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India-born Gita Gopinath joins IMF as its first female chief economist

Press Trust of India

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Washington: Mysore-born Gita Gopinath has joined International Monetary Fund as its chief economist, becoming the first woman to occupy the top IMF post.

Gopinath’s joined last week at a time, when she believes the world is experiencing a retreat from globalisation, posing challenges to multilateral institutions.

The John Zwaanstra professor of International Studies and Economics at Harvard University, Gopinath, 47, succeeds Maurice (Maury) Obstfeld as Economic Counsellor and Director of the IMF’s Research Department. Obstfeld retired December 31.

 

Announcing her appointment on October 1, IMF Managing Director Christine Lagarde described her as “one of the world’s outstanding economists with impeccable academic credentials, a proven track record of intellectual leadership and extensive international experience.” The 11th chief economist of the IMF, Gopinath in a recent interview to The Harvard Gazette described her appointment at the IMF as a “tremendous honour” and said the appointment of the first ever woman for this position speaks highly of IMF’s Managing Director Lagarde.

“She is phenomenal, not just in her leadership of the IMF but as a role model for women around the world,” she said.

Identifying some of her top priorities at the IMF, Gopinath told The Harvard Gazette that she would like the IMF to continue to be a place that provides intellectual leadership on important policy questions.

“Among the research issues that I would like to push, one would be understanding the role of dominant currencies like the dollar in international trade and finance. We could do more on the empirical side to try to understand countries’ dollar exposures and on the theoretical side in terms of the implications for international spillovers, consequences of dollar shortages, etc,” she said.

Most countries invoice their trade in dollars and borrow internationally in dollars. This is a central part of the international price system and the international financial system and it will be exciting to explore its consequences in greater depth with the IMF, she said.

Gopinath considers the perceived retreat from globalisation as one of the top challenges being faced by the IMF. “The one (biggest issues being faced by the IMF) that is absolutely clear and present is that we are seeing the first serious retreat from globalisation. This has not happened in the past 50 or 60 years, when the world moved toward lower tariffs and increasing trade across countries,” she told the prestigious Harvard publication.

“Over the past several months, we have the US-imposed tariffs and retaliation to them from China and other nations. There is in general growing uncertainty about trade policy, including the one arising out of Brexit [the British move to leave the European Union].

“While the trade has reduced global poverty and raised livelihoods, its consequences for inequality, and on whether the rules of engagement are fair, are real concerns that need to be addressed,” she said.

Gopinath said there is also a concern about whether there is the right multilateral institutions and frameworks in place to make sure everybody feels that there is fairness in trade. “And the same goes for capital flows,” she added.

“Foreign direct investment [FDI] was always viewed very favourably by countries. But because most of the FDI is now in tech-heavy firms, there are growing concerns about national security and international property theft. So I believe this retreat from globalisation and this retreat from multilateralism is quite unique to the times we are living in,” Gopinath said.

Another important concern, she said, is the health of emerging markets as the US continues to normalize its interest rates. The capital flows to several markets have reversed, putting pressure on their exchange rates and consequently on inflation, and on balance sheets, given that several emerging markets borrow heavily in dollars, said the IMF chief economist.


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RBI asks banks to grout ATMs to wall, floor for security by September-end

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Mumbai: The Reserve Bank asked banks to ensure their ATMs are grouted to a wall, pillar, or floor by September-end, except those installed in high secured premises such as airports, to enhance security of the cash vending machines.

In 2016, the RBI had st up a Committee on Currency Movement (CCM) to review the entire gamut of security of treasure in transit.

Based on the recommendations of the panel, the central bank has now issued instructions aimed at mitigating risks in ATM operations and enhancing security.

 

As part of the security measures, all “ATMs shall be operated for cash replenishment only with digital One Time Combination (OTC) locks”.

Also, “All ATMs shall be grouted to a structure (wall, pillar, floor, etc.) by September 30, 2019, except for ATMs installed in highly secured premises such as airports, etc. which have adequate CCTV coverage and are guarded by state/central security personnel”.

Further, banks may also consider rolling out a comprehensive e-surveillance mechanism at the ATMs to ensure timely alerts and quick response, it said.

