Economy

There will be no post-demonetisation limits on the withdrawal of cash from ATMs from February 1, The Reserve Bank of India announced on Monday. The RBI also removed limits on current, cash credit and overdraft accounts with immediate effect.

However, the Rs-24,000 limit on savings accounts will continue, though this too might be lifted soon, the bank said.

Banks have also been asked to encourage promoting digital payments and switching from cash to cashless transactions. On January 16, the RBI had raised the ATM withdrawal limit to Rs 10,000 a day from Rs 4,500.

However, it maintained the weekly cap at Rs 24,000 for savings accounts. The move also comes ahead of Assembly elections in five states - Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh - which begin from February 4.

Earlier, bankers said they expected the RBI to do away with the restrictions by the end of February. After Prime Minister Narendra Modi on November 8 demonetised Rs 500 and Rs 1,000, the RBI put restrictions on cash withdrawal from ATMs and banks owing to a shortage of currency notes.

Petroleum dealers in Tamil Nadu on Sunday announced they will not accept plastic money starting From Monday in protest against a one per cent levy plus taxes on all transactions made through debit and credit cards, prompting harried consumers rush to fuel outlets.

The Tamil Nadu Petroleum Dealers Association said it has received an intimation from banks that a Merchant Discount Rate of one per cent will be levied on all transactions done at the retail fuel outlets from January 9.

“We have suddenly received intimation from the bankers, reneging on their existing agreements with us, and for having decided to levy a Merchant Discount Rate (MDR) of one per cent plus taxes on all transactions done at our outlets,” KP Murali, President of the Association, said.

This move was a ‘unilateral’ one by bankers who had installed card swipe machines at the fuel outlets, he added.

Protesting the move, Murali said their margins were fixed on a per kilolitre (KL) basis and that they did not have scope to absorb these charges.

“We have specific mechanisms to compute the margin and these do not have any scope for Credit/Debit card MDR. This will lead to financial losses for the dealers,” he said.

Further, bankers were also “delaying payments” and not settling the entire dues, he alleged.

“The reconciliation of swipes to amount being credited to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community,” he said in a statement.

“We will not be able to withstand the financial losses generated by these transactions and have decided to stop accepting Credit/Debit Cards from January 9, 2017,” he added.

Hyder Ali, the association General Secretary, asked, “How can we do our business with losses?”

Murali said the dealers have requested Oil Marketing Companies and various authorities to intervene and address the situation.

Meanwhile, the announcement prompted the city motorists to rush to fuel outlets to fill their vehicle tanks by making payments through Debit and credit cards. Many motorists felt this will add to their difficulties with few ATMs dispensing cash due to demonetisation.

Country's GDP growth is estimated to slow down to 7.1% in current fiscal, from 7.6% in 2015-16, mainly due to slump in manufacturing, mining and construction sectors, the government data showed today without factoring in 'volatile' post-demonetization figures. Releasing the data compiled by the Central Statistics Office (CSO), Chief Statistician T C A Anant said the figures for November were available and examined but "it was felt in view of the policy of denotification of notes there is a high degree of volatility in theses figures and conscious decision was taken not make projection using the November figure".

Accordingly, the 'First Advance Estimates of National Income, 2016-17' did not reflect the impact of demonetization, effected on November 9 for ban of old Rs 500/1,000 notes, and are based on sectoral data for only seven months or till October. Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2016-17 is likely to attain a level of Rs 121.55 lakh crore, as against the Provisional Estimate of GDP for the year 2015-16 of Rs 113.50 lakh crore, released May 31, 2016. "The growth in GDP during 2016-17 is estimated at 7.1% as compared to the growth rate of 7.6% in 2015- 16," the CSO said.

The CSO projections on national income are now in line with the Reserve Bank's estimates, which too has lowered the GDP growth prospects to 7.1%. "Anticipated growth of real GVA at basic prices in 2016-17 is 7% against 7.2% in 2015-16," the CSO said. In value terms, the Gross Value Added (GVA) at constant prices is anticipated to increase from Rs 104.27 lakh crore in 2015-16 to Rs 111.53 lakh crore in 2016-17.

As per the data, performance of the all sectors, excluding 'agriculture' and 'public administration, defence and other services'. 'Agriculture, forestry and fishing' is expected to expand by 4.1% in 2016-17 from 1.2%. On the other hand, mining and quarrying is likely to shrink by 1.8% after recording a growth a 7.4% in 2015-16. Growth in manufacturing is expected to slow to 7.4% (from 9.3%) and construction activities to 2.9% (from 3.9%). As per the data, the per capita net national income (current prices) during 2016-17 is estimated to be Rs 1,03,007 showing a rise of 10.4% as compared to Rs 93,293 during 2015-16 with the growth rate of 7.4 percent.

Why were Rs 1000 and Rs 500 notes demonetised by the government?

