Thursday , April 2 2020
Home / Tag Archives: Indian Economy/Financial Markets

Tag Archives: Indian Economy/Financial Markets

RBI turns 85!

Starting on April 1 (Fool’s day!) 1935, RBI completes 85 years today. Aunindyo Chakravarty has a piece on the anniversary in the Quint: During the First World War, India spent more than 8 per cent of its GDP to finance Britain’s war effort. About half of that money went as direct cash contribution, a fifth went in low-interest loans and the remaining went in kind. This massive drain should have caused inflation, raised interest rates and weakened the rupee. But, the British Empire...

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As Andhra Bank Fades Into the Pages of History, an Emotional Sting for Telugu States

Today, 6 public sector banks were amalgamated with 4 banks: Union Bank amalgamates Andhra Bank and Corporation Bank Indian Bank amalgamates Allahabad Bank Canara Bank amalgamates Syndicate Bank PNB amalgamates United Bank and OBC Gali Nagaraja pays tribute to Andhra Bank in this Wire piece: Andhra Bank, a premier public sector bank with deep roots in the erstwhile undivided Andhra Pradesh, is all set to vanish from public view from April 1, in a move that draws the curtains on a...

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What if a digital virus hits our payment systems?

My new article on moneycontrol. I argue that we should go slow on the digital payment push. The entire system could just break down due to a computer virus. Lessons from Covid19 should be learnt. This entry was posted on April 1, 2020 at 10:34 am and is filed under Central Banks / Monetary Policy, Economics - macro, micro etc, Indian Economy/Financial Markets. You can follow any responses to this entry through the RSS 2.0 feed....

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RBI DG Mr. N.S. Vishwanathan retires 3 months before his tenure

As I wrote this post on BP Kanungo’s extension, one got this news late in the evening: Consequent upon the demitting of office by Shri N.S. Vishwanathan, Deputy Governor, the portfolios of the Deputy Governors would be as follows with effect from April 1, 2020.. Well, this is totally not needed. I had actually written saying Mr NSV is serving a one year extension and his term was to end in July-2020. Thus, we should either find a replacement by now or give him another extension given the...

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WMA limit for H1 2020-21 at Rs 1.2 lakh crore: highest so far

The virus is stretching most things under the sun. Just before the start of the new financial year, the RBI along with government announces WMA (Ways and Means Advances) limits. Anything over the limit becomes an overdraft.  The limit for H1 2020-21 is placed at Rs 1.2 lakh crore: It has been decided, in consultation with the Government of India, that the limits for Ways and Means Advances (WMA) for the first half of the financial year 2020-21 (April 2020 to September 2020) will be ₹...

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Shri B. P. Kanungo re-appointed as RBI Deputy Governor

I had argued earlier to give a fixed, long-term and non-renewable contract for RBI Governors and DGs. The government recently reappointed current RBI DG BP Kanungo whose three year term was to end on 2-April 2020. The Central Government has re-appointed Shri B. P. Kanungo as Deputy Governor, Reserve Bank of India for a further period of one year with effect from April 3, 2020, or until further orders, whichever is earlier, upon completion of his existing term on April 2, 2020. I can...

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RBI’s “whatever is necessary” moment arrives…

What a tough time Mr Shaktikanta Das is having! He has been dealing with so many crises ever since his appointment in Dec-2018. But the latest one of dealing with Covid19 crisis will surpass all challenges. There was criticism that RBI has not cut policy rates where other central banks have thrown whatever possible at the crisis. As per RBI Act, only the MPC can take the interest rate decision. The Act specifies the following: 45ZI. Meetings of Monetary Policy Committee.(1) The Bank...

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Yes Bank crisis: Why is a Financial Redressal Agency missing when it is needed most?

My new piece in moneycontrol. The piece reflects on how AT1 bonds reached retail investors and they have nowhere to go to file their complaints. The FSLRC had argued for a Financial Redressal Agency and there was a Task Force which advocated starting FRA by late 2016/early 2017. However, the plan was shelved only for retial investors to face the heat in Yes Bank case. I also connect the piece to Elizabeth Warren..:-) This entry was...

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Change in Yes Bank shareholding pattern

I have been wondering how Yes Bank shareholder pattern will look like. In Dec-2019, the shareholding pattern was like this. Yday, the Yes Bank released a new shareholding pattern This is how it is: No. of shareholders No. of fully paid up equity shares held In Rs crore) % ownership Dec-19 Mar-20 Dec-19 Mar-20 Dec-19 Mar-20 (A) Promoter & Promoter Group 3 3 21.2 21.0 8.33 1.67 (B) Public 1663707 1790312 233.8 1234.0 91.67 98.33 ICICI Bank  0.012 100.0 0.005 7.97 SBI 605.0...

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Post Yes Bank: Increasing concern for small private banks

This news in Mint on how deposits have declined in one of the small private sector banks in the last one week. The moratorium on Yes Bank is going to be lifted today at 6 PM. On opening Yes Bank website, pop comes this message: We will find out soon how good is this new foundation. One of the leading business TV journalists appeals to Yes bank depositors and not panic. Moody’s has also upgraded the bank by a notch which should provide some relief. Indian banking gets murkier. Private...

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