The new measures to be adopted by banks are in addition to the existing instructions, practices and guidance issued by the RBI and law enforcement agencies.

The RBI also warned the banks that non-adherence of timelines or non-observance of the instructions would attract regulatory action including levy of penalty.

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SBI refuses to disclose communication from RBI, govt on electoral bonds

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New Delhi: The State Bank of India has refused to disclose any communication it received from the government or the Reserve Bank of India on electoral bonds, terming it “personal information” and held in “fiduciary capacity”.

Responding to an RTI filed by Pune-based activist Vihar Durve who had demanded copies of all letters, correspondence, directions, notifications or e-mails received from the RBI or any government department between 2017 and 2019, the SBI said it cannot be provided by it.

The bank cited two exemption clauses under the RTI Act to deny information — Section 8(1)(e) which pertains to information held in fiduciary capacity and Section 8(1)(J) which pertains to personal information of a person which has no link to any public activity.

 

“Information sought by the applicant cannot be disclosed as it is in fiduciary capacity, disclosure of which is exempted under Section 8(1)(e) and 8(1)(j) of the RTI Act, 2005,” the Central Public Information Officer of the bank said in his reply.

The bank also refused to give any details of action taken by it on such communications from the RBI and the government.

The electoral bonds, for giving donations to political parties, are being sold through SBI only. The sale opens in SBI branches when the Finance Ministry issues a notification of their sale for a given period.

The scheme of electoral bonds notified by the Centre in 2018 has been challenged in the Supreme Court.

Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly of the State, shall be eligible to receive the bonds.

The bonds may be purchased by a person who is a citizen of India “or incorporated or established in India,” the government had said in a statement last year.

The bonds remain valid for 15 days and can be encashed by an eligible political party only through an account with the authorised bank within that period only.

A voluntary group working in the field of electoral reforms, Association for Democratic Reforms (ADR), has demanded a stay on the sale while the CPI(M) has challenged it before the Supreme Court in separate petitions.

ADR recently filed an application in the Supreme Court seeking a stay on the Electoral Bond Scheme, 2018 which was notified by the Centre in January last year.

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Walmart’s Flipkart, Indian startup GOQii settle dispute over sharp discounting

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New Delhi: Walmart unit Flipkart has settled a legal dispute with an Indian startup that alleged it suffered losses because its products were sharply discounted on the global retailer’s website.

GOQii, a seller of smartwatch-type health devices, sued Flipkart last month in a Mumbai court, alleging its devices were discounted by around 70 per cent to the retail price, much more than the two sides had agreed. The court had, as an interim measure, ordered device sales to be halted on Flipkart.

In a joint statement , the companies said the dispute had been resolved and GOQii health devices would again be available on Flipkart. They didn’t say how the settlement was reached.

 

Vishal Gondal, CEO of GOQii, told Reuters the company would withdraw the case against Flipkart. The e-commerce retailer’s “team worked on a resolution benefitting the brand and the customers”, Gondal said in the statement.

The legal spat was seen as a test case of the giant retailer’s operating strategy in the country.

Small traders and a right-wing group close to Prime Minister Narendra Modi’s ruling party have raised concerns about large e-commerce companies, saying they burn billions of dollars deeply discounting some products to lure customers onto their sites, in the expectation that they will also buy other goods.

GOQii said it signed an agreement last year with a Flipkart unit to sell two of its devices at a price not below 1,999 rupees (USD 28.63) and 1,499 rupees. It later found the devices were being sold for 999 rupees and 699 rupees, calling it “unauthorized” discounting.

In response, Flipkart said it reserved “the right to institute actions for defamation, both civil and criminal”, arguing it wasn’t responsible for any discounts which are determined by third-party firms which sell via its website.

The two companies struck a friendlier tone in their joint-statement on Friday as they brought the legal battle to an end.

“We have ensured constant engagement with GOQii to resolve any differences,” Flipkart said in the statement.

With a 19 per cent market share, GOQii was the second-biggest player in India’s so-called wearables market last year, data from industry tracker IDC showed. The market is dominated by China’s Xiaomi, with Samsung a small player.

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