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Cash crunch in many parts of India as ATMs run dry; Centre says solution in 3 days

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New Delhi: Severe cash crisis has thrown life out of gear as ATMs have run dry in several states and cities including Telangana, Hyderabad, Varanasi, Vadodara, Bhopal, Patna and a few areas in Delhi.

Cash-starved customers in large numbers started queuing up outside ATMs and banks since early Tuesday morning to withdraw currency notes from vending machines, but most of them were either out of service or had a board notifying “no cash”.

Officials of several bank branches said that the banks’ infrastructure is unable to handle the huge rush resulting in long serpentine queue.

 

Meanwhile, SP Shukla, Mos Finance has said, “We’ve cash currency of Rs 1,25,000 crore right now. There is one problem that some states have less currency and others have more. Government has formed state-wise committee and RBI also formed committee to transfer currency from one state to other. It will be done in 3 days.”

People in Hyderabad told news Agency ANI, ‘We have been unable to withdraw cash from ATMs as the kiosks (ATM Kiosk), in several parts of the city, have run out of cash. We have visited several ATMs since yesterday but it is the situation everywhere’.

People in Varanasi said, ‘We do not know what or where the problem is but the common man is facing difficulty as the ATM Kiosks are not dispensing cash. We have visited 5-6 ATMs since morning. We need to pay for the admission of children and purchase groceries & vegetables’.

With public anger rising across the country over cash availability, some media reports quoting bank officials said that the sudden spike in number of people willing to withdraw huge amount of cash stems from the fear of ‘bail-in clause’ in the Financial Resolution and Deposit Insurance (FRDI) Bill.

In Vadodara People were complaining of inconvenience due to lack of currency in ATMs saying, ‘most of the ATMs were out of service, could only withdraw Rs 10,000 from one working ATM that also after spending a lot of time in the queue.

A few people outside ATMs in Delhi said, ‘We are facing cash crunch. Most of the ATMs are not dispensing cash, the ones which are dispensing, have only Rs 500 notes. We are facing difficulty, don’t know what to do’.

‘We are facing a cash crunch. ATMs are not dispensing cash. The situation has been the same since 15 days. We have visited several ATMs today as well, to no avail,’ people in Bhopal said.

The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, introduced in the Lok Sabha in August last year, has a ‘bail-in’ clause, which some experts say brings potential harm to deposits in the form of savings accounts. The bill is currently undergoing scrutiny by a joint parliamentary committee. The FRDI Bill proposes to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies and stock exchanges in case of insolvency. The draft bill empowers the Resolution Corporation to cancel the liability of a failing bank or convert the nature of the liability.

It does not specify deposit insurance amount. At present, all deposits up to INR 1 lakh are protected under the Deposit Insurance and Credit Guarantee Corporation Act that is sought to be repealed by this bill.

However, the government has time and again assured the Lok Sabha that money of all depositors in public sector banks will be protected and there is no need to create any fear psychosis.

“The government is committed to protecting every depositor in public sector banks and therefore we need not create any fear psychosis,” Finance Minister Arun Jaitley had said while replying to a discussion on ‘Supplementary Demand for Grants – Second Batch for 2017-18’in Lok Sabha.


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Indian billionaires’ wealth rose by Rs 2,200 crore a day in 2018: report

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New Delhi: Indian billionaires saw their fortunes swell by Rs 2,200 crore a day last year, with the top 1 per cent of the country’s richest getting richer by 39 per cent as against just 3 per cent increase in wealth for the bottom-half of the population, an Oxfam study said .Globally, billionaires’ fortunes rose by 12 per cent or USD 2.5 billion a day in 2018, whereas the poorest half of the world’s population saw their wealth decline by 11 per cent, the international rights group said in its annual study released before the start of the five-day World Economic Forum (WEF) Annual Meeting in this Swiss ski resort town.

Oxfam further said that 13.6 crore Indians, who make up the poorest 10 per cent of the country, continued to remain in debt since 2004.

Asking the political and business leaders who have gathered in Davos for the annual gathering of the rich and powerful of the world to take urgent steps to tackle the growing rich-poor divide, Oxfam said this increasing inequality is undermining the fight against poverty, damaging economies and fuelling public anger across the globe.

