites by CCTVs and ensuring adequate training of security staff posted there.

Banks have also been advised to review and strengthen the security arrangements in their branches/ATMs to deal with instances of robberies and risk perceptions emerging from such incidents.&nbsp;

(PTI)&nbsp;

The statement was made in the Rajya Sabha even as people queued up at banks to deposit old high value notes and withdraw new cash

The Indian government today said sufficient cash is available with the Reserve Bank of India (RBI) and banks, and it is not considering extending the deadline of December 30 for deposit of invalid 500 and 1,000 rupee notes. The statement was made in the Rajya Sabha even as people queued up at banks to deposit old high-value notes and withdraw new cash. "There is sufficient cash available with the Reserve Bank of India and banks. Circulation of notes in respect of Rs 100 has already been increased," minister of state for finance Arun Ram Meghwal said in a written reply. On whether the December 30 deadline will be extended, he said, "No such proposal for extension of deadline beyond December 30, 2016, is presently under consideration of the government." To cater to the requirements of rural areas, banks have been advised to supply notes of smaller denominations (Rs 100 and less), Meghwal added. As on November 8, the day demonetisation was announced, there were 1,716.50 crore pieces of Rs 500 and 685.80 crore of Rs 1,000 notes in circulation. To another question, minister of state for finance Santosh Kumar Gangwar said RBI advises banks from time to time to enhance security arrangements at their branches and ATMs. This includes coverage of ATM sites by CCTVs and ensuring adequate training of security staff posted there. Banks have also been advised to review and strengthen the security arrangements in their branches/ATMs to deal with instances of robberies and risk perceptions emerging from such incidents. (PTI)

Demonetisation: Indian government will not extend December 30 deadline for cash deposits

The government is considering increasing the amount of bonds issued under the so-called market stabilisation scheme (MSS) to drain out excess cash from the banking system, economic affairs secretary Shaktikanta Das said on Monday.

The government will study a current central bank proposal to increase the limit of MSS bonds issued this year and will take a decision accordingly, Das told reporters in New Delhi.

India has budgeted the issuance of 200 billion rupees ($2.91 billion) of MSS bonds in the year ending in March.&nbsp;

Banks have been flush with deposits after the government abolished 500 and 1,000 rupee notes earlier this month, forcing the RBI on Saturday to temporarily increase the amount of funds banks must deposit under the cash reserve ratio.&nbsp;

RBI Governor Urjit Patel on Sunday said the measure to raise CRR would be reviewed once the government issues more MSS bonds, Press Trust of India reported in a story carried by several local media.&nbsp; 
 
(Reuters)

The government will study an RBI proposal to increase limit of MSS bonds issued this year, economic affairs secretary Shaktikanta Das said

The government is considering increasing the amount of bonds issued under the so-called market stabilisation scheme (MSS) to drain out excess cash from the banking system, economic affairs secretary Shaktikanta Das said on Monday. The government will study a current central bank proposal to increase the limit of MSS bonds issued this year and will take a decision accordingly, Das told reporters in New Delhi. India has budgeted the issuance of 200 billion rupees ($2.91 billion) of MSS bonds in the year ending in March. Banks have been flush with deposits after the government abolished 500 and 1,000 rupee notes earlier this month, forcing the RBI on Saturday to temporarily increase the amount of funds banks must deposit under the cash reserve ratio. RBI Governor Urjit Patel on Sunday said the measure to raise CRR would be reviewed once the government issues more MSS bonds, Press Trust of India reported in a story carried by several local media. (Reuters)

Demonetisation: Government considers issuing bonds under market stabilisation scheme

The rupee crashed to a near&nbsp;39-month low of 68.84, plummeting by another 27&nbsp;paise against the US dollar in early trade today, close to surpassing its previous record low of 68.85 on&nbsp;August 28, 2013.&nbsp;

Demonetisation and outflows from emerging markets have hit the rupee hard this month, causing the Reserve Bank of India to intervene in the foreign exchange market.&nbsp;

Forex dealers said besides strong month-end demand for the dollar from importers, continued capital outflows by foreign funds and the dollar&#39;s bull run on an imminent hike in the Fed&#39;s interest rates weighed heavily on the rupee.

Further, a lower opening of the domestic equity market also put pressure on the rupee, they said.

The rupee had shed 31 paise to close at a new nine-month low of 68.56 against the dollar yesterday.

The Indian currency shrunk 2.92 per cent since Donald Trump&#39;s victory in the US Presidential polls earlier this month.

A huge outflow of capital by foreign investors has been weakening the rupee as they apprehend an impact on the economy in the short-term following the India&#39;s move to demonetise Rs 500 and Rs 1,000 banknotes.

Surging US bond yields and a strong dollar overseas are also contributing to the rupee&#39;s fall.

Meanwhile, the BSE Sensex fell by 145.97 points, or 0.56 per cent, to 25,905.84 points in early trade.

(PTI)&nbsp;

The previous record low was 68.85 on?August 28, 2013

The rupee crashed to a near 39-month low of 68.84, plummeting by another 27 paise against the US dollar in early trade today, close to surpassing its previous record low of 68.85 on August 28, 2013. Demonetisation and outflows from emerging markets have hit the rupee hard this month, causing the Reserve Bank of India to intervene in the foreign exchange market. Forex dealers said besides strong month-end demand for the dollar from importers, continued capital outflows by foreign funds and the dollar's bull run on an imminent hike in the Fed's interest rates weighed heavily on the rupee. Further, a lower opening of the domestic equity market also put pressure on the rupee, they said. The rupee had shed 31 paise to close at a new nine-month low of 68.56 against the dollar yesterday. The Indian currency shrunk 2.92 per cent since Donald Trump's victory in the US Presidential polls earlier this month. A huge outflow of capital by foreign investors has been weakening the rupee as they apprehend an impact on the economy in the short-term following the India's move to demonetise Rs 500 and Rs 1,000 banknotes. Surging US bond yields and a strong dollar overseas are also contributing to the rupee's fall. Meanwhile, the BSE Sensex fell by 145.97 points, or 0.56 per cent, to 25,905.84 points in early trade. (PTI)

Rupee near all-time low, tumbles 27 paise to 68.84

The&nbsp;Reserve Bank of India (RBI) may cut repo and reverse repo rate owing to the rise in new&nbsp;deposits with the banks at the back&nbsp;of demonetisation.&nbsp;

While the central bank could cut its repo rate, the rate at which RBI&nbsp;lends to banks; there could also be a cut in the&nbsp;reverse repo rate&nbsp;as the banks are most likely to park their additional liquidity with the RBI.

In the reverse repo, banks park their excess funds with the RBI in exchange for government bonds. The reverse repo rate is the interest&nbsp;rate that the banks earn from the RBI on these funds.

Deflationary pressures&nbsp;could cloud the economy in the short term; the effects of which can be disruptive for the economy. With that in mind, the monetary policy committe may cut the&nbsp;repo and reverse repo rate&nbsp;at its December 6th meeting.

Various data records show that banks have received deposits of around 5.12 trillion rupees between November 10 and 18.

The &nbsp;current repo rate stands at 6.25 per cent as on October 4, down 25 basis points while the reverse repo rate currently stands at 5.75 per cent.

 
(WION)

 
&nbsp;

The near-term deflation could cloud the economy in the short term; the effects of which can be disruptive for the economy

The Reserve Bank of India (RBI) may cut repo and reverse repo rate owing to the rise in new deposits with the banks at the back of demonetisation. While the central bank could cut its repo rate, the rate at which RBI lends to banks; there could also be a cut in the reverse repo rate as the banks are most likely to park their additional liquidity with the RBI. In the reverse repo, banks park their excess funds with the RBI in exchange for government bonds. The reverse repo rate is the interest rate that the banks earn from the RBI on these funds. Deflationary pressures could cloud the economy in the short term; the effects of which can be disruptive for the economy. With that in mind, the monetary policy committe may cut the repo and reverse repo rate at its December 6th meeting. Various data records show that banks have received deposits of around 5.12 trillion rupees between November 10 and 18. The current repo rate stands at 6.25 per cent as on October 4, down 25 basis points while the reverse repo rate currently stands at 5.75 per cent. (WION)

Demonetisation: Reserve Bank of India may cut repo rates due to new?deposits with banks

Further relaxing cash withdrawal norms, the Reserve Bank of India has said that overdraft and cash credit account holders can now withdraw up to Rs 50,000 in a week.

Earlier, current account holders were allowed to withdraw up to Rs 50,000 in cash, in a week.&nbsp;

&quot;On a review, it has been decided to extend this facility to overdraft and cash credit accounts also,&quot; the central bank said.&nbsp;

Accordingly, holders of current/overdraft/cash credit accounts, which are operational for the last three months or more, may now withdraw up to Rs 50,000 in cash, in a week.&nbsp;

However, this enhanced limit for weekly withdrawal is not applicable for personal overdraft accounts.&nbsp;

The Reserve Bank further said the Rs 50,000 withdrawals may be disbursed predominantly in Rs 2,000 denomination bank notes.

Government has taken several decisions to ease withdrawal restrictions for farmers, small traders, Group &#39;C&#39; employees of Central Government including equivalent levels in the defence and paramilitary forces, railways and CPSEs in the aftermath of the cancellation of the legal tender character of the old Rs 500 and Rs 1,000 notes.

(PTI)

Earlier, current account holders were allowed to withdraw up to Rs 50,000 in cash, in a week

Further relaxing cash withdrawal norms, the Reserve Bank of India has said that overdraft and cash credit account holders can now withdraw up to Rs 50,000 in a week. Earlier, current account holders were allowed to withdraw up to Rs 50,000 in cash, in a week. "On a review, it has been decided to extend this facility to overdraft and cash credit accounts also," the central bank said. Accordingly, holders of current/overdraft/cash credit accounts, which are operational for the last three months or more, may now withdraw up to Rs 50,000 in cash, in a week. However, this enhanced limit for weekly withdrawal is not applicable for personal overdraft accounts. The Reserve Bank further said the Rs 50,000 withdrawals may be disbursed predominantly in Rs 2,000 denomination bank notes. Government has taken several decisions to ease withdrawal restrictions for farmers, small traders, Group 'C' employees of Central Government including equivalent levels in the defence and paramilitary forces, railways and CPSEs in the aftermath of the cancellation of the legal tender character of the old Rs 500 and Rs 1,000 notes. (PTI)

Reserve Bank of India allows Rs 50,000 a week withdrawal from overdraft accounts

The Reserve Bank of India on Monday relaxed rules for classifying bad loans for small borrowers saying they may need more time to repay their loan dues after the government withdrew higher-value banknotes of Rs 500 and Rs 1000.

Banks and other financiers will get an additional 60 days for recognising certain loans of up to 10 million rupees ($146,800) as substandard, the RBI said in a notification.

The above relaxation is available to entities running working capital accounts with any bank with the sanctioned limit of Rs 1 crore or less, PTI reported.

Term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get benefit of this relaxation.&nbsp;

This will also include housing loans and agriculture loans, it said.

The relaxation will apply to dues payable between November 1 and December 31, said a Reuters report.

The demonetisation of higher value currency notes has affected normal banking activities including clearing of cheques. Besides, borrowers are unable to get payments from their creditors due to various restrictions including cash withdrawal limit of Rs 24,000 (USD 352) per week, limiting their options to repay their dues.&nbsp; 
 
(WION with inputs from agencies)

Banks and other financiers will get the extension for car, housing, farm and other loans of up to Rs 10 million (USD 146,800)

The Reserve Bank of India on Monday relaxed rules for classifying bad loans for small borrowers saying they may need more time to repay their loan dues after the government withdrew higher-value banknotes of Rs 500 and Rs 1000. Banks and other financiers will get an additional 60 days for recognising certain loans of up to 10 million rupees ($146,800) as substandard, the RBI said in a notification. The above relaxation is available to entities running working capital accounts with any bank with the sanctioned limit of Rs 1 crore or less, PTI reported. Term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get benefit of this relaxation. This will also include housing loans and agriculture loans, it said. The relaxation will apply to dues payable between November 1 and December 31, said a Reuters report. The demonetisation of higher value currency notes has affected normal banking activities including clearing of cheques. Besides, borrowers are unable to get payments from their creditors due to various restrictions including cash withdrawal limit of Rs 24,000 (USD 352) per week, limiting their options to repay their dues. (WION with inputs from agencies)

Demonetisation: Reserve Bank of India grants 60-day repayment relief to small loan borrowers

Chief ministers Arvind Kejriwal and Mamata Banerjee held a protest outside Reserve Bank of India in Delhi on Thursday, press Trust of India reported.

The AAP chief asked the government to roll back demonetisation in three days while the TMC supremo said such a crisis was not seen even during Emergency.

Addressing a rally in Delhi, Kejriwal alleged that demonetisation was the &quot;biggest scam&quot; in independent India&#39;s history while Banerjee said Modi should not run the country through &quot;dictatorship&quot;, calling the protest a fight to save the country.

The Delhi chief minister alleged that demonetisation was being carried out to write-off around $118 billion (Rs 8 lakh crore) of loan owed by Modi&#39;s &quot;corporate friends&quot; by collecting about $147 billion (Rs 10 lakh crore) from the people through the exercise.

&quot;Black money is flooding the market again. Notes are being home delivered to some people. This is independent India&#39;s biggest scam. The government wants to amass $147 billion by forcing the people to deposit their money in banks and use that amount to write off loans of Modiji&#39;s friends.

