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Here is an endeavour to bring you in one folder all banking related unedited
news/columns/articles/opinions/analysis etc appearing in major business dailies
The compiler assumes no responsibility for the authenticity and reliability of the
news. Readers are requested to go through the official instructions before acting
upon any news articles and views appearing herein.
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Banks have to park these deposits with the RBI from the fortnight
beginning November 26 as incremental cash reserve ratio (CRR).
In a press release the RBI said that the new measures have been
announced to deal with excess liquidity. The magnitude of surplus
liquidity available with the banking system is expected to increase
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Mayur Shetty
The Times of India
Published on November 28, 2016
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The current CRR is just 4%. The RBI on Saturday issued a circular
stating that effective from November 26 banks must set aside an
incremental CRR of 100% on the increase in deposits between
September 16 and November 11, nearly eight weeks before the
demonetisation decision of November 8.
"With the CRR move, the RBI has bought itself room to suck out
about Rs 10.2 lakh crore (Rs 3.2 lakh crore through CRR and Rs 7
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Breaking Silence:
v
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Patel also said the RBI has announced an incremental CRR (Cash
Reserve Ratio) of 100 per cent because of the large increase in
deposits of banks on account of the return of Rs 1,000 and Rs 500
notes and the decision would be reviewed immediately once the
government issues adequate quantum of MSS (Market Stabilisation
Scheme) bonds which they have promised to do.
We are also urging banks to make a big push with PoS (Point of
Sale) machines with traders so that debit card use becomes more
prevalent, he said. Giving details of the steps being taken by RBI,
he said, Both RBI and government have been getting the printing
presses to work at capacity to get the new notes available to meet
demand. The RBI is interacting with the banks every day. They are
telling us that the situation is gradually easing. The queues in
branches and ATMs are shorter and the markets are starting to
function, and there are no reported shortages of daily items of
consumption.
People have asked why the new currency introduced was different
in size and thickness from the old. This is because the new currency
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A senior public sector bank official said: The demand for currency
is outstripping supply. Though people are withdrawing money from
banks/ATMs, they are not spending it. So, the currency is not
getting circulated. Despite an assurance from the RBI about
sufficient supply of notes, currency supply from the currency chests
is only so much. However, the supply situation is expected to
improve over the next few days.
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Police were seen regulating the crowds and turning away children
standing in queues with Aadhaar cards in Hyderabad.
The situation will not ease soon, say bankers. The total capacity of
the four currency printing presses in the country is only 300 crore
notes of higher denomination per month while notes being
withdrawn is approximately 622 crore of 1,000 notes and 1,530
crore of 500 notes, said BS Rambabu, a functionary of the All
India Bank Employees' Association.
The currency crunch will continue as public sector banks were not
being given adequate cash, he added,
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New Delhi, November 27: Expressing grave concern over the death
of 74 persons, including a number of bank employees, after the
Centres demonetisation move, 10 Central trade unions, barring the
RSS-backed Bharatiya Mazdoor Sangh, have demanded continuation
of banned 500/1,000 notes till the currency shortage eases. They
have also sought compensation for those who have died.
Noting the unimaginable stress and long hours of work for bank
employees attending to people in long queues, the unions said the
government should take concrete and effective action against
black money, which is being generated through evasion and
non-payment taxes, unfair and speculative business practices,
including money created in the country stashed away in foreign
banks.
Nothing has been done yet in that direction, said the unions,
including INTUC, AITUC, CITU, SEWA and HMS.
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The Reuters
The action was intended to target wealthy tax evaders and end
India's shadow economy", but it has also exposed the dependency
of poor farmers and small businesses on informal credit systems in
a country where half the population has no access to formal
banking.
Patil was stuck with 7,00,000 rupees of worthless cash. He can also
only withdraw up to 24,000 rupees from his account every week,
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barely enough for his own personal needs given he also works as a
farmer.
That is bad news for farmers and traders who had come to depend
on Patil, despite his high interest rates, given that bank branches
are located far from the village, while the process to obtain loans is
long and cumbersome.
Sowing of winter crops has been started and farmers badly need
money. But I couldn't lend (to) them due to restrictions on
withdrawal, Patil said.
Not only are money lenders struggling to lend, they are also
struggling to get paid.
How can we force people to pay back when they don't have money
to buy food. How will they pay us?"
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In 2001, India had 5.3 bank branches per 1,00,000 people in rural
areas. Today that stands at only 7.8 branches, according to Reserve
Bank of India data.
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Seema Chishti
The Indian Express
He said: Telling the public suddenly that the promissory notes you
have, do not promise anything with certainty, is a more complex
manifestation of authoritarianism, allegedly justified or so the
government claims because some of these notes, held by some
crooked people, involve black money. At one stroke the move
declares all Indians indeed all holders of Indian currency as
possibly crooks, unless they can establish they are not.
Asked if the move could cause any good as the Prime Minister
claims, Sen said; It is hard to see how. This will be as much of a
failure as the governments earlier promise of bringing black money
stacked away abroad back to India (and giving all Indians a sudden
gift what an empty promise!). The people who are best equipped
to avoid the intended trap of demonetisation are precisely the ones
who are seasoned dealers in black money not the common people
and small traders who are undergoing one more misery in addition
to all the deprivations and indignities from which they suffer.