Fifty days after the government announced that these notes would cease to be legal tender, Reserve Bank of India feels that the reasons behind the sudden announcement cannot be made public.

The monetary policy regulator also refused to give any details about the time it will take to replenish the currency notes.

"The query is in the nature of seeking future date of an event which is not defined as information as per Section 2(f) of the RTI Act," RBI said in response to an RTI query.

The Bankers' Bank refused to disclose reasons behind the demonetisation of about Rs 20 lakh crore of currency in the country citing Section 8(1)(a) of the Right to Information Act.

The section states, "Information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence."

Denying the information sought in the RTI application, the RBI did not give any reasons as to how exemption would apply in the given case as the decision was already taken and there was no way that disclosure of information would have fit in any of the reasons cited in section 8(1)(a) of the RTI Act.

"The clause of public interest would apply where exemption clause applies on the information sought by an applicant. In the present case, the information sought does not attract any exemption clause," former Central Information Commissioner Shailesh Gandhi told PTI.

He said law is very clear that when a public authority rejects to disclose an information it must give clear reasons as to how the exemption clause would apply in the given case.

Recently, it had refused to allow access to minutes of meetings held to decide on the issue of demonetisation of Rs 1000 and Rs 500 notes announced by Prime Minister Narendra Modi on November 8.

Responding to an RTI application filed by activist Venkatesh Nayak, the Banker's Bank refused to disclose the minutes of the crucial meetings of Central Board of Directors on the issue of demonetisation citing section 8(1)(a) of the transparency law.

Nayak said he will appeal against the decision, adding, while confidentiality prior to the making of the demonetisation decision is understandable, continued secrecy after the implementation of the decision is difficult to understand when crores of Indians are facing difficulties due to the shortage of cash in the economy.

He said the refusal to disclose the minutes of the board meeting where the decision was taken is perplexing to say the very least.

Former Information Commissioner Shailesh Gandhi also underlined that RBI has created an in-house "disclosure policy" which is against the letter and spirit of the RTI Act.

Gandhi has also filed a complaint before Central Information Commission against RBI for adopting the policy.

Government today appointed Viral V Acharya, a professor of Economics in the Department of Finance at the New York University (NYU), new Deputy Governor at the Reserve Bank of India.

The Appointments Committee of the Cabinet cleared the appointment for three years. He is taking over at a time when the central bank is facing criticism for repeated changes in the rules related to deposit and withdrawal of money, post-demonetisation.

Acharya is known for his research in theoretical and empirical analysis of systemic risks of the financial sector, its regulation and genesis in government-induced distortions, according to the profile on the NYU website.

The research areas also span across credit and liquidity risks, agency-theoretic foundations as well as their general equilibrium consequences, it says. Acharya is the C V Starr Professor of Economics in the Department of Finance at the New York University Stern School of Business (NYU-Stern).

An alumnus of IIT, Mumbai, with a degree of Bachelor of Technology in Computer Science and Engineering in 1995 and PhD in Finance from NYU-Stern in 2001, Acharya was with London Business School (2001-08) and served as the Academic Director of the Coller Institute of Private Equity at LBS (2007-09) and a Senior Houblon-Normal Research Fellow at the Bank of England (Summer 2008). 

The Cabinet on Wednesday approved promulgation of an ordinance to impose a penalty, including a jail term, for possession of the scrapped 500 and 1,000 rupee notes beyond a cut-off.

The Cabinet headed by Prime Minister Narendra Modi also approved an ordinance to amend the Reserve Bank of India Act to extinguish the liability of the government and the central bank on the demonetised high-denomination notes to prevent future litigations.

Official sources said the ordinance has been cleared, but did not say if the penal provisions would apply for holding the junked currency after the 50-day window to deposit them in banks ends as of December 30 or after March 31, till which time deposit of old currency notes at specified branches of the Reserve Bank after submitting a declaration form is open.

The penalty for holding old currency in excess of 10 notes may include financial fines and a jail term of up to four years in certain cases.

While announcing the demonetisation of the old currency on November 8, the government had allowed holders to either exchange them or deposit in bank and post office accounts. While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.

Paytm, digital transactions facilitate company alleged loss of 6.15 lakh by customers. Paytm claimed that Rs 6.15 lakh with 48 customers of fraud.

CBI have registered an FIR on the complaint of Paytm. The CBI does not intefere at all in such cases, provided the central government to send such cases to him or the Supreme Court or a High Court to issue such instructions.

CBI have registered an FIR against 15 residents of Delhi's Kalkaji, Govindpuri and Saket in addition to the unnamed officials of the parent company One97 Communications.  

Paytm Legal Manager M. Sivakumar has complained. According to the complaint, the company holding the 48 cases in which customers get their orders successfully despite refunded. However, it should be that customers did not refund after get satisfying and successfully delivery. But in all these 48 cases, all of this did not happen and was given refund of Rs 6.15 lakh.