&quot;Modiji sent Vijay Mallya, who has huge debt, to London one night. He has also brought people to the streets (following demonetisation). People are being cheated. Why did IT not raid former BJP Minister G Janardana Reddy who spent Rs 500 crores ($5 billion) in his daughter&#39;s wedding? And they want us common people to spend Rs 2.5 lakh ($3686) in a wedding,&quot; he said.

Kejriwal also took a dig at finance minister Arun Jaitley wondering if he spent only Rs 2.5 lakh ($3686) in his daughter&#39;s wedding recently.

&quot;Modiji, do not fool people saying standing in line is patriotism. Who is responsible for the death of 40 people standing in queues?&quot; he said, addressing traders at Azadpur wholesale fruit and vegetable market.

(PTI)

AAP chief demanded the roll back of demonetisation in three days while Banerjee said such a crisis was not seen even during Emergency

Chief ministers Arvind Kejriwal and Mamata Banerjee held a protest outside Reserve Bank of India in Delhi on Thursday, press Trust of India reported. The AAP chief asked the government to roll back demonetisation in three days while the TMC supremo said such a crisis was not seen even during Emergency. Addressing a rally in Delhi, Kejriwal alleged that demonetisation was the "biggest scam" in independent India's history while Banerjee said Modi should not run the country through "dictatorship", calling the protest a fight to save the country. The Delhi chief minister alleged that demonetisation was being carried out to write-off around $118 billion (Rs 8 lakh crore) of loan owed by Modi's "corporate friends" by collecting about $147 billion (Rs 10 lakh crore) from the people through the exercise. "Black money is flooding the market again. Notes are being home delivered to some people. This is independent India's biggest scam. The government wants to amass $147 billion by forcing the people to deposit their money in banks and use that amount to write off loans of Modiji's friends. "Modiji sent Vijay Mallya, who has huge debt, to London one night. He has also brought people to the streets (following demonetisation). People are being cheated. Why did IT not raid former BJP Minister G Janardana Reddy who spent Rs 500 crores ($5 billion) in his daughter's wedding? And they want us common people to spend Rs 2.5 lakh ($3686) in a wedding," he said. Kejriwal also took a dig at finance minister Arun Jaitley wondering if he spent only Rs 2.5 lakh ($3686) in his daughter's wedding recently. "Modiji, do not fool people saying standing in line is patriotism. Who is responsible for the death of 40 people standing in queues?" he said, addressing traders at Azadpur wholesale fruit and vegetable market. (PTI)

Demonetisation: Arvind Kejriwal, Mamata Banerjee protest outside Reserve Bank of India

The Reserve Bank of India (RBI) on Sunday urged the public&nbsp;to not hoard money following the government&#39;s decision to withdraw large denomination notes in an attempt to expose undeclared wealth.

With long queues outside banks across the country for exchanging 500 and 1,000 rupee notes that the government abolished in a decision made Tuesday evening, the government has urged people to&nbsp;keep calm.

The government also today announced that the cash withdrawal limit will now be increased from Rs 2,000 to Rs 2,500 per transaction.

The banned denominations made up more than 80 per cent of the currency in circulation, Reuters reported.

The RBI has, however, stated that small denomination currency notes were available with both the central bank and with other lenders and hence there was no reason to panic.

Meanwhile, Mamata Banerjee, chief minister of India&#39;s eastern state of West Bengal called the situation &quot;nothing short of an emergency&quot;.

&quot;I have never seen such a thing. People have money in their accounts but can&#39;t access it. They can&#39;t pay for treatment of a family member in hospital, weddings have been put on hold, daily business has taken a beating,&quot; Reuters reported her as saying.

Indian Prime Minister Narendra Modi&#39;s said that the move was also aimed at curbing illegal political donations that fund India&#39;s elections.

Current 500&nbsp;and 1,000-rupee notes can be redeemed at banks and post offices until December&nbsp;30.

(WION with inputs from Reuters)

Thousands of people were again standing outside banks across the country trying to change 500 and 1,000 rupee bills the government abolished

The Reserve Bank of India (RBI) on Sunday urged the public to not hoard money following the government's decision to withdraw large denomination notes in an attempt to expose undeclared wealth. With long queues outside banks across the country for exchanging 500 and 1,000 rupee notes that the government abolished in a decision made Tuesday evening, the government has urged people to keep calm. The government also today announced that the cash withdrawal limit will now be increased from Rs 2,000 to Rs 2,500 per transaction. The banned denominations made up more than 80 per cent of the currency in circulation, Reuters reported. The RBI has, however, stated that small denomination currency notes were available with both the central bank and with other lenders and hence there was no reason to panic. Meanwhile, Mamata Banerjee, chief minister of India's eastern state of West Bengal called the situation "nothing short of an emergency". "I have never seen such a thing. People have money in their accounts but can't access it. They can't pay for treatment of a family member in hospital, weddings have been put on hold, daily business has taken a beating," Reuters reported her as saying. Indian Prime Minister Narendra Modi's said that the move was also aimed at curbing illegal political donations that fund India's elections. Current 500 and 1,000-rupee notes can be redeemed at banks and post offices until December 30. (WION with inputs from Reuters)

No need to be anxious, enough cash available, assures RBI

Last week, when India&#39;s central bank ordered banks to issue more 100 rupee notes, no one had a clue that it was a precursor to one of Prime Minister Narendra Modi&#39;s boldest economic announcements - the sudden withdrawal of 500 and 1,000 rupee notes ($7.50, $15) from circulation.

It now emerges that the assault against black money was carefully planned over six months by a coterie of PM Modi&#39;s advisors sworn to secrecy, AFP reports. Only a handful of India&#39;s 1.25 billion people - finance minister Arun Jaitley, Reserve Bank of India governor and a few close officials --- were in the loop until the very last minute, AFP quotes Indian media as saying.

Behind-the-scenes: How the operation played out

The Times of India reported that many of Modi&#39;s ministers were only briefed on the plan at a cabinet meeting in New Delhi just before he addressed the nation. They were then not allowed to leave until he had finished his speech to prevent any unwanted leak.

Meanwhile, in India&#39;s commercial capital of Mumbai, RBI&#39;s bank heads had been called to the central bank in the morning to receive a locked currency chest which they were told contained notes of the new 2,000 rupee denomination.&nbsp;The chests were standard procedure for the issuing of new notes, a spokesperson for the RBI told AFP.

The RBI heads were under strict instructions not to open the chest or speak about it until later that night, a report in Mint newspaper says. It was only when they opened it, as Modi was speaking, that they learnt about the new 500 note.

With the glare of the world on the US election, Modi chose to deliver his bombshell announcement in a rare address to the nation barely three hours before the order to close banks and ATMs came into force. People scrambled to withdraw Rs 100 &nbsp;notes to meet the midnight deadline set by the RBI.

Once the queues had trudged away from the millions of ATMs around the country with now precious 100 rupee bills, the task began of refilling the machines with the new currency. Trucks laden with cash started delivering the notes across the country.

&quot;If secrecy had failed people would have invested most of their cash in Hawala rackets, gold or real estate before the announcement, worsening the black money issue,&quot; Paras Savla of Mumbai-based investment management firm KPB &amp; Associates told AFP.

RBI chief Urjit Patel has said production of the new notes had been &quot;ramped up&quot; to meet requirements but Pradip Shah, who helped set up India&#39;s HDFC bank, said it would be a &quot;nightmare&quot; getting money to some rural areas.&nbsp;&quot;A lot of people are going to be inconvenienced,&quot; he told AFP.

The move is part of Modi&#39;s crackdown on so-called black money financial transactions in which cash is used to avoid tax. After closing for a day banks started reissuing new 500 notes and a new denomination of 2,000 rupees on Thursday.

The AFP reports that by spring, the prime minister was convinced that he needed a headline-grabbing reform to show his determination to counter rampant tax evasion and settled on scrapping the two highest denomination bills.

Almost 90 percent of transactions in India are done with cash while 500 and 1,000 notes currently account for more than 85 per cent of the value of cash in circulation, according to research firm Capital Economics.

(WION with inputs from AFP) 
&nbsp;

Only a select few were aware of the Indian prime minister's audacious plan to issue new notes beforehand

Last week, when India's central bank ordered banks to issue more 100 rupee notes, no one had a clue that it was a precursor to one of Prime Minister Narendra Modi's boldest economic announcements - the sudden withdrawal of 500 and 1,000 rupee notes ($7.50, $15) from circulation. It now emerges that the assault against black money was carefully planned over six months by a coterie of PM Modi's advisors sworn to secrecy, AFP reports. Only a handful of India's 1.25 billion people - finance minister Arun Jaitley, Reserve Bank of India governor and a few close officials --- were in the loop until the very last minute, AFP quotes Indian media as saying. Behind-the-scenes: How the operation played out The Times of India reported that many of Modi's ministers were only briefed on the plan at a cabinet meeting in New Delhi just before he addressed the nation. They were then not allowed to leave until he had finished his speech to prevent any unwanted leak. Meanwhile, in India's commercial capital of Mumbai, RBI's bank heads had been called to the central bank in the morning to receive a locked currency chest which they were told contained notes of the new 2,000 rupee denomination. The chests were standard procedure for the issuing of new notes, a spokesperson for the RBI told AFP. The RBI heads were under strict instructions not to open the chest or speak about it until later that night, a report in Mint newspaper says. It was only when they opened it, as Modi was speaking, that they learnt about the new 500 note. With the glare of the world on the US election, Modi chose to deliver his bombshell announcement in a rare address to the nation barely three hours before the order to close banks and ATMs came into force. People scrambled to withdraw Rs 100 notes to meet the midnight deadline set by the RBI. Once the queues had trudged away from the millions of ATMs around the country with now precious 100 rupee bills, the task began of refilling the machines with the new currency. Trucks laden with cash started delivering the notes across the country. "If secrecy had failed people would have invested most of their cash in Hawala rackets, gold or real estate before the announcement, worsening the black money issue," Paras Savla of Mumbai-based investment management firm KPB & Associates told AFP. RBI chief Urjit Patel has said production of the new notes had been "ramped up" to meet requirements but Pradip Shah, who helped set up India's HDFC bank, said it would be a "nightmare" getting money to some rural areas. "A lot of people are going to be inconvenienced," he told AFP. The move is part of Modi's crackdown on so-called black money financial transactions in which cash is used to avoid tax. After closing for a day banks started reissuing new 500 notes and a new denomination of 2,000 rupees on Thursday. The AFP reports that by spring, the prime minister was convinced that he needed a headline-grabbing reform to show his determination to counter rampant tax evasion and settled on scrapping the two highest denomination bills. Almost 90 percent of transactions in India are done with cash while 500 and 1,000 notes currently account for more than 85 per cent of the value of cash in circulation, according to research firm Capital Economics. (WION with inputs from AFP)

India's rupee shake-up: A behind-the-scenes report

Huge rush and long serpentine queues were witnessed on Thursday at banks in India, which opened today after a day&#39;s break, as people jostled to exchange their 500- and 1,000-rupee notes for lower denomination bills to be able to pay for their basic needs.

With ATMs also shutting down soon after Indian Prime Minister Narendra Modi on Tuesday night announced the&nbsp;withdrawal of 500- and 1,000-rupee notes from circulation in a bid to flush out black money, citizens queued at banks to get the limited quota of cash that they are initially entitled to.

Only a few ATMs were working and most of them will be back in operation only tomorrow after the tedious job of removing the now-defunct bank notes and replacing them with lower denomination bills and new hard-to-fake Rs 500 and Rs 2,000 notes is completed.

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People complained of having to wait for a long time before they could replace old higher denomination notes or withdraw from their bank accounts using pay-in slips or cheques.

Besides banks, select post offices were also replacing old high denomination (OHD) currency notes of Rs 500 and Rs 1,000 with new Rs 2,000 banknotes.

People seemed excited after getting new Rs 2,000 notes from banks and clicked pictures holding the new banknotes in their hands.

Some, however, complained of the restrictions placed on exchanging OHD and withdrawals from the banks. Many felt the government should have done all preparations, including stocking ATMs, before announcing the decision.

Only a maximum of Rs 4,000 per person in cash irrespective of the size of the&nbsp;tender was being given per person after submission of valid identity proof. Anything over and above this value was credited to bank account.

Banks set up additional counters to change cash as also allow withdrawal from bank accounts through cheque or withdrawal slips with a ceiling of Rs 10,000 in a day within an overall limit of Rs 20,000 in a week (including withdrawals from ATMs) up to November 24.

Once the ATMs are fully functional, withdraw up to a maximum of Rs 2,000 per card per day up to November 18, 2016 will be allowed. The limit will be raised to Rs 4,000 per day per card from November 19, 2016 onwards, bankers said.

Banks have been ordered to remain open on the weekend as well as function late till 9 PM for three days beginning today to deal with the huge rush.