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"The CPIO informed the appellant that the information being sought
was commercial information and held by them in trust for the third
party, therefore, it could not be provided and denied information
under section 8(1)(d)(commercial confidence) and (e)(fiduciary
capacity) of the RTI Act," Information Commissioner Manjula
Prasher noted in the order.
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Group.
"Therefore, even though the CPIO and the FAA (First Appellate
Authority) had denied information taking exemption u/s 8(1)(d)
and (e) of the RTI Act, Section 8(1)(j) also became applicable in the
matter as the information sought was about third party's loan
account. The appellant was not present to point out any
shortcoming in the decision," Prasher pointed out in the order.
"He had not mentioned any larger public interest in the matter, let
alone substantiate in his RTI application. Further he had not
requested for any copies of documents while seeking information
which was added in his second appeal," she said.
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Debashis Basu
The Business Standard
Published on November 28, 2016
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3. Tax terrorism: For the past year, the discourse about governance
has changed from philosophy (minimum government) to lofty
schemes (Clean India, Startup India, Stand Up India, Make in
India) to coercion. In tune with this, on November 16, the
government inserted Rule 12E of the income tax Act which states
"The prescribed authority under sub-section (2) of section 143 shall
be an income-tax authority not below the rank of an Income-tax
Officer..." Section 143 covers underreporting of income (or what is
known as the scrutiny section). Earlier, cases under this were picked
by a computerised system or needed the okay of an IT
commissioner. It now gives powers to the lowest rung of IT
administration, with enormous scope for misuse.
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Nilanjan Mukhopadhyay
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Unruly queues are nothing new to India and they reflect the innate
habit of people to benefit at others expense. It is only a rare person
who stands in a line and does not grudge the position of the one
ahead. Moreover, evidence has surfaced that many are paid to stand
as proxy, suggesting that unscrupulous tactics continue to be used
by those with the capacity to forsake a part of their ill-gotten
wealth. The risk that Modi has taken is grave for while few will
publicly dispute his argument even those who are hiring people to
stand in lines on their behalf there is no knowing that when
before an EVM, if people will put the stamp on Modi once again.
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Gurcharan Das
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Some may opt to disclose their black money as current income and
get away by legally paying around 35% tax; this too should be
welcomed. Another alternative is to offer low-yielding, long-term
bonds that would convert black to white; the government would
gain by getting money cheaply. The purpose is to diminish the fear
in the most productive groups in society that create most of the
jobs. Dont demonize them: this is not a dharmayuddha. The
objective is to change old, ingrained habits for the betterment of
society.
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9) Do not attempt to end black money. People should not break the
law but we should overlook small transgressions, just like we ignore
pedestrians who cross on a red light. Cash lubricates the system and
a cashless society is the road to dictatorship.
10) Dont touch the aam aadmis tender. Finally, the next time you
want to demonetise, flood the market first with 5,000 and
10,000-rupee notes; once the black money has moved up to these
higher notes, demonetise only the Rs 5,000 and Rs 10,000 notes.
Spare the aam aadmi.
Brijesh Kalappa
The Times of India
Published on November 27, 2016
Evidence emerging over the last fortnight clearly indicates that not
a single economists of any significance has been consulted while
conducting this demonetisation exercise. While the foremost name
in the list of Economists from India is Dr. Amartya Sen, who is a
Nobel Prize Winner and who has obviously not been consulted, but
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India is not at a stage which can today afford to take any advise
given by a charlatan or witch man. The impact on the economy and
its people are far too large and will leave an indelible impact in the
days to come. India can also afford to obtain the best economic
advise from financial experts and Economists in the World. Nearly
40 Economists who have won Nobel Prize for Economics are still
around but not a single one has been consulted. Was there any
dearth of money/consultancy fees which could not be made
available to them while availing such consultancy from the
economists before announcing Demonetisation? The 300 million
middle class are keen of knowing as to what prevented this
Government from taking expert advise of Economists. While
unquestioningly, regular economic policies can easily be handled by
finance Ministry, such large scale decision impacting crores of
individuals ought not to have been taken by the layman.
Over 70 people have died for various reasons owing to this act of
demonetization. These lives could have been saved if proper advise
had been availed of, well in time. Neither the Finance Minister nor
the Prime Minister are experts on economic affairs. The moot
question is who guided them in taking this catastrophic decision
causing death and destruction across the country?
When India won its freedom in 1947 even an item as small and
insignificant as a pin had to be imported. When members of the
Indian national Congress are pilloried by asking as to what is the
contribution of the Party to the nation, every Congressman responds
by stating that the very fact that we are the only front ranking
nation in the world which become free in 1947 with such large
population, thanks to the INCs efforts.
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The GDP Growth has fallen from the time when the UPA ruled the
nation. Job creation is far below the promised 2 Crore jobs promised
by Modi Ji during General Election, 2014. It is in this background
that Shri Modi announced demonetisation plan.
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