 

Oxfam International Executive Director Winnie Byanyima, one of the key participants at the WEF summit, said it is “morally outrageous” that a few wealthy individuals are amassing a growing share of India’s wealth, while the poor are struggling to eat their next meal or pay for their child’s medicines.

“If this obscene inequality between the top 1 per cent and the rest of India continues then it will lead to a complete collapse of the social and democratic structure of this country,” she added.

Noting that wealth is becoming even more concentrated, Oxfam said 26 people now own the same as the 3.8 billion people who make up the poorest half of humanity, down from 44 people last year.

The world’s richest man Jeff Bezos, founder of Amazon, saw his fortune increase to USD 112 billion and just 1 per cent of his fortune is equivalent to the whole health budget for Ethiopia, a country of 115 million people.

“India’s top 10 per cent of the population holds 77.4 per cent of the total national wealth. The contrast is even sharper for the top 1 per cent that holds 51.53 per cent of the national wealth. The bottom 60 per cent, the majority of the population, own merely 4.8 per cent of the national wealth. Wealth of top 9 billionaires is equivalent to the wealth of the bottom 50 per cent of the population,” Oxfam said while noting that high level of wealth disparity subverts democracy.

Between 2018 and 2022, India is estimated to produce 70 new dollar millionaires every day, Oxfam said.

“It (the survey) reveals how governments are exacerbating inequality by underfunding public services, such as healthcare and education, on the one hand, while under taxing corporations and the wealthy, and failing to clamp down on tax dodging on the other,” Oxfam India CEO Amitabh Behar said.
The survey also shows that women and girls are hardest hit by rising economic inequality, he added.

“The size of one’s bank account should not dictate how many years your children spend in school, or how long you live — yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care,” Byanyima said.

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Fugitive Choksi surrenders Indian passport in Antigua to ‘avoid extradition’

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Chandigarh:Fugitive tycoon Mehul Choksi has given up his Indian citizenship and surrendered his passport to Antigua, as per media reports.

This move by Choksi’s is being seen as an attempt to avoid his extradition to India. Antigua and India do not have an extradition treaty.

India had earlier handed over a request to Antigua for extradition of Mehul Choksi who is charged in connection with India’s biggest banking fraud, and now living in the Caribbean nation after taking its citizenship.

 

Official sources said a team comprising officials from the Ministry of External Affairs (MEA) and other agencies was sent to Antigua a couple of days ago to request the Antiguan authorities to extradite Choksi, wanted in India in the US$ 2 billion Punjab National bank scam.

As per reports, Antiguan authorities cleared Choksi’s citizenship in November 2017 after India did not give any adverse report to stall his application for it.

Choksi had fled India on January 4 this year and took oath of allegiance in Antigua on January 15. His citizenship was cleared in November 2017.

Choksi’s application for citizenship in Antigua in May 2017 was accompanied with clearance from the local police as required by norms, Antiguan newspaper the Daily Observer reported, citing a statement from the Citizenship by Investment Unit of Antigua and Barbuda (CIU).

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FPI outflow crosses Rs 4,000 crore in Jan so far

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New Delhi: Foreign investors have pulled out more than Rs 4,000 crore from the Indian capital markets so far in January, highlighting their cautious stance towards the country.

This comes following a collective net inflow of over Rs 17,000 crore in the capital markets both equity and debt by Foreign Portfolio Investors (FPIs) during November and December.

Prior to that, they had pulled out a massive Rs 38,905 crore in October.

 

According to data available with the depositories, FPIs withdrew a net amount of Rs 3,987 crore from equities and a net sum of Rs 53 crore from the debt market, taking the total outflow to Rs 4,040 crore during January 1-18.

Market experts believe that FPIs are continuing with their ‘wait and watch’ approach towards India.

Going ahead, the focus would be on the budget, progress on the economic growth front and general elections, they added.

Other factors such as movement in crude prices and currency as well as US-China trade relations will also play a role in FPI flows, they added.

Harsh Jain, COO at Groww, an online MF investment platform, said 2019 is likely to see a lot of volatility because of the rate hikes and dollar instability, but the Indian markets may be able to weather the storm.

“India offers better investment opportunities due to consistent growth, supportive global factors and attract valuations. We should expect positive inflow in coming months,” he added.

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