(PTI)

People jostled to exchange their 500- and 1,000-rupee notes for lower denomination bills

Huge rush and long serpentine queues were witnessed on Thursday at banks in India, which opened today after a day's break, as people jostled to exchange their 500- and 1,000-rupee notes for lower denomination bills to be able to pay for their basic needs. With ATMs also shutting down soon after Indian Prime Minister Narendra Modi on Tuesday night announced the withdrawal of 500- and 1,000-rupee notes from circulation in a bid to flush out black money, citizens queued at banks to get the limited quota of cash that they are initially entitled to. Only a few ATMs were working and most of them will be back in operation only tomorrow after the tedious job of removing the now-defunct bank notes and replacing them with lower denomination bills and new hard-to-fake Rs 500 and Rs 2,000 notes is completed. People are initially allowed to exchange only a limited amount of currency × People complained of having to wait for a long time before they could replace old higher denomination notes or withdraw from their bank accounts using pay-in slips or cheques. Besides banks, select post offices were also replacing old high denomination (OHD) currency notes of Rs 500 and Rs 1,000 with new Rs 2,000 banknotes. People seemed excited after getting new Rs 2,000 notes from banks and clicked pictures holding the new banknotes in their hands. Some, however, complained of the restrictions placed on exchanging OHD and withdrawals from the banks. Many felt the government should have done all preparations, including stocking ATMs, before announcing the decision. Only a maximum of Rs 4,000 per person in cash irrespective of the size of the tender was being given per person after submission of valid identity proof. Anything over and above this value was credited to bank account. Banks set up additional counters to change cash as also allow withdrawal from bank accounts through cheque or withdrawal slips with a ceiling of Rs 10,000 in a day within an overall limit of Rs 20,000 in a week (including withdrawals from ATMs) up to November 24. Once the ATMs are fully functional, withdraw up to a maximum of Rs 2,000 per card per day up to November 18, 2016 will be allowed. The limit will be raised to Rs 4,000 per day per card from November 19, 2016 onwards, bankers said. Banks have been ordered to remain open on the weekend as well as function late till 9 PM for three days beginning today to deal with the huge rush. (PTI)

India: Huge rush, serpentine queues seen at banks

In the wake of&nbsp;one of the country&#39;s largest-ever cyber security incidents, the Reserve Bank of India (RBI) said it met with senior officials from select banks, the National Payment Corporation of India and card network operators.&nbsp;

&nbsp;

A slew of banks in India are replacing or asking their customers to change security codes of as many as 3.25 million debit cards over&nbsp;fears that the card data may have been stolen, international news agency Reuters reported.&nbsp;

&nbsp;

The meeting was held&nbsp;to review the steps taken by various agencies to contain any adverse fallout, the RBI, adding that the number of cards misused, as per currently available information, was few.

&nbsp;

(WION with inputs from Reuters)&nbsp;

Media reports suggest around 3.2 million debit cards were compromised in of the country's largest-ever cyber security incidents

In the wake of one of the country's largest-ever cyber security incidents, the Reserve Bank of India (RBI) said it met with senior officials from select banks, the National Payment Corporation of India and card network operators. A slew of banks in India are replacing or asking their customers to change security codes of as many as 3.25 million debit cards over fears that the card data may have been stolen, international news agency Reuters reported. The meeting was held to review the steps taken by various agencies to contain any adverse fallout, the RBI, adding that the number of cards misused, as per currently available information, was few. (WION with inputs from Reuters)

India's central bank meets officials after debit card security breach

Indian banks&#39; loans rose 10.4 per cent in the two weeks to September 30 from a year earlier, while deposits rose 11.3 per cent, the Reserve Bank of India&#39;s weekly statistical supplement showed on Friday.

Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30. Non-food credit rose 2.21 trillion Indian Rupees to 74.35 trillion Rupees, while food credit fell 105.30 billion Indian Rupees to 854.60 billion Rupees.

Bank deposits rose 3.52 trillion Indian Rupees to 101.43 trillion Rupees in the two weeks to September 30.

(Reuters)

Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30

Indian banks' loans rose 10.4 per cent in the two weeks to September 30 from a year earlier, while deposits rose 11.3 per cent, the Reserve Bank of India's weekly statistical supplement showed on Friday. Outstanding loans rose 2.11 trillion Indian Rupees ($31.56 billion) to 75.21 trillion Rupees in the two weeks to September 30. Non-food credit rose 2.21 trillion Indian Rupees to 74.35 trillion Rupees, while food credit fell 105.30 billion Indian Rupees to 854.60 billion Rupees. Bank deposits rose 3.52 trillion Indian Rupees to 101.43 trillion Rupees in the two weeks to September 30. (Reuters)

Indian banks' loans rose 10.4 per cent in two weeks to September 30 : Reserve Bank of India

The Reserve Bank of India (RBI) will announce its monetary policy review today. It will be announced in the afternoon at 2.30 pm IST against the existing practice of 11 am.

This will be Urjit Patel&#39;s maiden policy announcement as RBI Governor. Unlike his predecessor Raghuram Rajan who had the final say on interest rate cut decisions, Patel will have to go by the advice of a newly set up six-member monetary policy committee (MPC).

This is the first time that decision&nbsp;making on interest rates will shift to the six-member panel which has equal representation from the RBI and the government.

Since January last year, the RBI has cut the repo rate - the rate at which RBI lends to banks - five times.

India&#39;s retail inflation has touched a five-month low of 5.05 per cent in August, triggering hopes of a rate cut. The RBI and the government have set a retail inflation target of four percent for the next five years with an upper tolerance level of six percent and lower limit of two per cent.

Most analysts expect a status quo on rates. Mounting bad loans will remain another focus area of Patel&#39;s debut policy review.

Rajan has set a deadline of March 2017 for banks to clean up their balance sheets.

Patel has to ensure that there is no let-up on this cut-off date.

(ANI)

For the first time, decision making on interest rates will shift to a newly set up six-member monetary policy committee (MPC)

The Reserve Bank of India (RBI) will announce its monetary policy review today. It will be announced in the afternoon at 2.30 pm IST against the existing practice of 11 am. This will be Urjit Patel's maiden policy announcement as RBI Governor. Unlike his predecessor Raghuram Rajan who had the final say on interest rate cut decisions, Patel will have to go by the advice of a newly set up six-member monetary policy committee (MPC). This is the first time that decision making on interest rates will shift to the six-member panel which has equal representation from the RBI and the government. Since January last year, the RBI has cut the repo rate - the rate at which RBI lends to banks - five times. India's retail inflation has touched a five-month low of 5.05 per cent in August, triggering hopes of a rate cut. The RBI and the government have set a retail inflation target of four percent for the next five years with an upper tolerance level of six percent and lower limit of two per cent. Most analysts expect a status quo on rates. Mounting bad loans will remain another focus area of Patel's debut policy review. Rajan has set a deadline of March 2017 for banks to clean up their balance sheets. Patel has to ensure that there is no let-up on this cut-off date. (ANI)

Reserve Bank of India to roll out monetary policy review today

India has appointed three independent experts to Reserve Bank of India&rsquo;s (RBI) Monetary Policy Committee (MPC) to set interest rates as the central banking institution gears up for a switch in terms of deciding its new policy.&nbsp; 
 
The three experts -- Chetan Ghate, professor at Indian Statistical Institute, Pami Dua, director at Delhi School of Economics, and Ravindra Dholakia, professor at Indian Institute of Management, Ahmedabad -- will join RBI Governor Urjit Patel and two senior officials from the bank&#39;s monetary policy department. 
 
Deputy governor R Gandhi and executive director Michael Patra are the two other senior officials from RBI.&nbsp; 
 
The commitee will be responsible for setting the key interest rates in the monetary policy review, thereby diluting the power of the RBI governor. It will meet four times in a year to decide on the monetary policy of India by a majority vote. In case of a tie, the RBI governor has the deciding vote.&nbsp; 
 
The three independent experts were recommended by a search committee.&nbsp; 
 
It&#39;s pertinent to mention that the Indian government amended the RBI Act on June 27, 2016 to shift the job of monetary policy-making in India to a newly constituted Monetary Policy Committee (MPC). 
 
Until recently, a technical advisory committee was constituted by the RBI, which consisted of governor, deputy governor and external advisors to give their opinion and suggestions for deciding RBI&#39;s monetary policy.&nbsp; 
 
However, the governor&#39;s word was final on the rates and the recommendations of the technical advisors were not binding on the RBI. 
&nbsp; 
In 2014, it was the Urjit Patel Committee that recommended the setting up of an MPC for determining interest rates and also, move from multiple indicator approach to inflation targeting. Having both Government and RBI members on the MPC was suggested for accountability.&nbsp; 
 
The Indian government would have to keep its deficit under check and RBI would owe an explanation for runaway inflation. 
&nbsp; 
Monetary policy decisions by central banks have far-reaching implications for the economy, investors, savers and borrowers. Hence, with only governor having the decision-making authority raises questions the accountability of the entire process. 
 
Across the world, several countries, including New Zealand, England, Canada, South Africa, Sweden, have tried to make the process transparent by appointing a committee and adopting inflation targeting as a monetary policy objective.&nbsp; 
 
(WION)

Newly-constituted Monetary Policy Committee will make the process for setting key interest rates more transparent

India has appointed three independent experts to Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) to set interest rates as the central banking institution gears up for a switch in terms of deciding its new policy. The three experts -- Chetan Ghate, professor at Indian Statistical Institute, Pami Dua, director at Delhi School of Economics, and Ravindra Dholakia, professor at Indian Institute of Management, Ahmedabad -- will join RBI Governor Urjit Patel and two senior officials from the bank's monetary policy department. Deputy governor R Gandhi and executive director Michael Patra are the two other senior officials from RBI. The commitee will be responsible for setting the key interest rates in the monetary policy review, thereby diluting the power of the RBI governor. It will meet four times in a year to decide on the monetary policy of India by a majority vote. In case of a tie, the RBI governor has the deciding vote. The three independent experts were recommended by a search committee. It's pertinent to mention that the Indian government amended the RBI Act on June 27, 2016 to shift the job of monetary policy-making in India to a newly constituted Monetary Policy Committee (MPC). Until recently, a technical advisory committee was constituted by the RBI, which consisted of governor, deputy governor and external advisors to give their opinion and suggestions for deciding RBI's monetary policy. However, the governor's word was final on the rates and the recommendations of the technical advisors were not binding on the RBI. In 2014, it was the Urjit Patel Committee that recommended the setting up of an MPC for determining interest rates and also, move from multiple indicator approach to inflation targeting. Having both Government and RBI members on the MPC was suggested for accountability. The Indian government would have to keep its deficit under check and RBI would owe an explanation for runaway inflation. Monetary policy decisions by central banks have far-reaching implications for the economy, investors, savers and borrowers. Hence, with only governor having the decision-making authority raises questions the accountability of the entire process. Across the world, several countries, including New Zealand, England, Canada, South Africa, Sweden, have tried to make the process transparent by appointing a committee and adopting inflation targeting as a monetary policy objective. (WION)

India appoints three experts for RBI's Monetary Policy Committee

Indian consumer inflation fell to a five-month low in August helped by smaller rises in food prices, raising hopes of an interest rate cut next month when the central bank&#39;s new governor presents his first policy review.&nbsp; 
 
Raghuram Rajan, whose tenure as governor of Reserve Bank of India (RBI) ended on September 4, left interest rates unchanged last month. 
 
&quot;The scope of 25 basis points cut in the October policy meet seems to be on the cards,&quot; said Shakti Satapathy, an analyst at AK Capital Services in western Mumbai city.&nbsp; 
 
Annual consumer price inflation eased to 5.05 per cent in August on the back of slower rises in food prices, government data showed on Monday. 
 
The fall in food inflation and the fuel index dragged down the overall numbers to within the comfort zone of the central bank, which has targeted 5.0 per cent inflation by March 2017. 
 
Economists surveyed by Reuters had expected annual retail inflation to come in at 5.5 per cent last month, compared with 6.07 per cent in July. 
 
Food inflation was 5.91 per cent last month, slower than 8.35 per cent recorded in July as prices of pulses, a major staple for India&#39;s 1.3 billion population, declined in August. 
 
Separate data released by the ministry of statistics and programme implementation showed annual growth in industrial output contracted 2.4 per cent in July from a year earlier, mainly dragged down by lower production of capital goods and consumer non-durables. 
 
In Asia, China&#39;s annual consumer inflation slowed to 1.3 per cent in August, while Indonesia&#39;s pace slowed to a near seven-year low of 2.8 per cent. 
 
Space for easing?&nbsp; 
 
Many analysts expect inflation to ease further, offering new central bank chief Urjit Patel room to cut the policy rate at the meeting on October 4. 
 
Indian Prime Minister Narendra Modi faces a challenge to achieve economic growth of around 8 per cent to create jobs for millions of unemployed youth, and industry has long sought lower interest rates. 
 
Annual economic growth in Asia&#39;s third-largest economy slowed to 7.1 per cent in April-June from 7.9 per cent the previous quarter, putting Modi&#39;s target further out of reach. 
 
But some analysts said the RBI may hold off until the end of the year when the inflation picture becomes clearer. 
 
&quot;There is a high probability of a rate cut in December but certainly not in October in my opinion,&quot; said Rupa Rege Nitsure, group chief economist at L&amp;T Finance Holdings in Mumbai. 
 
