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Dutch banks, government services hit by cyber attacks

Over the weekend, ING, the country’s largest bank, and ABN Amro, were also hit by DDoS attacks. The services are restored now and the banks said clients’ info were not compromised or leaked.

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The top 3 banks in the Netherlands have been targeted in rolling multiple cyber attacks over the past week, blocking access to websites and internet banking services, they said on Monday.

It is unclear who is behind the so-called distributed denial of service (DDoS) attacks.

Rabobank, the Netherlands’ second largest lender, had a failure that lasted about three hours on Monday morning. Customers had no access to mobile and Internet banking due to the disruption, Xinhua reported.

Around noon, the website of the Dutch tax authorities was also hit by a DDoS attack.

Over the weekend, ING, the country’s largest bank, and ABN Amro, were also hit by DDoS attacks. The services are restored now and the banks said clients’ info were not compromised or leaked.

When hit by a DDoS attack, servers from multiple locations are bombarded simultaneously with requests that make them overloaded. As a result, the website and online services become inaccessible.

Malicious DDoS attacks usually run via so-called bot networks, composed of computers or other devices infected with malicious software. From a central point, the devices can then be controlled, for example to send spam. All these devices can be instructed to visit a website hundreds of times per minute.

According to the Dutch Payments Association, banks are constantly being confronted with this type of attack. Usually, the reason for the DDoS attacks is not clear.

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Urgent need to rationalise weights under retail inflation: Report

“Clearly, the inflation numbers based on a broken CPI methodology hides more things than it reveals and RBI will be constrained in its policy decisions, an irony in itself!”

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New Delhi, Oct 23 : There is an urgent need to rationalise the weights under retail inflation, a SBI Ecowrap report said on Friday.

According to the report, inflation numbers based on a broken CPI methodology hides more things than it reveals.

Consequently, the headline inflation constrains the RBI in its policy decisions.

“With the recent changes in CPI (IW), we again raise questions on the validity of continuing with existing weights in Headline CPI,” the report said.

The weighting pattern of food items in CPI, at 45.86 per cent, is based on 2011-12 Consumer Expenditure Survey (CES).

This is significantly different from the share of food and beverages (30 per cent) in the ‘Private Final Consumption Expenditure’ published by the National Account Statistics (NAS).

“Against such a backdrop, we again reiterate there is urgent need to rationalise the weights under CPI,” the report said.

“If we provisionally calculate the new CPI by looking at revised weights of CPI (IW) with 2016 as the base and logically assuming the same trend in CPI, we find that the weights of food in CPI could decline by at least as much as 6 per cent, thus shaving of 50 basis points from current headline CPI at 7.34 per cent.”

Such rebasing of CPI, the report pointed out, also finds mention in MPC minutes.

“However, the weights of services could jump by at least 7 per cent through the postulated increase in service consumption pushing up the weighted contribution of miscellaneous inflation by 42 basis points,” the Ecowrap said.

“Thus, the overall impact will depend on the strength of food and services, though the bottomline is the revised hypothetical CPI is more representative of demand pressures as weights of services and food could be almost in equal proportion.”

However, the report cited that CPI is drawn from “CES and such survey is still pending since 2017”.

“Adding to woes, the Oct’ 20 CPI inflation will be more than 7 per cent due to unexpected rains in major part of the country,” it said.

“Clearly, the inflation numbers based on a broken CPI methodology hides more things than it reveals and RBI will be constrained in its policy decisions, an irony in itself!”

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Past policy actions’ transmission to help ease conditions, RBI Guv in MPC meet

“As supply chains adapt to the new conditions, recovery is expected to be stronger and sustained. To achieve this outcome, an accommodative monetary policy is needed at this juncture.”

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Shaktikanta Das

New Delhi, Oct 23 : The ongoing transmission of past monetary policy actions would help ease financial conditions, RBI Governor Shaktikanta Das had said during the Monetary Policy Committee meet earlier this month, according to its minutes released on Friday.

The statement assumes significance as past rate cut transmission will provide lower interest rates which, in effect, is expected to trigger consumption and economic revival.

Besides, the Governor said that there exists space for future rate cuts if the inflation evolves in line with the expectations.

“This space needs to be used judiciously to support recovery in growth,” he said.

Das said that monetary policy at this stage has to provide adequate support to ensure a robust revival of the economy from the devastating effects of Covid-19, while at the same time, ensuring that any persistence of elevated inflation does not lead to unanchoring of inflation expectations.

“With the supply side disruptions that are seen to drive the current inflationary pressures likely to be transient and wane out in months ahead as economy normalises, there is merit in looking through the current high levels of inflation and persevere with the accommodative stance for monetary policy as long as necessary to revive growth on a durable basis,” he said.

