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RBI identity has been damaged: Former governor Y V Reddy



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New Delhi, January 10: Former Reserve Bank of India Governor Y V Reddy expressed his deep concerns regarding the current state of affairs at the central bank and said that the institutional identity of the hallowed organisation has been sacrificed.

In a TV interview to the CNBC TV18, Reddy who served as RBI governor from September 2003 to 2008 said that the central bank is now only responsible for the monetary policy while it was a strong portfolio earlier.

“Now, there is a committee where the Cabinet secretary is the chair and the governor is a member,” he said.

Eversince Prime Minister Narendra Modi announced noteban on November 8, the U-turns and flip flops of RBI directives and Finance Ministry’s explanations thereof has put a big question on the autonomy of RBI as an institution. Indeed Governor Urjit Patel’s silence on demonetisation in the initial days of note ban made more noise than any of the central government’s Union Minister’s remark on the same.

Reddy pointed out that Modi government in May 2016 formed a search-cum-selection panel headed by Cabinet Secretary Pradeep Kumar Sinha to select deputy governors of RBI which is “a significant infringement” on the autonomy of the central bank. Earlier, reddy said, the RBI governor was the head of the panel for selection of his deputies.

“To be very frank, my own suspicion is that the institutional identity of the RBI has been damaged. Earlier, the RBI was the monetary authority. But it was a full-service central bank. The recent emphasis is that monetary policy is the main function,” Reddy said.

Raising some of the valid questions about Governor’s responsibility and accountability Reddy said, “Then is he not accountable to regulation? Is he not accountable to currency coins? There is confusion about relative importance. That relative importance is being decided more outside than within.”

He added, “The procedure applicable for a regulator has to be different from the procedure applicable to the monetary authority. In a central bank, regulation is one function. There is some lack of clarity.”

He further said that the fall in the in the status of RBI is not a recent event, and it has come “across political affiliations.”

Talking about the rampant criticism of RBI by media, economists and credit rating agencies, he said “reputational risk” is the worst risk and this time RBI’s credibility is at risk which is the worst risk. He added all this, “happening in the international opinion…is a national problem now and it is not just a political issue.”

Drawing an interesting comparison with the Army who is liable for the security of a country, the former governor said that RBI is responsible for the financial and monetary security of a country.

“The limited point is, the role of central bank in our economy is under threat and it is a national problem which has to be addressed as a national problem,” said Reddy.

The ex RBI governor also said demonetisation would incidentally benefit in the fight against black money by unearthing banking information of people. “So, demonetisation and black money link is not direct, it is indirect and incidental analytically. There are a lot of other implications as we go along,” he said.

If I have to be analytical, conceptual, academic and not ex-governor, the way I look at it is from a practical point of view, the pain has happened, going forward to the extent possible we would quickly relieve the pain. More important is gain, how do you maximise the gain? In that sense therefore I would say this is the beginning of handling the problem of black money,” he said.

The ex-governor refused to take any names and said that black money is a result of two most important factors– one being the administration and the other is the people. “Unless both are in some ways colluding it won’t happen.”

Wefornews Bureau


Market indices open in green




Mumbai, March 21: Taking a cue from global markets, the key Indian equity market indices on Wednesday opened higher ahead of the US Federal Reserve’s decision on the interest rates.

The Sensitive Index (Sensex) of the BSE, which had closed at 32,996.76 points on Tuesday, opened higher at 33,090.82 points.

Minutes into trading, it was quoting at 33,191.94 points, up by 195.18 points, or 0.59 per cent.

At the National Stock Exchange (NSE), the broader 51-scrip Nifty, which had closed at 10,124.35 points on Tuesday, was quoting at 10,184.70 points, up by 60.35 points or 0.60 per cent.

Amid volatility, the key Indian equity indices on Tuesday closed in the positive territory on short covering in IT and pharma stocks, even as some caution prevailed ahead of the US Federal Reserve’s meeting slated to begin.

The Sensex was up by 73.64 points or 0.22 per cent at the Tuesday’s closing. In the day’s trade, the barometer 30-scrip sensitive index had touched a high of 33,102.74 points and a low of 32,810.86 points. The Nifty too was up by 30.10 points or 0.30 per cent.

On Wednesday, Asian indices were mostly showing a positive trend. While Japan’s Nikkei 225 remained closed on local holiday, Hang Seng up by 1.15 per cent, South Korea’s Kospi was also up by 0.11 per cent. China’s Shanghai Composite index was quoting in green, up by 0.43 per cent.

Nasdaq closed in green, up by 0.27 per cent while FTSE 100 was also up by 0.26 per cent at the closing on Tuesday.


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Automobile manufacturers to hike vehicle prices

According to Tata Motors, it will increase prices of its entire passenger vehicles range by up to Rs 60,000 due to rising input costs. The new prices will be effective from April 1, 2018.



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Mumbai, March 20 : Automobile manufacturers have announced that they will hike vehicle prices, effective April 1, 2018 due to rising input costs.

According to Tata Motors, it will increase prices of its entire passenger vehicles range by up to Rs 60,000 due to rising input costs. The new prices will be effective from April 1, 2018.

“The rising input costs, changing market conditions and various external economic factors have compelled us to consider the price increase but we are optimistic on maintaining our growth trajectory in the coming year on the back of our robust product portfolio like Tiago, Hexa, Tigor and Nexon,” said Mayank Pareek, President, Passenger Vehicle Business, Tata Motors on Tuesday.

In addition, Nissan India also announced that prices of Nissan and of Datsun vehicles will be increased by up to 2 per cent across all available models.

Nissan currently offers the Micra, Sunny and the Terrano and Datsun offers the Datsun GO, GO+ and redi-GO in India.

“Due to rising input costs, we will be increasing the price of our Nissan and Datsun cars with effect from 1st April, 2018,” said Nissan Motor India’s Managing Director
Jerome Saigot.

“We are confident that our cars will continue to offer excellent value and choice to our customers.”

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RInfra moves Delhi HC seeking arbitration award from DMRC



New Delhi, March 20: Reliance Infrastructure’s (RInfra) subsidiary Delhi Airport Metro Express Private (DAMEPL) has moved the Delhi High Court seeking execution of the arbitration award of Rs 5,200 crore it had won against Delhi Metro Rail Corporation (DMRC).

According to a company statement issued on Tuesday: “In its petition filed under section 36 of the Arbitration and Conciliation Act in the division bench headed by Chief Justice of Delhi HC, DAMEPL has sought an order for the execution of the award dated May 11, 2017 passed by the Arbitral Tribunal and direct DMRC to pay Rs 5,200 crore.”

The claim includes principal amount of Rs 2,945.54 crore along with interest as on date.

The development comes after Delhi High Court on March 6, 2018 upheld the arbitration award as compensation along with interest to DAMEPL by a three-member arbitration tribunal.

Rinfra was awarded the compensation by the arbitration tribunal in a unanimous decision after 68 sittings over four years on the basis of termination provisions of the ‘Concession Agreement’.

DAMEPL had terminated the agreement with DMRC to run the ‘Airport Express Line’ in January 2013.

In June 2013, the project was handed over to DMRC and in the following September a three-member arbitration tribunal was appointed from a panel proposed by DMRC to resolve the dispute.

The ‘Airport Express Line’ was commissioned in February 2011.


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