(Reuters)&nbsp; 
 
 
&nbsp;

In August, the annual consumer inflation eased to 5.05 per cent due to slow rise in food prices

Indian consumer inflation fell to a five-month low in August helped by smaller rises in food prices, raising hopes of an interest rate cut next month when the central bank's new governor presents his first policy review. Raghuram Rajan, whose tenure as governor of Reserve Bank of India (RBI) ended on September 4, left interest rates unchanged last month. "The scope of 25 basis points cut in the October policy meet seems to be on the cards," said Shakti Satapathy, an analyst at AK Capital Services in western Mumbai city. Annual consumer price inflation eased to 5.05 per cent in August on the back of slower rises in food prices, government data showed on Monday. The fall in food inflation and the fuel index dragged down the overall numbers to within the comfort zone of the central bank, which has targeted 5.0 per cent inflation by March 2017. Economists surveyed by Reuters had expected annual retail inflation to come in at 5.5 per cent last month, compared with 6.07 per cent in July. Food inflation was 5.91 per cent last month, slower than 8.35 per cent recorded in July as prices of pulses, a major staple for India's 1.3 billion population, declined in August. Separate data released by the ministry of statistics and programme implementation showed annual growth in industrial output contracted 2.4 per cent in July from a year earlier, mainly dragged down by lower production of capital goods and consumer non-durables. In Asia, China's annual consumer inflation slowed to 1.3 per cent in August, while Indonesia's pace slowed to a near seven-year low of 2.8 per cent. Space for easing? Many analysts expect inflation to ease further, offering new central bank chief Urjit Patel room to cut the policy rate at the meeting on October 4. Indian Prime Minister Narendra Modi faces a challenge to achieve economic growth of around 8 per cent to create jobs for millions of unemployed youth, and industry has long sought lower interest rates. Annual economic growth in Asia's third-largest economy slowed to 7.1 per cent in April-June from 7.9 per cent the previous quarter, putting Modi's target further out of reach. But some analysts said the RBI may hold off until the end of the year when the inflation picture becomes clearer. "There is a high probability of a rate cut in December but certainly not in October in my opinion," said Rupa Rege Nitsure, group chief economist at L&T Finance Holdings in Mumbai. (Reuters)

India's August retail inflation at five-month low, raises hopes of rate cut

Concerned over gaps in monitoring of trade payments, the Special Investigation Team of India (SIT) on black money has asked the Reserve Bank of India to establish an institutional mechanism to track illicit financial flows and share data with other law enforcement agencies, like enforcement directorate, DRI and CBDT. 
 
In a letter to RBI governor on August 11, the Special Investigation Team (SIT) headed by Justice M B Shah (retd) underlined the need for creating a data warehouse from where various agencies can gather relevant information for taking early appropriate action. 
 
In the light of &quot;gaps in the regulatory framework&quot;, the SIT has impressed upon RBI the imperative need to establish the institutional mechanism for sharing of data with the RBI in its various data-bases with the enforcement authorities. 
 
The data available with RBI could be &quot;cross-checked with other information available with enforcement authorities and illicit financial flows could be curbed,&quot; the SIT said. 
 
The Supreme Court-appointed SIT had in the past asked RBI to provide data on advance remittances and export outstanding of more than one year. 
 
However, the SIT said the data provided &quot;clearly showed that there are gaps in monitoring trade flows which are used by unscrupulous elements to take out precious capital outside the country, this damaging the fabric of Indian economy&quot;. 
 
The SIT feels that the data can be shared only by having one agency such as Central Economic Intelligence Bureau (CEIB) or any other agency, as a data warehouse. 
 
&quot;From the said data warehouse, various agencies can gather the relevant information for taking early appropriate action. This is so since the data available with one agency can be relevant to action expected to be taken by other Law enforcement agency,&quot; the finance ministry said . 
 
At present, RBI holds the information with respect to all types of foreign exchange transactions. 
 
SIT has also asked the Revenue Department to identify a single point agency which could access the database relating to foreign exchange transactions and trade-related payments and thereafter disseminate them to various enforcement agencies.&nbsp; 
 
SIT feels that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBDT, is of critical importance. 
 
The SIT has suggested that RBI gives access to foreign exchange transactions data of all authorised dealers available in Foreign Exchange Transactions Electronic Reporting System (FET-ERS) with other law enforcement authorities. 
 
FET-ERS should capture the PAN number of the importer or exporter and that RBI should take necessary steps to get this done on an &quot;urgent basis&quot;. 
 
As regards &#39;Exports Outstanding data&#39;, the SIT said huge amounts were found outstanding beyond a period of one year in violation of FEMA and suggested that companies might have wrongly claimed duty drawbacks. RBI maintains export realisation data in its EDPMS database. 
 
&quot;The SIT has asked the Enforcement Directorate, Directorate of Revenue Intelligence and Ministry of Commerce to analyse the data of export outstanding and take necessary action in this regard,&quot; the finance ministry statement said. 
 
RBI maintains export realisation data in its EDPMS database. SIT has asked RBI to impress upon the banks to inform regarding realisation of export proceeds on the EDPMS. 
 
In the wake of the Bank of Baroda scam, the SIT had asked RBI to institutionalise a mechanism for cross-checking of advance remittances against Bill of Entry irrespective of value of advance remittances sent. 
 
RBI had informed the SIT that huge advance remittances running into billions of dollars were outstanding as on September 30, 2015, for which Bill of Entry correlation has not been done. 
 
SIT has now asked the RBI to get this co?relation completed at the&nbsp;earliest and inform it back. 
 
It, however, expressed satisfaction over the IDPMS (Import Data Processing and Monitoring System) being set up by RBI by September, which will enable cross-checking of each advance remittance against the Bill of Entry. 
 
&quot;Chairman, SIT in his letter requested RBI to develop, in consultation with Department of Revenue, an institutional online mechanism for sharing of data of all the above three databases being managed by RBI i.e. FET-ERS, IDPMS and EDPMS,&quot; the statement said. 
 
(PTI)

The SIT underlined the need for creating a data warehouse from where various agencies can gather relevant information

Concerned over gaps in monitoring of trade payments, the Special Investigation Team of India (SIT) on black money has asked the Reserve Bank of India to establish an institutional mechanism to track illicit financial flows and share data with other law enforcement agencies, like enforcement directorate, DRI and CBDT. In a letter to RBI governor on August 11, the Special Investigation Team (SIT) headed by Justice M B Shah (retd) underlined the need for creating a data warehouse from where various agencies can gather relevant information for taking early appropriate action. In the light of "gaps in the regulatory framework", the SIT has impressed upon RBI the imperative need to establish the institutional mechanism for sharing of data with the RBI in its various data-bases with the enforcement authorities. The data available with RBI could be "cross-checked with other information available with enforcement authorities and illicit financial flows could be curbed," the SIT said. The Supreme Court-appointed SIT had in the past asked RBI to provide data on advance remittances and export outstanding of more than one year. However, the SIT said the data provided "clearly showed that there are gaps in monitoring trade flows which are used by unscrupulous elements to take out precious capital outside the country, this damaging the fabric of Indian economy". The SIT feels that the data can be shared only by having one agency such as Central Economic Intelligence Bureau (CEIB) or any other agency, as a data warehouse. "From the said data warehouse, various agencies can gather the relevant information for taking early appropriate action. This is so since the data available with one agency can be relevant to action expected to be taken by other Law enforcement agency," the finance ministry said . At present, RBI holds the information with respect to all types of foreign exchange transactions. SIT has also asked the Revenue Department to identify a single point agency which could access the database relating to foreign exchange transactions and trade-related payments and thereafter disseminate them to various enforcement agencies. SIT feels that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBDT, is of critical importance. The SIT has suggested that RBI gives access to foreign exchange transactions data of all authorised dealers available in Foreign Exchange Transactions Electronic Reporting System (FET-ERS) with other law enforcement authorities. FET-ERS should capture the PAN number of the importer or exporter and that RBI should take necessary steps to get this done on an "urgent basis". As regards 'Exports Outstanding data', the SIT said huge amounts were found outstanding beyond a period of one year in violation of FEMA and suggested that companies might have wrongly claimed duty drawbacks. RBI maintains export realisation data in its EDPMS database. "The SIT has asked the Enforcement Directorate, Directorate of Revenue Intelligence and Ministry of Commerce to analyse the data of export outstanding and take necessary action in this regard," the finance ministry statement said. RBI maintains export realisation data in its EDPMS database. SIT has asked RBI to impress upon the banks to inform regarding realisation of export proceeds on the EDPMS. In the wake of the Bank of Baroda scam, the SIT had asked RBI to institutionalise a mechanism for cross-checking of advance remittances against Bill of Entry irrespective of value of advance remittances sent. RBI had informed the SIT that huge advance remittances running into billions of dollars were outstanding as on September 30, 2015, for which Bill of Entry correlation has not been done. SIT has now asked the RBI to get this co?relation completed at the earliest and inform it back. It, however, expressed satisfaction over the IDPMS (Import Data Processing and Monitoring System) being set up by RBI by September, which will enable cross-checking of each advance remittance against the Bill of Entry. "Chairman, SIT in his letter requested RBI to develop, in consultation with Department of Revenue, an institutional online mechanism for sharing of data of all the above three databases being managed by RBI i.e. FET-ERS, IDPMS and EDPMS," the statement said. (PTI)

Reserve Bank of India must share data with law enforcement agencies - SIT

Urjit Patel who took over as the 24th governor of the Reserve Bank of India will have a tough task in maintaining the legacy of his predecessor, Raghuram Rajan, and balance the need to contain inflation without hurting growth. 
 
Patel assumed charge effective September 4, 2016, after serving as deputy governor since January 2013, RBI said in a statement today. 
 
He was reappointed as deputy governor on January 11, 2016, after the completion of his first three-year term in office. 
 
Ensuring undisruptive redemption totalling USD 20-25 billion, getting used to the idea of Monetary Policy Committee and bank cleanup are the main challenges before the new Governor. 
 
According to Rajiv Kumar, Senior Fellow at Centre for Policy Research, the first task before him is to get used to the idea of working with the Monetary Policy Committee (MPC). 
 
&quot;He has to devise a way of working with the committee and getting to the objective of meeting inflation target. Besides, containing food inflation is another challenge before him,&quot; Kumar said. 
 
If food inflation raises its head again then what strategy he will employ to contain it, he asked. 
 
Besides, he should work in a manner that RBI versus the Finance Ministry situation is avoided as all the components are working towards inflation control and employment generation and finally what approach he will adopt to clean balance sheet of the bank or strengthen banks. 
 
Among his assignments as deputy governor, Patel chaired the Expert Committee to Revise and Strengthen the Monetary Policy Framework. 
 
&quot;Representing India, he actively participated in steering the signing into force of the inter-governmental treaty and the Inter-Central Bank Agreement (ICBA) among the BRICS nations, which led to the establishment of the Contingent Reserve Arrangement (CRA), a swap line framework among the central banks of these countries,&quot; RBI said. 
&nbsp; 
Patel has also served at the International Monetary Fund (IMF). He was on deputation from the IMF to RBI during 1996-1997, and in that capacity, he provided advice on the&nbsp;development of the debt market, banking reforms, pension reforms, and evolution of the foreign exchange market. 
 
He was a Consultant to the Ministry of Finance from 1998 to 2001. He also had other assignments in public and private sectors, including with Reliance Industries, IDFC Ltd, MCX Ltd and Gujarat State Petroleum Corporation. 
 
Dr Patel, as he is commonly referred to as, has worked closely with several central and state government high-level committees. These include the Task Force on Direct Taxes, the High-Level Expert Group for Reviewing the Civil &amp; Defence Services Pension System, the Prime Minister&#39;s Task Force on Infrastructure, the Group of Ministers on Telecom Matters, the Committee on Civil Aviation Reforms and the Ministry of Power&#39;s Expert Group on State Electricity Boards. 
 
He has several publications in areas of Indian macroeconomics, monetary policy, public finance, financial sector, international trade, and regulatory economics, the RBI said. 
 
Patel has a PhD in economics from Yale University, an M Phil from University of Oxford and a BSc from the University of London.&nbsp; 
 
(PTI)

Patel will face the challenge of ensuring undisruptive redemption totalling $20-25 billion and to contain inflation without hurting growth

Urjit Patel who took over as the 24th governor of the Reserve Bank of India will have a tough task in maintaining the legacy of his predecessor, Raghuram Rajan, and balance the need to contain inflation without hurting growth. Patel assumed charge effective September 4, 2016, after serving as deputy governor since January 2013, RBI said in a statement today. He was reappointed as deputy governor on January 11, 2016, after the completion of his first three-year term in office. Ensuring undisruptive redemption totalling USD 20-25 billion, getting used to the idea of Monetary Policy Committee and bank cleanup are the main challenges before the new Governor. According to Rajiv Kumar, Senior Fellow at Centre for Policy Research, the first task before him is to get used to the idea of working with the Monetary Policy Committee (MPC). "He has to devise a way of working with the committee and getting to the objective of meeting inflation target. Besides, containing food inflation is another challenge before him," Kumar said. If food inflation raises its head again then what strategy he will employ to contain it, he asked. Besides, he should work in a manner that RBI versus the Finance Ministry situation is avoided as all the components are working towards inflation control and employment generation and finally what approach he will adopt to clean balance sheet of the bank or strengthen banks. Among his assignments as deputy governor, Patel chaired the Expert Committee to Revise and Strengthen the Monetary Policy Framework. "Representing India, he actively participated in steering the signing into force of the inter-governmental treaty and the Inter-Central Bank Agreement (ICBA) among the BRICS nations, which led to the establishment of the Contingent Reserve Arrangement (CRA), a swap line framework among the central banks of these countries," RBI said. Patel has also served at the International Monetary Fund (IMF). He was on deputation from the IMF to RBI during 1996-1997, and in that capacity, he provided advice on the development of the debt market, banking reforms, pension reforms, and evolution of the foreign exchange market. He was a Consultant to the Ministry of Finance from 1998 to 2001. He also had other assignments in public and private sectors, including with Reliance Industries, IDFC Ltd, MCX Ltd and Gujarat State Petroleum Corporation. Dr Patel, as he is commonly referred to as, has worked closely with several central and state government high-level committees. These include the Task Force on Direct Taxes, the High-Level Expert Group for Reviewing the Civil & Defence Services Pension System, the Prime Minister's Task Force on Infrastructure, the Group of Ministers on Telecom Matters, the Committee on Civil Aviation Reforms and the Ministry of Power's Expert Group on State Electricity Boards. He has several publications in areas of Indian macroeconomics, monetary policy, public finance, financial sector, international trade, and regulatory economics, the RBI said. Patel has a PhD in economics from Yale University, an M Phil from University of Oxford and a BSc from the University of London. (PTI)

Urjit Patel takes over as Reserve Bank of India governor

India&#39;s former central bank governor Raghuram Rajan&#39;s abrupt announcement of his departure as governor of the Reserve Bank of India (RBI) came as a nasty surprise to many, especially his fans in the investment community, but the way Urjit Patel was chosen as his successor has been anything but. 
 