“Moreover, taking into account the projected moderation in inflation and the large output loss, I vote to keep the policy rate unchanged at present and continue with the accommodative stance, during the current financial year and into the next financial year, at the least. This would help to reduce uncertainty and market volatility. This would also enhance confidence in the monetary policy resolve to support the growth recovery process while ensuring that inflation remains within the target,” he added.

The penultimate meet of the MPC in 2020 was conducted from October 7 to 9.

The MPC decided to maintain the repo — or short-term lending — rate for commercial banks at 4 per cent on the back of persistently high inflation, fanned in part due to supply side disruptions along with seasonal factors.

The meeting was attended by all the members, including Shashanka Bhide, Ashima Goyal, Jayanth R. Varma, Mridul K. Saggar, and Michael Debabrata Patra.

Besides, other members cited the need support the economic recovery.

In the meeting, RBI Deputy Governor Patra said that under these conditions, it is essential for monetary policy to remain accommodative and opportunistically exploit the headroom that opens up when inflation recedes, as it is projected in the second half of 2020-21.

“Three aspects need to be emphasised. First, it is important to separate false starts from durable growth drivers. In this context, all efforts need to be trained on the revival of investment. Second, in the evolving situation in which monetary policy is committed to an accommodative stance, it is necessary to monitor inflation dynamics closely for signs of generalization and persistence,” he said.

“For this purpose, all indicators of aggregate demand, including monetary and credit aggregates, warrant continuous examination for inflation impulses. Third, with unprecedented contractions in economic activity and elevated inflation posing a razor’s edge trade-off fraught with uncertainty, forward guidance has to be clear and decisive.”

Regarding inflation, Saggar said that inflation is currently above the upper tolerance band, it is not monetary in nature.

He pointed out supply disruption in food, increase in taxes on fuel and liquor, and surge in gold prices “catalysed by risk-off” has lifted inflation.

“In my view, headline inflation should start softening from October. Apart from favourable base effects, the unlocking has picked speed and would significantly reduce supply chain bottlenecks causing both agriculture and non-agricultural prices to correct,” he said.

“Monsoon risks to inflation have dissipated. Cumulative rainfall has been 9 per cent above long period average with its temporal and spatial distribution satisfactory. Area sown under Kharif has expanded by 4.8 per cent. With resumption of businesses by small poultry, high prices in protein items should witness some correction.”

On his part, Bhide said that there are clearly uncertainties facing the growth and inflation projections.

There is also uncertainty over the speed with which the Covid-19 pandemic is brought under control, which also affects growth and inflation scenarios in the next 2-3 quarters, he said.

“Towards the end of Q2, there are indications of revival of the economy after the relaxation of restrictions on transportation and businesses across the country,” Bhide said.

“As supply chains adapt to the new conditions, recovery is expected to be stronger and sustained. To achieve this outcome, an accommodative monetary policy is needed at this juncture.”

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AISAM likely to take key decisions on Air India divestment on Saturday

But Air India, with vast pool of international flying slots and running overseas operations under the Vande Bharat scheme, is expected to get some investor interest.

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Air India 777

New Delhi, Oct 23 : The Centre’s top group of ministers looking into Air India divestment is slated to meet on Saturday with the agenda ranging from extending the process to allowing greater debt re-structuring.

These key decisions might come at a time when the divestment deadline of October 31 is fast approaching.

The meeting of the AISAM (Air India Specific Alternative Mechanism), headed by Home Minister Amit Shah, will be conducted via video conferencing. Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri, Commerce Minister Piyush Goyal amongst others, will be participating.

As per sources, extending the deadline for submission of initial bid or expression of interest (EoI) till December is on the cards.

Another significant change that might be put forth for AISAM’s approval will be a change in the deal’s financial structure, especially concerning the airline’s debt.

Under this change, sources said that the bidders would be given the option to decide on the quantum of debt on the Air India books that they will like to absorb rather than freezing the debt amount and seeking investors’ bids.

As per the Air India EoI, floated by DIPAM in January, of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.

With the proposed changes, buyers will decide on the level of debt that they will take and the one taking the largest debt may be considered favourable to be declared winner.

The Centre is, however, said to be finding it tough to get investors on board.

A Tata Group-led consortium was considered the favourite to take over the airline earlier but its interest lately has been subdued. With foreign airlines bleeding over fall in air travel during the pandemic, getting investors would be difficult.

But Air India, with vast pool of international flying slots and running overseas operations under the Vande Bharat scheme, is expected to get some investor interest.

Air India has been been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd, and since then is flying on government budgetary support, adding pressure to central resources.

Air India disinvestment will be a key component of this years sell target of Rs 2.1 lakh crore. The government has so far mobilised a mere Rs 5,500 crore as disinvestment receipts.

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