Aides to Indian Prime Minister Narendra Modi have sought to show that the search and selection process has been deliberate and controlled, that the nation&rsquo;s leader and the finance minister Arun Jaitley were closely involved, and that the government is fully behind the RBI&rsquo;s battle to control inflation. 
 
Critically for the stability of financial markets, Patel lent his name to the panel that drew up the blueprint for formally adopting a consumer inflation target of 4 per cent, as well as creating a new Monetary Policy Committee to steer interest rates and help India hit that goal. 
 
At the same time, the officials have stressed that no single individual should again dominate the RBI in the way that Rajan did over his three-year term. Where Rajan is known for pithy one-liners at news conferences and speeches larded with social criticism, Patel is seen as more of a backroom technocrat who avoids the limelight. 
 
Rajan&#39;s shock announcement on the afternoon of June 18, a Saturday, caught the government off-guard &ndash; Jaitley was watching a movie at home with his family and took more than two hours to issue a public statement. 
 
The recovery of composure was quick, though. A shortlist of potential successors was floated before the evening was out. Patel, the 52-year-old deputy governor who takes over from Rajan on September 4, was on it, along with a clutch of other contenders that included veterans of the RBI. 
 
On Saturday evening, exactly nine weeks later, the choice was made public. And it was done without Modi holding meetings about the job with any of the candidates, according to sources with direct knowledge of the process. 
 
While Modi may have been involved in the final decision on Patel, he wanted to &quot;keep his distance&quot; in the weeks before as the appointment committee ran the process, one aide said. 
 
&quot;Lobbying does not get you such a job - but Modi ji&#39;s confidence in Patel was a big factor,&rdquo; the official said, using the honorific Indian suffix. 
 
Patel has wide international policy experience. He worked at the IMF as an economist from 1990 to 1995, and for Boston Consulting Group and Indian conglomerate Reliance Industries. 
 
Sources said Patel had been vetted and his candidacy blessed by the Hindu-nationalist umbrella group, the Rashtriya Swayamsevak Sangh (RSS), that backs Modi&#39;s nationalist party. 
 
That marks a big change from its attitude to Rajan, who came under fire from the Rashtriya Swayamsevak Sangh&nbsp;(RSS), a right-wing ,Hindu nationalist Party and in particular from lawmaker Subramanian Swamy who demanded he be fired for being &quot;mentally not fully Indian&quot;. Rajan this month denounced the personal attacks he had faced as &quot;abominable&quot;. 
 
Patel is looked on favourably as dependable and low-key, with no ambition to upstage the government. Rajan, by contrast, drew RSS ire by straying into politically sensitive territory in high-profile speeches in which he said social tolerance was vital to a country&rsquo;s economic development. 
 
That was perceived as an implied attack on the Hindu-nationalist agenda of the RSS and other supporters of Modi. Rajan has denied criticising the government. 
 
Getting to know you 
 
Modi warmed to Patel at a face-to-face meeting earlier this year, when the central banker was given an extension to his term as deputy governor in charge of monetary policy, said a second Modi aide. 
 
&quot;Patel has a direct working equation with the Prime Minister,&quot; this aide said, using an Indian-English expression for a personal relationship, adding the Prime Minister valued Patel as a &quot;clear thinker&quot; and appreciated his &quot;direct approach&quot;. 
 
The only sign of nervousness senior officials betrayed was in their initial suggestion that the next governor would be named by the time of Rajan&#39;s final policy meeting on August 9. 
 
But, after financial markets remained calm despite Rajan&#39;s announcement that he would not seek a second term, they reverted to a timeline that would allow just enough time for an orderly handover - as was the case with Rajan&#39;s own appointment three years ago. 
 
Throughout, the Prime Minister&#39;s Office has owned the process - reflecting Modi&#39;s determination to centralise decision-making in India&#39;s sprawling and often recalcitrant bureaucracy - with cabinet secretary PK Sinha heading the selection committee. 
 
In its initial recommendations in July, the panel called for the next RBI governor to be a technocrat, and not a bureaucrat; a macroeconomist; and team player. 
 
The successful candidate needed to be an individual of stature who could also ensure continuity at the RBI, one of the panel&#39;s members said after Patel&rsquo;s appointment. 
 
Jaitley met Modi to discuss the RBI succession on Thursday. A five-strong candidate list was then submitted to the selection panel, with the field led by Patel and also featuring contenders such as India&#39;s IMF executive director Subir Gokarn and World Bank chief economist Kaushik Basu. 
 
The selection committee provided its feedback after a lengthy session on Friday. It did not recommend any name; nor did it formally interview candidates, the member said, adding the final decision to pick Patel was made by Modi and Jaitley. 
 
&nbsp;Inflation hawk 
 
The choice shows that Modi is paying more than just lip-service to the fight against inflation. 
 
Modi endorsed the inflation fight in his Independence Day speech last Monday, and that will shield Patel as he seeks to consolidate the inflation-targeting framework brought in under the leadership of Rajan. 
 
&quot;While we have embraced the idea of the MPC, it has yet to be tested,&quot; said another senior government official. &nbsp;&quot;You need a smooth transition from the current system of decision making. Patel can ensure that there are no hiccoughs.&quot; 
 
&nbsp;Also, with the inflation rate now pushing above 6 per cent, it is vital to send a clear message to investors that the government would not waver in its resolve to keep inflation in check, this official added. 
 
&nbsp;&quot;It is very important that the credibility we have acquired in managing inflation doesn&#39;t get dented,&quot; the official also said. 
 
(Reuters)

Officials stress no single individual to dominate the Reserve Bank of India, the way former governor Raghuram Rajan did

India's former central bank governor Raghuram Rajan's abrupt announcement of his departure as governor of the Reserve Bank of India (RBI) came as a nasty surprise to many, especially his fans in the investment community, but the way Urjit Patel was chosen as his successor has been anything but. Aides to Indian Prime Minister Narendra Modi have sought to show that the search and selection process has been deliberate and controlled, that the nation’s leader and the finance minister Arun Jaitley were closely involved, and that the government is fully behind the RBI’s battle to control inflation. Critically for the stability of financial markets, Patel lent his name to the panel that drew up the blueprint for formally adopting a consumer inflation target of 4 per cent, as well as creating a new Monetary Policy Committee to steer interest rates and help India hit that goal. At the same time, the officials have stressed that no single individual should again dominate the RBI in the way that Rajan did over his three-year term. Where Rajan is known for pithy one-liners at news conferences and speeches larded with social criticism, Patel is seen as more of a backroom technocrat who avoids the limelight. Rajan's shock announcement on the afternoon of June 18, a Saturday, caught the government off-guard – Jaitley was watching a movie at home with his family and took more than two hours to issue a public statement. The recovery of composure was quick, though. A shortlist of potential successors was floated before the evening was out. Patel, the 52-year-old deputy governor who takes over from Rajan on September 4, was on it, along with a clutch of other contenders that included veterans of the RBI. On Saturday evening, exactly nine weeks later, the choice was made public. And it was done without Modi holding meetings about the job with any of the candidates, according to sources with direct knowledge of the process. While Modi may have been involved in the final decision on Patel, he wanted to "keep his distance" in the weeks before as the appointment committee ran the process, one aide said. "Lobbying does not get you such a job - but Modi ji's confidence in Patel was a big factor,” the official said, using the honorific Indian suffix. Patel has wide international policy experience. He worked at the IMF as an economist from 1990 to 1995, and for Boston Consulting Group and Indian conglomerate Reliance Industries. Sources said Patel had been vetted and his candidacy blessed by the Hindu-nationalist umbrella group, the Rashtriya Swayamsevak Sangh (RSS), that backs Modi's nationalist party. That marks a big change from its attitude to Rajan, who came under fire from the Rashtriya Swayamsevak Sangh (RSS), a right-wing ,Hindu nationalist Party and in particular from lawmaker Subramanian Swamy who demanded he be fired for being "mentally not fully Indian". Rajan this month denounced the personal attacks he had faced as "abominable". Patel is looked on favourably as dependable and low-key, with no ambition to upstage the government. Rajan, by contrast, drew RSS ire by straying into politically sensitive territory in high-profile speeches in which he said social tolerance was vital to a country’s economic development. That was perceived as an implied attack on the Hindu-nationalist agenda of the RSS and other supporters of Modi. Rajan has denied criticising the government. Getting to know you Modi warmed to Patel at a face-to-face meeting earlier this year, when the central banker was given an extension to his term as deputy governor in charge of monetary policy, said a second Modi aide. "Patel has a direct working equation with the Prime Minister," this aide said, using an Indian-English expression for a personal relationship, adding the Prime Minister valued Patel as a "clear thinker" and appreciated his "direct approach". The only sign of nervousness senior officials betrayed was in their initial suggestion that the next governor would be named by the time of Rajan's final policy meeting on August 9. But, after financial markets remained calm despite Rajan's announcement that he would not seek a second term, they reverted to a timeline that would allow just enough time for an orderly handover - as was the case with Rajan's own appointment three years ago. Throughout, the Prime Minister's Office has owned the process - reflecting Modi's determination to centralise decision-making in India's sprawling and often recalcitrant bureaucracy - with cabinet secretary PK Sinha heading the selection committee. In its initial recommendations in July, the panel called for the next RBI governor to be a technocrat, and not a bureaucrat; a macroeconomist; and team player. The successful candidate needed to be an individual of stature who could also ensure continuity at the RBI, one of the panel's members said after Patel’s appointment. Jaitley met Modi to discuss the RBI succession on Thursday. A five-strong candidate list was then submitted to the selection panel, with the field led by Patel and also featuring contenders such as India's IMF executive director Subir Gokarn and World Bank chief economist Kaushik Basu. The selection committee provided its feedback after a lengthy session on Friday. It did not recommend any name; nor did it formally interview candidates, the member said, adding the final decision to pick Patel was made by Modi and Jaitley. Inflation hawk The choice shows that Modi is paying more than just lip-service to the fight against inflation. Modi endorsed the inflation fight in his Independence Day speech last Monday, and that will shield Patel as he seeks to consolidate the inflation-targeting framework brought in under the leadership of Rajan. "While we have embraced the idea of the MPC, it has yet to be tested," said another senior government official. "You need a smooth transition from the current system of decision making. Patel can ensure that there are no hiccoughs." Also, with the inflation rate now pushing above 6 per cent, it is vital to send a clear message to investors that the government would not waver in its resolve to keep inflation in check, this official added. "It is very important that the credibility we have acquired in managing inflation doesn't get dented," the official also said. (Reuters)

India: PM Modi regains composure after Rajan shock, visible in naming of new central bank chief

In a dramatic heist in a moving train, five crore in Indian Rupees ($ 750,000) out of the Rs340 crore cash being sent to Reserve Bank of India in Chennai from Salem in South India&#39;s Tamil Nadu was found stolen on Tuesday, police said. 
 
The Salem Express left Salem in Tamil Nadu on Monday night. It was carrying a consignment of Rs 342 crore in currency kept in 226 boxes. 
 
After covering a distance of 350 kilometres when the train reached Chennai on Tuesday morning at 3.55am, the staff found that the consignment was robbed. 
 
A sum of Rupees five crore had been stolen, inspector- general of poilce M Ramasubramani said on Tuesday evening. 
 
&quot;Out of the 226 wooden boxes, four boxes were found tampered with soon after the train reached Chennai from Salem,&quot; said an RBI official. 
 
Police said an air-vent in one of the three cargo coaches in which the cash boxes were kept was found broken, triggering doubts that someone could have entered from its roof. 
 
They suspect that culprits could have entered the coach on the Salem-Vriddhachalam section where trains don&#39;t run on electricity but on diesel locomotives, making it easy for the robbers to make their way from the top. 
 
The consignment was reportedly guarded by heavy security and the assistant commissioner of police. 
 
Police said they were probing many angles including how the theft could have happened despite police protection provided to the cash which had both currency notes printed prior to 2005 as well as soiled notes. 
 
(Agencies) 
 
&nbsp;

?An air-vent in one of the coaches carrying cash boxes was found broken, triggering doubts that someone could have entered from its roof

In a dramatic heist in a moving train, five crore in Indian Rupees ($ 750,000) out of the Rs340 crore cash being sent to Reserve Bank of India in Chennai from Salem in South India's Tamil Nadu was found stolen on Tuesday, police said. The Salem Express left Salem in Tamil Nadu on Monday night. It was carrying a consignment of Rs 342 crore in currency kept in 226 boxes. After covering a distance of 350 kilometres when the train reached Chennai on Tuesday morning at 3.55am, the staff found that the consignment was robbed. A sum of Rupees five crore had been stolen, inspector- general of poilce M Ramasubramani said on Tuesday evening. "Out of the 226 wooden boxes, four boxes were found tampered with soon after the train reached Chennai from Salem," said an RBI official. Police said an air-vent in one of the three cargo coaches in which the cash boxes were kept was found broken, triggering doubts that someone could have entered from its roof. They suspect that culprits could have entered the coach on the Salem-Vriddhachalam section where trains don't run on electricity but on diesel locomotives, making it easy for the robbers to make their way from the top. The consignment was reportedly guarded by heavy security and the assistant commissioner of police. Police said they were probing many angles including how the theft could have happened despite police protection provided to the cash which had both currency notes printed prior to 2005 as well as soiled notes. (Agencies)

Rs 5 crore stolen from moving train carrying Reserve Bank of India's consignment

A gang of robbers cut a hole in the roof of a train travelling through southern India and stole more than $750,000 in cash, police said on today. 
 
The daring heist occurred somewhere along the more than 300-kilometre long journey, but the missing loot was only discovered hours after the express train arrived in the city of Chennai. 
 
The train&#39;s mail carriage was carrying $51 million belonging to India&#39;s central bank and was being escorted by armed police seated in the next compartment. 
 
Police suspect about six to eight robbers made a four-foot square hole in the carriage roof using a cutting torch before escaping undetected with some of the cash. 
 
&quot;We are inquiring with the train guard and the police personnel if they heard any unusual noises on the roof,&quot; said police superintendent P Vijayakumar. 
 
Police said the robbers may have jumped off the train roof and were combing the tracks along the route in search of any of the missing notes. 
 
&quot;They created a manhole and then they sneaked one after the other and lifted the bundles to the roof before taking them away,&quot; inspector general of police M. Ramasubramani, who is heading the investigation, told AFP. 
 
Another police officer was quoted in the Hindu newspaper as saying the gang might have hidden themselves in the carriage before it was locked for the journey on Monday night, before escaping through the roof. 
 
Reserve Bank of India officials discovered the theft yesterday morning when they came to collect the cash from the carriage for disposal. The cash, although still usable, was soiled and was transported from the city of Salem to Chennai for destruction. 
 
The audacious crime has echoes of the &quot;Great Train Robbery&quot; of 1963 when a gang of criminals in Britain stopped a night mail train and made off with 2.6 million pounds. 
 
(AFP)

Police said the robbers may have jumped off the train roof. The mail carriage was carrying $51 million belonging to India's central bank

A gang of robbers cut a hole in the roof of a train travelling through southern India and stole more than $750,000 in cash, police said on today. The daring heist occurred somewhere along the more than 300-kilometre long journey, but the missing loot was only discovered hours after the express train arrived in the city of Chennai. The train's mail carriage was carrying $51 million belonging to India's central bank and was being escorted by armed police seated in the next compartment. Police suspect about six to eight robbers made a four-foot square hole in the carriage roof using a cutting torch before escaping undetected with some of the cash. "We are inquiring with the train guard and the police personnel if they heard any unusual noises on the roof," said police superintendent P Vijayakumar. Police said the robbers may have jumped off the train roof and were combing the tracks along the route in search of any of the missing notes. "They created a manhole and then they sneaked one after the other and lifted the bundles to the roof before taking them away," inspector general of police M. Ramasubramani, who is heading the investigation, told AFP. Another police officer was quoted in the Hindu newspaper as saying the gang might have hidden themselves in the carriage before it was locked for the journey on Monday night, before escaping through the roof. Reserve Bank of India officials discovered the theft yesterday morning when they came to collect the cash from the carriage for disposal. The cash, although still usable, was soiled and was transported from the city of Salem to Chennai for destruction. The audacious crime has echoes of the "Great Train Robbery" of 1963 when a gang of criminals in Britain stopped a night mail train and made off with 2.6 million pounds. (AFP)

Indian robbers cut hole in train roof in $750,000 heist

Terming political attacks on him as abominable, outgoing Reserve Bank of India governor Raghuram Rajan today said he was open to staying a bit longer to complete the unfinished work of bank clean-up, but is perfectly happy to go. 
 
Rajan, who had in June decided against seeking a second term after 3-year tenure which ends next month, said the process of dialogue with the government did not reach a stage where he could have agreed to stay on. 
 
He said however that he was never worried about reappointment or a future career in government and did his best in the interest of the country and he was the &quot;best team player&quot;. 
 
Rajan, who plans to return to academia after his term ends on September 4, said his stays at university made him &quot;pretty thick skinned&quot;, but the attacks then were not abominable. 
 
&quot;Some of these (recent) attacks were abominable, that is imputing sort of motives, alleging things completely without any basis,&quot; he told CNBC-TV18, adding that he put them aside and did not pay any attention to them. 
 
Towards the end of his three-year tenure, Rajan faced personal attacks from BJP MP Subramanian Swamy who had alleged that the former IMF chief economist was not &quot;mentally not fully Indian&quot; and sent confidential and sensitive financial information abroad. 
 
Rajan said when people asked him if he was open to the second term, he said that although he had structured all his initiatives at RBI with a three-year horizon, there was some unfinished work like PSU banks&#39; balance sheet clean-up and setting up of monetary policy committee framework. 
 
&quot;That does not mean in any way, that I was absolutely hell bent on having a second term,&quot; he said. &quot;I was open for staying a little while longer to see them complete, but at the same time I was perfectly happy to go.&quot; 
 
Rajan said 90-95 per cent of the job that he had taken on was complete and he had absolute freedom in doing his work. 
 
On his future plans, he said: &quot;I have said again and again, I am fundamentally an academician. This (RBI Governor) is my side job&quot;.&nbsp; 
 
Asked if crony capitalists had a hand in his not getting an extension, Rajan said: &quot;I don&#39;t think you should attribute this to some hidden hand. I feel, I have done what was needed to be done, if they had such power they would have stopped me (from doing) what was needed.&quot; 
 
Stressing that he had absolute freedom in doing, whatever he wanted to do, Rajan said this required lots of work behind the scenes, with government and persuading government. 
 
&quot;So when people say you have been fighting all the time, absolutely not. Great relationship with previous government as well&nbsp;as people who matter in this government,&quot; he said. 
 
Rajan said legitimate criticism like focusing too much on inflation can be addressed and he has tried to convince public about his stand through his speeches. 
 
Stating that the country needs institutional reform to build a platform for strong and sustainable growth, Rajan cautioned against inflationary spiral in trying to push domestic demand-led growth. 
 
&quot;I keep saying, it is a no brainer to generate growth when the rest of the world is growing strong; when it is export-led growth, you don&#39;t need institutional change,&quot; he said. 
 
Stressing that RBI is an entity which has conservative approach as focuses on stability, Rajan said that in taking decisions he did not worry about his future career prospects. 
 
&quot;Wherever we had to say &#39;no&#39;, I have never worried about reappointment, or about whether I will have a future career in the government or anywhere else. I have said &#39;no&#39; when I think it is in the best interest of the country and I think in that way, I am being the best team player that I can possibly be. 
 
&quot;If I go along just for being comfortable, I think we will be building risk for the future which will really hurt the country,&quot; he said. 
Asked if his talking straight attitude went against him, Rajan said: &quot;I am not going to speculate, I think the bottom line is there was no consensus and that&#39;s where it stopped&quot;. 
 
He said after three-and-a-half years at IMF and four years in India, he did not want to label himself as a career bureaucrat, or a career technocrat. 
 
&quot;It is more where I can implement ideas, implement reform programme. This was absolutely a job I wanted to have, we worked together as a team in the RBI, we had a fantastic team and we made a&nbsp;great deal of difference. Did I come in with three years (in mind)? Yes absolutely... I am not saying I had in mind full stop at the end of it. But everything I wanted to do was structured for a three-year horizon,&quot; he said. 
 
(PTI)

Rajan, who decided against a second term, said dialogue with the government did not reach a stage where he could have agreed to stay on

Terming political attacks on him as abominable, outgoing Reserve Bank of India governor Raghuram Rajan today said he was open to staying a bit longer to complete the unfinished work of bank clean-up, but is perfectly happy to go. Rajan, who had in June decided against seeking a second term after 3-year tenure which ends next month, said the process of dialogue with the government did not reach a stage where he could have agreed to stay on. He said however that he was never worried about reappointment or a future career in government and did his best in the interest of the country and he was the "best team player". Rajan, who plans to return to academia after his term ends on September 4, said his stays at university made him "pretty thick skinned", but the attacks then were not abominable. "Some of these (recent) attacks were abominable, that is imputing sort of motives, alleging things completely without any basis," he told CNBC-TV18, adding that he put them aside and did not pay any attention to them. Towards the end of his three-year tenure, Rajan faced personal attacks from BJP MP Subramanian Swamy who had alleged that the former IMF chief economist was not "mentally not fully Indian" and sent confidential and sensitive financial information abroad. Rajan said when people asked him if he was open to the second term, he said that although he had structured all his initiatives at RBI with a three-year horizon, there was some unfinished work like PSU banks' balance sheet clean-up and setting up of monetary policy committee framework. "That does not mean in any way, that I was absolutely hell bent on having a second term," he said. "I was open for staying a little while longer to see them complete, but at the same time I was perfectly happy to go." Rajan said 90-95 per cent of the job that he had taken on was complete and he had absolute freedom in doing his work. On his future plans, he said: "I have said again and again, I am fundamentally an academician. This (RBI Governor) is my side job". Asked if crony capitalists had a hand in his not getting an extension, Rajan said: "I don't think you should attribute this to some hidden hand. I feel, I have done what was needed to be done, if they had such power they would have stopped me (from doing) what was needed." Stressing that he had absolute freedom in doing, whatever he wanted to do, Rajan said this required lots of work behind the scenes, with government and persuading government. "So when people say you have been fighting all the time, absolutely not. Great relationship with previous government as well as people who matter in this government," he said. Rajan said legitimate criticism like focusing too much on inflation can be addressed and he has tried to convince public about his stand through his speeches. Stating that the country needs institutional reform to build a platform for strong and sustainable growth, Rajan cautioned against inflationary spiral in trying to push domestic demand-led growth. "I keep saying, it is a no brainer to generate growth when the rest of the world is growing strong; when it is export-led growth, you don't need institutional change," he said. Stressing that RBI is an entity which has conservative approach as focuses on stability, Rajan said that in taking decisions he did not worry about his future career prospects. "Wherever we had to say 'no', I have never worried about reappointment, or about whether I will have a future career in the government or anywhere else. I have said 'no' when I think it is in the best interest of the country and I think in that way, I am being the best team player that I can possibly be. "If I go along just for being comfortable, I think we will be building risk for the future which will really hurt the country," he said. Asked if his talking straight attitude went against him, Rajan said: "I am not going to speculate, I think the bottom line is there was no consensus and that's where it stopped". He said after three-and-a-half years at IMF and four years in India, he did not want to label himself as a career bureaucrat, or a career technocrat. "It is more where I can implement ideas, implement reform programme. This was absolutely a job I wanted to have, we worked together as a team in the RBI, we had a fantastic team and we made a great deal of difference. Did I come in with three years (in mind)? Yes absolutely... I am not saying I had in mind full stop at the end of it. But everything I wanted to do was structured for a three-year horizon," he said. (PTI)

Rajan says he was open to extension, attacks on him were 'abominable'

Reserve Bank of India governor Raghuram Rajan said on Tuesday he had never criticised the government in speeches that had triggered strong criticism from right-wing political leaders. 
 
Rajan will step down as governor of the Reserve Bank of India on September 4 and his surprise decision not to make himself available for a second term had raised speculation that some of his speeches had upset Prime Minister Narendra Modi&#39;s nationalist government. 
 
&quot;In none of the speeches I have given has there been an explicit criticism or an implicit criticism of the government,&quot; Rajan told journalists following a policy review. 
 
&quot;Some of those speeches have been on economic issues outside of monetary policy. I think those economic issues are perfectly within the remit of the central bank because ultimately we have a remit of macro stability.&quot; 
 
Rajan also strongly defended a speech on social tolerance, which was heavily criticised by some government officials as meddling into political areas. 
 
(Reuters)

Rajan also defended a speech on social tolerance, which was severely criticised by certain government officials as meddling in politics

Reserve Bank of India governor Raghuram Rajan said on Tuesday he had never criticised the government in speeches that had triggered strong criticism from right-wing political leaders. Rajan will step down as governor of the Reserve Bank of India on September 4 and his surprise decision not to make himself available for a second term had raised speculation that some of his speeches had upset Prime Minister Narendra Modi's nationalist government. "In none of the speeches I have given has there been an explicit criticism or an implicit criticism of the government," Rajan told journalists following a policy review. "Some of those speeches have been on economic issues outside of monetary policy. I think those economic issues are perfectly within the remit of the central bank because ultimately we have a remit of macro stability." Rajan also strongly defended a speech on social tolerance, which was heavily criticised by some government officials as meddling into political areas. (Reuters)

Raghuram Rajan says speeches never criticised government

India&#39;s next central bank governor could learn a lot about stubbornly high prices in rural areas by driving down a ramshackle road in Uttar Pradesh state to talk to small farmers like Dharmendra Malik. 
 
After cooling last year due largely to lower oil prices, India&#39;s old nemesis inflation is back on the prowl and is threatening to breach the Reserve Bank of India&#39;s (RBI) target, a harsh welcome for its new chief who is expected to be appointed soon. 
 
Rising prices are also feeding rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base. Millions of government employees recently received hefty pay hikes, while more farmers are going bust. 
 
The dusty village of Sisauli puts the dilemma facing India&#39;s policymakers into clear focus.&nbsp;Sisuali is three hours by rough road from New Delhi, making transporting goods difficult and expensive.&nbsp;Layers of middlemen also clog the supply chain and take their cuts. Some farmers say their produce can go through at least four intermediaries before reaching customers. 
 
Malik says he sold rice for 16 Rupees (24 cents) a kilogram to a middle man. In a market 10 minutes away, it retails for three times as much. 
 
&quot;Inflation has come down only on paper; in reality, there is no let up in surging prices,&quot; Sudhir Kumar said in his grocery shop, which also has a small TV set he uses to keep an eye on commodity prices. 
 
Decades of neglect bubbling over 
 
Rural India has long suffered from neglect, but tensions are rising as food prices have surged after two years of drought. 
 
Retail inflation in rural areas has consistently outpaced urban areas in the past 18 months, hitting 6.20 per cent in June, well above 5.26 per cent in cities such as Mumbai.&nbsp;That has pushed overall inflation to a near two-year high of 5.77 per cent in June, near the upper end of the RBI&#39;s 2-6 per cent inflation target. 
 
RBI officials have stressed that many of the causes are structural and beyond the central bank&#39;s control, but the spike in inflation could complicate the next governor&#39;s job. 
 
Though India has become the world&#39;s fastest growing large economy, political pressure on the RBI is growing to cut interest rates more aggressively to spur full employment, at the risk of unleashing even stronger inflationary forces. 
 
Outgoing Governor Raghuram Rajan was lauded by investors for introducing inflation targeting last year, restoring the RBI&#39;s credibility by linking price management to numerical targets. Investors are closely watching to see if his successor will stick to tough targets or water them down. 
 
Economists polled by Reuters see only one more rate cut over the next year, if inflation does not pick-up too sharply. 
 
No easy fixes 
 
Prime Minister Narendra Modi&#39;s Bharatiya Janata Party (BJP) is already facing a tough electoral test in the state next year. Uttar Pradesh will be a crucial test for its re-election bid in 2019. 
 
&quot;You are not ready to pay more to farmers because that is bad economics,&quot; said Malik. &quot;But no one complains when hefty pay increases are given to government employees.&quot; &nbsp; 
 
The government is making some strides. It is spending on infrastructure and is seeking to weed out middlemen by giving farmers an option of selling their goods across India via electronic trading platforms set up at wholesale markets.&nbsp;But progress is slow, and middlemen continue to hold sway as farmers lack the means to ship directly to buyers. 
 
Rate cuts would do little for villagers such as Narpendar Jhinjha, a heavily indebted 52-year-old farmer, who says another bad year will force him to sell his land. 
 
&quot;A farmer is hit on both sides,&quot; Jhinja said, referring to low crop prices and higher prices for goods he needs to buy.&nbsp;&quot;And on top of that we have our loans to pay for. Farmers have been condemned to a life of misery.&quot; 
 
(Reuters)

Rising prices also feed rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base

India's next central bank governor could learn a lot about stubbornly high prices in rural areas by driving down a ramshackle road in Uttar Pradesh state to talk to small farmers like Dharmendra Malik. After cooling last year due largely to lower oil prices, India's old nemesis inflation is back on the prowl and is threatening to breach the Reserve Bank of India's (RBI) target, a harsh welcome for its new chief who is expected to be appointed soon. Rising prices are also feeding rural perceptions that Prime Minister Narendra Modi increasingly favours the urban middle class, a key voter base. Millions of government employees recently received hefty pay hikes, while more farmers are going bust. The dusty village of Sisauli puts the dilemma facing India's policymakers into clear focus. Sisuali is three hours by rough road from New Delhi, making transporting goods difficult and expensive. Layers of middlemen also clog the supply chain and take their cuts. Some farmers say their produce can go through at least four intermediaries before reaching customers. Malik says he sold rice for 16 Rupees (24 cents) a kilogram to a middle man. In a market 10 minutes away, it retails for three times as much. "Inflation has come down only on paper; in reality, there is no let up in surging prices," Sudhir Kumar said in his grocery shop, which also has a small TV set he uses to keep an eye on commodity prices. Decades of neglect bubbling over Rural India has long suffered from neglect, but tensions are rising as food prices have surged after two years of drought. Retail inflation in rural areas has consistently outpaced urban areas in the past 18 months, hitting 6.20 per cent in June, well above 5.26 per cent in cities such as Mumbai. That has pushed overall inflation to a near two-year high of 5.77 per cent in June, near the upper end of the RBI's 2-6 per cent inflation target. RBI officials have stressed that many of the causes are structural and beyond the central bank's control, but the spike in inflation could complicate the next governor's job. Though India has become the world's fastest growing large economy, political pressure on the RBI is growing to cut interest rates more aggressively to spur full employment, at the risk of unleashing even stronger inflationary forces. Outgoing Governor Raghuram Rajan was lauded by investors for introducing inflation targeting last year, restoring the RBI's credibility by linking price management to numerical targets. Investors are closely watching to see if his successor will stick to tough targets or water them down. Economists polled by Reuters see only one more rate cut over the next year, if inflation does not pick-up too sharply. No easy fixes Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) is already facing a tough electoral test in the state next year. Uttar Pradesh will be a crucial test for its re-election bid in 2019. "You are not ready to pay more to farmers because that is bad economics," said Malik. "But no one complains when hefty pay increases are given to government employees." The government is making some strides. It is spending on infrastructure and is seeking to weed out middlemen by giving farmers an option of selling their goods across India via electronic trading platforms set up at wholesale markets. But progress is slow, and middlemen continue to hold sway as farmers lack the means to ship directly to buyers. Rate cuts would do little for villagers such as Narpendar Jhinjha, a heavily indebted 52-year-old farmer, who says another bad year will force him to sell his land. "A farmer is hit on both sides," Jhinja said, referring to low crop prices and higher prices for goods he needs to buy. "And on top of that we have our loans to pay for. Farmers have been condemned to a life of misery." (Reuters)

India's next central bank chief will face stubborn old foe: Rural inflation

India&#39;s headline inflation probably stayed near a two-year high in June even as industrial production in May likely contracted, increasing the odds that the central bank will keep interest rates on hold next month. 
 
Consumer prices in June are estimated to have risen 5.73 per cent on an annual basis, according to a Reuters poll, a tad lower than May&#39;s 5.76 per cent - the fastest pace since August 2014.&nbsp;That would be a worry for outgoing Reserve Bank of India (RBI) Governor Raghuram Rajan, who wants inflation kept below at 5 per cent by March 2017. 
 
The Aug. 9 policy meeting will be the last for Rajan, whose three-year term ends in early September. Between January 2015 and this April, he cut the repo rate by 150 basis points, to 6.50 per cent.&nbsp;After holding rates in June, the governor said the central bank was looking for room to reduce them further, but it remained concerned about pressure on food and commodity prices. 
 
Demand-driven pressures are likely to be stoked by the hike of salaries and pensions for about 10 million government employees and pensioners. Vegetable prices, meanwhile, have surged due to seasonal supply disruptions. 
 
While a pick-up in summer monsoon rains in recent weeks is expected to cool food inflation, most analysts don&#39;t expect another rate cut before a new governor is on the job. DBS in Singapore expects a rate cut in the October-December quarter. 
 
New Governor, New Mechanism 
 
Prime Minister Narendra Modi is widely expected to name a new governor before July 18. Government sources say the race is mainly between former RBI deputy governors Rakesh Mohan and Subir Gokarn. 
 
The government has to also constitute a Monetary Policy Committee (MPC) to set interest rates by a majority vote, a departure from the current regime where the decision effectively rests with the RBI chief.&nbsp;It aims to name the six-member committee before the August policy review. Three members of the MPC would be RBI insiders, headed by the governor who would have the casting vote in the event of a 3-3 split. 
 
Three external members would be chosen by a panel comprising Modi&#39;s cabinet secretary, the RBI governor, a top finance ministry bureaucrat and three outside experts named by the government.&nbsp;India&#39;s statistics office will release retail inflation data and industrial production data at 1200 GMT today. 
 
Analysts surveyed by Reuters expect output at factories, mines and utilities to shrink 0.4 per cent in May from a year earlier compared with a surprise 0.8 per cent annual contraction a month ago. 
 
(Reuters)

According to a Reuters poll, consumer prices in June rose 5.73 per cent on an annual basis, a tad lower than May's 5.76

India's headline inflation probably stayed near a two-year high in June even as industrial production in May likely contracted, increasing the odds that the central bank will keep interest rates on hold next month. Consumer prices in June are estimated to have risen 5.73 per cent on an annual basis, according to a Reuters poll, a tad lower than May's 5.76 per cent - the fastest pace since August 2014. That would be a worry for outgoing Reserve Bank of India (RBI) Governor Raghuram Rajan, who wants inflation kept below at 5 per cent by March 2017. The Aug. 9 policy meeting will be the last for Rajan, whose three-year term ends in early September. Between January 2015 and this April, he cut the repo rate by 150 basis points, to 6.50 per cent. After holding rates in June, the governor said the central bank was looking for room to reduce them further, but it remained concerned about pressure on food and commodity prices. Demand-driven pressures are likely to be stoked by the hike of salaries and pensions for about 10 million government employees and pensioners. Vegetable prices, meanwhile, have surged due to seasonal supply disruptions. While a pick-up in summer monsoon rains in recent weeks is expected to cool food inflation, most analysts don't expect another rate cut before a new governor is on the job. DBS in Singapore expects a rate cut in the October-December quarter. New Governor, New Mechanism Prime Minister Narendra Modi is widely expected to name a new governor before July 18. Government sources say the race is mainly between former RBI deputy governors Rakesh Mohan and Subir Gokarn. The government has to also constitute a Monetary Policy Committee (MPC) to set interest rates by a majority vote, a departure from the current regime where the decision effectively rests with the RBI chief. It aims to name the six-member committee before the August policy review. Three members of the MPC would be RBI insiders, headed by the governor who would have the casting vote in the event of a 3-3 split. Three external members would be chosen by a panel comprising Modi's cabinet secretary, the RBI governor, a top finance ministry bureaucrat and three outside experts named by the government. India's statistics office will release retail inflation data and industrial production data at 1200 GMT today. Analysts surveyed by Reuters expect output at factories, mines and utilities to shrink 0.4 per cent in May from a year earlier compared with a surprise 0.8 per cent annual contraction a month ago. (Reuters)

India's retail inflation expected to remain high in June

Indian Prime Minister Narendra Modi could name his policy adviser,&nbsp;Arvind Panagariya, as the next governor of the Reserve Bank of India (RBI), two television channels reported today, citing unnamed government sources.

The TV channels - CNBC Awaaz and ABP News - also said that a formal announcement of the decision was expected in next 48 hours.

Modi&#39;s office declined to comment, but said a decision on the new central bank governor would be made before July 18. Panagariya&#39;s office also refused to comment.

Panagariya, who heads the government&#39;s main economic advisory body NITI Aayog (National Institution for Transforming India), is also India&#39;s Group of 20 summit negotiator.

The term of outgoing RBI chief Raghuram Rajan ends in early September. Rajan shocked markets late last month by announcing he would not seek reappointment. 
 
(Reuters)

PM Narendra Modi's office declined to comment, but said the decision on the new Reserve Bank of India governor will be made before July 18

Indian Prime Minister Narendra Modi could name his policy adviser, Arvind Panagariya, as the next governor of the Reserve Bank of India (RBI), two television channels reported today, citing unnamed government sources. The TV channels - CNBC Awaaz and ABP News - also said that a formal announcement of the decision was expected in next 48 hours. Modi's office declined to comment, but said a decision on the new central bank governor would be made before July 18. Panagariya's office also refused to comment. Panagariya, who heads the government's main economic advisory body NITI Aayog (National Institution for Transforming India), is also India's Group of 20 summit negotiator. The term of outgoing RBI chief Raghuram Rajan ends in early September. Rajan shocked markets late last month by announcing he would not seek reappointment. (Reuters)

Indian government policy adviser Arvind Panagariya could be made next RBI chief

JPMorgan Chase &amp; Co said on Friday it has won approval from India&#39;s central bank to open three more branches in the country even as most foreign banks are scaling back their operations in India. 
 
The bank&#39;s press released said the new branches will be located in the capital New Delhi and in the southern cities of Bengaluru and Chennai, and&nbsp;are expected to be operational in the next few months. 
 
&quot;This is another significant milestone for growing our Indian franchise and deepening our banking footprint,&quot; said Kalpana Morparia, CEO, South &amp; South East Asia, JPMorgan, in the statement.&nbsp; 
 
&quot;The expansion endorses our long-term commitment to India, a key market for JP Morgan, as well as for many of our clients,&quot; she said in the statement. 
 
JP Morgan said it will provide all existing products and services through the new branches, including cash management, trade finance 
and foreign-currency payments. 
 
In the last few years, India has seen almost an exodus of foreign banks from a host of services that they provided in the country. 
 
In January, British bank Barclays Plc said it would shut its India equities business to cut costs and boost profits. 
 
Later in May HSBC Holdings Plc said it planned to close 24 branches in India as part of its strategic review of its retail banking and wealth management business. 
 
(Reuters)

The bank plans to expand its business in India at a time when other foreign banks like Barclays Plc are scaling down or closing shop

JPMorgan Chase & Co said on Friday it has won approval from India's central bank to open three more branches in the country even as most foreign banks are scaling back their operations in India. The bank's press released said the new branches will be located in the capital New Delhi and in the southern cities of Bengaluru and Chennai, and are expected to be operational in the next few months. "This is another significant milestone for growing our Indian franchise and deepening our banking footprint," said Kalpana Morparia, CEO, South & South East Asia, JPMorgan, in the statement. "The expansion endorses our long-term commitment to India, a key market for JP Morgan, as well as for many of our clients," she said in the statement. JP Morgan said it will provide all existing products and services through the new branches, including cash management, trade finance and foreign-currency payments. In the last few years, India has seen almost an exodus of foreign banks from a host of services that they provided in the country. In January, British bank Barclays Plc said it would shut its India equities business to cut costs and boost profits. Later in May HSBC Holdings Plc said it planned to close 24 branches in India as part of its strategic review of its retail banking and wealth management business. (Reuters)

JP Morgan to open 3 new branches in India

India&#39;s central bank governor on Friday reiterated his previous calls for central banks globally not to depreciate their currencies for competitive advantage and said it would be an issue he wanted to address with other central bankers. 
 
The comments came as part of an interview with CNBC TV 18 on the global fallout from Britain&#39;s vote to leave the European Union. 
 
Separately, Rajan issued a statement saying India&#39;s good economic fundamentals would allow it to overcome any &quot;sharp corrections&quot; in global markets. 
 
&quot;The Indian economy has good fundamentals, low short term external debt, and sizeable foreign reserves,&quot; Rajan said in the statement released on the Reserve Bank of India&#39;s (RBI) website. 
 
&quot;These should stand the country in good stead in the days to come.&quot; 
 
Rajan added the RBI is &quot;maintaining a close vigil&quot; on markets and will &quot;take all necessary steps,&quot; including infusing dollars or rupees to ensure orderly conditions in markets. 
 
(Reuters)

Indian central bank governor added that the country's good economic fundamentals would allow it to overcome any 'sharp corrections'

India's central bank governor on Friday reiterated his previous calls for central banks globally not to depreciate their currencies for competitive advantage and said it would be an issue he wanted to address with other central bankers. The comments came as part of an interview with CNBC TV 18 on the global fallout from Britain's vote to leave the European Union. Separately, Rajan issued a statement saying India's good economic fundamentals would allow it to overcome any "sharp corrections" in global markets. "The Indian economy has good fundamentals, low short term external debt, and sizeable foreign reserves," Rajan said in the statement released on the Reserve Bank of India's (RBI) website. "These should stand the country in good stead in the days to come." Rajan added the RBI is "maintaining a close vigil" on markets and will "take all necessary steps," including infusing dollars or rupees to ensure orderly conditions in markets. (Reuters)

Raghuram Rajan: Not the time for central banks to devalue currencies

India&#39;s foreign exchange reserves hit a record high of $363.83 billion as of the week ended June 17, shoring up the country&#39;s defences just as investors brace for continued volatility after Britain voted to leave the European Union. 
 
Analsyts said FX reserves rose mainly on currency valuations. 
 
The Reserve Bank of India has also been steadily building Dollars to help meet $20 billion in expected outflows in September tied to maturing Dollar deposits - or the foreign currency non-resident (bank) deposits - raised during 2013 when India was in midst of a currency crisis. 
 
The weekly data comes on a day when the Indian Rupee fell to as low as 68.22 to the Dollar, its lowest since March 1 and not far from a record low of 68.85 hit in August 2013, during the crisis. 
 
The currency however cut some of its losses to end at 67.96/97, compared with its close of 67.25 on Thursday. 
 
&quot;India&#39;s strong reserves position is an important buffer against volatility in these uncertain times,&quot; said A Prasanna, an economist at ICICI Securities Primary Dealership Ltd in Mumbai. 
 
&quot;However, reserves are likely to see some decline in coming months due to the FCNR redemptions. Over the medium term, we expect reserves to keep expanding, boosted by sustainable inflows such as FDI (foreign direct investment).&quot; 
 
RBI governor Raghuram Rajan and finance minister Arun Jaitely said on Friday India was ready to deal with the aftermath of the Brexit vote, citing its solid economy and planned government reforms. 
 
Rajan also touted the country&#39;s Forex reserves as key defence against foreign investor selling. 
 
(Reuters)

RBI governor Raghuram Rajan and finance minister Arun Jaitely said India was ready to deal with the aftermath of the Brexit vote

India's foreign exchange reserves hit a record high of $363.83 billion as of the week ended June 17, shoring up the country's defences just as investors brace for continued volatility after Britain voted to leave the European Union. Analsyts said FX reserves rose mainly on currency valuations. The Reserve Bank of India has also been steadily building Dollars to help meet $20 billion in expected outflows in September tied to maturing Dollar deposits - or the foreign currency non-resident (bank) deposits - raised during 2013 when India was in midst of a currency crisis. The weekly data comes on a day when the Indian Rupee fell to as low as 68.22 to the Dollar, its lowest since March 1 and not far from a record low of 68.85 hit in August 2013, during the crisis. The currency however cut some of its losses to end at 67.96/97, compared with its close of 67.25 on Thursday. "India's strong reserves position is an important buffer against volatility in these uncertain times," said A Prasanna, an economist at ICICI Securities Primary Dealership Ltd in Mumbai. "However, reserves are likely to see some decline in coming months due to the FCNR redemptions. Over the medium term, we expect reserves to keep expanding, boosted by sustainable inflows such as FDI (foreign direct investment)." RBI governor Raghuram Rajan and finance minister Arun Jaitely said on Friday India was ready to deal with the aftermath of the Brexit vote, citing its solid economy and planned government reforms. Rajan also touted the country's Forex reserves as key defence against foreign investor selling. (Reuters)

India's forex reserves hit record high of $363.83 billion amid market turmoil

Rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after Reserve Bank of India&#39;s (RBI) governor Raghuram Rajan&#39;s surprise announcement over the weekend that he would quit after his term ends in September. 
 
The central bank was spotted selling dollars to curb the fall in the local currency, three traders said. 
 
The rupee in India was trading at 67.47 to the dollar at 0404 GMT, after hitting 67.70 to the dollar, its weakest since May 24. The currency had closed at 67.08/67.09 to the dollar on Friday. 
 
Rajan&#39;s unexpected decision comes at a time when investors had been bracing for heavy volatility from global markets as Britain is due to vote on Thursday on whether to leave the European Union. 
 
Though analysts had speculated Rajan could decide not to pursue a second term after a major regional newspaper reported last month he did not want to remain at the central bank, few had foreseen an announcement would come in the form of a letter to staff. 
 
The focus will now shift to Rajan&#39;s successor and analysts said they did not expect any long-term impact to markets as long as his replacement is seen as credible and somebody who can defend the central bank&#39;s autonomy at a critical juncture in its history. 
 
&quot;If you were to see someone come in who has very different set of policies, then the market will question if something has changed. That would not be my base case. If that were to happen, that would make me reassess how we thought about India,&quot; said Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong with $37.3 billion under management. 
 
&quot;If the system shows a willingness, a continuation of those policies, irrespective of the individual involved, that&rsquo;s quite a large vote of confidence.&quot; 
 
Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. 
 
The benchmark 10-year bond yield was up 3 basis points to 7.53 per cent. 
 
The one-year OIS rate was bid at 6.71-6.73 per cent while the five-year OIS rate was bid at 6.84 per cent, traders said. The one-year swap closed at 6.68 per cent and five-year at 6.77 per cent on Friday. 
 
The National Stock Exchange of India (Nifty) was flat after falling as much as 0.77 per cent. 
(Reuters)

The rupee fell to its lowest in nearly a month

Rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after Reserve Bank of India's (RBI) governor Raghuram Rajan's surprise announcement over the weekend that he would quit after his term ends in September. The central bank was spotted selling dollars to curb the fall in the local currency, three traders said. The rupee in India was trading at 67.47 to the dollar at 0404 GMT, after hitting 67.70 to the dollar, its weakest since May 24. The currency had closed at 67.08/67.09 to the dollar on Friday. Rajan's unexpected decision comes at a time when investors had been bracing for heavy volatility from global markets as Britain is due to vote on Thursday on whether to leave the European Union. Though analysts had speculated Rajan could decide not to pursue a second term after a major regional newspaper reported last month he did not want to remain at the central bank, few had foreseen an announcement would come in the form of a letter to staff. The focus will now shift to Rajan's successor and analysts said they did not expect any long-term impact to markets as long as his replacement is seen as credible and somebody who can defend the central bank's autonomy at a critical juncture in its history. "If you were to see someone come in who has very different set of policies, then the market will question if something has changed. That would not be my base case. If that were to happen, that would make me reassess how we thought about India," said Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong with $37.3 billion under management. "If the system shows a willingness, a continuation of those policies, irrespective of the individual involved, that’s quite a large vote of confidence." Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. The benchmark 10-year bond yield was up 3 basis points to 7.53 per cent. The one-year OIS rate was bid at 6.71-6.73 per cent while the five-year OIS rate was bid at 6.84 per cent, traders said. The one-year swap closed at 6.68 per cent and five-year at 6.77 per cent on Friday. The National Stock Exchange of India (Nifty) was flat after falling as much as 0.77 per cent. (Reuters)

Rajan leaves surprisingly and unsurprisingly the rupee and markets fall

Indian markets are set to open lower on Monday after Reserve Bank of India (RBI) governor Raghuram Rajan unexpectedly said he will step down in September, though the central bank is likely to step in to support the Rupee, analysts and traders said. 
 
Traders predicted the Rupee would likely fall by 0.15 to 0.20 Rupees per Dollar at the start of trading, but that the RBI would intervene to prevent excessive volatility. 
 
The Rupee closed at 67.0775/67.0875 per Dollar on Friday. 
 
The 10-year benchmark bond yield was seen rising 3-5 basis points after closing at 7.50 per cent on Friday, while shares were forecast to fall at the open. 
 
Any volatility could be magnified given the surprise news that Rajan would step down after just one three-year term comes ahead of a UK referendum on Thursday about whether to leave the European Union, which has kept global investors on tenterhooks. 
 
Still, analysts said markets would stabilise as investors await word on who will be appointed as the next RBI Governor, with RBI deputy governor Urjit Patel and State Bank of India chair-managing director Arundhati Bhattacharya seen as potential replacements. 
 
&quot;There should be a knee-jerk reaction on the Rupee,&quot; said Ashtosh Raina, head of foreign exchange with HDFC Bank. &quot;Then the market will normalise. I think the government would already be on the job to find a suitable replacement.&quot; 
 
Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. 
 
But he has faced mounting criticism from a faction within Indian Prime Minister Narendra Modi&#39;s ruling party for keeping interest rates high and over a perception he had begun to stray into politics. 
 
A senior official at a foreign bank said clients were already starting to call him. 
 
&quot;There are concerns. We have started seeing messages from foreign clients whether politics has taken over central banking. They are asking what&#39;s happening in India,&quot; he said, declining to be identified discussing conversations with clients. 
 
Still, analysts said markets would likely withstand any initial volatility, and expressed confidence the government would come up with an appointment that could gain the confidence of investors. 
 
&quot;The timing is certainly bad,&quot; said Rupa Rege Nitsure, group chief economist with L&amp;T Finance Holdings in Mumbai. 
 
&quot;I have confidence in the credibility of the RBI as a public institution and I&#39;m sure whoever fills in his shoes will be able to shoulder the challenge with the help of RBI &#39;s internal talent and skills.&quot; 
(Reuters)

Reserve Bank of India governor Raghuram Rajan unexpectedly said he will step down in September

Indian markets are set to open lower on Monday after Reserve Bank of India (RBI) governor Raghuram Rajan unexpectedly said he will step down in September, though the central bank is likely to step in to support the Rupee, analysts and traders said. Traders predicted the Rupee would likely fall by 0.15 to 0.20 Rupees per Dollar at the start of trading, but that the RBI would intervene to prevent excessive volatility. The Rupee closed at 67.0775/67.0875 per Dollar on Friday. The 10-year benchmark bond yield was seen rising 3-5 basis points after closing at 7.50 per cent on Friday, while shares were forecast to fall at the open. Any volatility could be magnified given the surprise news that Rajan would step down after just one three-year term comes ahead of a UK referendum on Thursday about whether to leave the European Union, which has kept global investors on tenterhooks. Still, analysts said markets would stabilise as investors await word on who will be appointed as the next RBI Governor, with RBI deputy governor Urjit Patel and State Bank of India chair-managing director Arundhati Bhattacharya seen as potential replacements. "There should be a knee-jerk reaction on the Rupee," said Ashtosh Raina, head of foreign exchange with HDFC Bank. "Then the market will normalise. I think the government would already be on the job to find a suitable replacement." Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. But he has faced mounting criticism from a faction within Indian Prime Minister Narendra Modi's ruling party for keeping interest rates high and over a perception he had begun to stray into politics. A senior official at a foreign bank said clients were already starting to call him. "There are concerns. We have started seeing messages from foreign clients whether politics has taken over central banking. They are asking what's happening in India," he said, declining to be identified discussing conversations with clients. Still, analysts said markets would likely withstand any initial volatility, and expressed confidence the government would come up with an appointment that could gain the confidence of investors. "The timing is certainly bad," said Rupa Rege Nitsure, group chief economist with L&T Finance Holdings in Mumbai. "I have confidence in the credibility of the RBI as a public institution and I'm sure whoever fills in his shoes will be able to shoulder the challenge with the help of RBI 's internal talent and skills." (Reuters)

Economist stepping down as Indian central bank governor set to hit markets

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