New Delhi :While the problem of banks handing out torn and mutilated currency to depositors has hogged the limelight off late, the bank customers’ woes may be far from over. Many banks are refusing to exchange old and torn notes of the Rs 2,000 denomination with many saying that the Reserve Bank of India (RBI) does not have any rules in place that require banks to exchange torn Rs 2,000 notes carried by a depositor. Bank officials manning cash counters are turning away customers saying that they should “hold on to their torn Rs 2,000 notes till RBI comes out with a policy to exchange such notes.”
When certain officials at some bank branches were reminded that the RBI has rules for replacement of all torn currency, they said that the old rules do not apply to the new denomination of Rs 2,000 and Rs 200. So why are banks refusing to exchange soiled Rs 2,000 notes by throwing the rule book at customers?
The RBI has robust rules in place for exchange of soiled currency but banks seem to be interpreting them in a way to exclude those with Rs 2,000 denomination from the exchange process. The Reserve Bank of India (Note Refund) Rules 2009 clearly lay down rules for all mutilated notes above the denomination of Rs 50. The rules regarding mutilated notes states, “if the area of the single largest undivided piece of the mutilated note of rupees fifty, rupees one hundred, rupees five hundred and rupees one thousand note presented is at least 70, 75, 80 and 84 square centimeters, respectively, the same may be paid for full value.” The rules further state if the mutilated notes presented to banks is less than these specifications, banks need to pay only half the value on the same.
While these rules pertained to the pre-demonetisation era, the Rs 1,000 note was declared illegal and replaced by the Rs 2,000 note on November 8, 2016. Banks seem to be reluctant to apply the rules that pertained to the Rs 1,000 note to the new Rs 2,000 note. The last time RBI amended its note exchange rules was on July 3, 2017. These new rules states, “In order to facilitate quicker exchange facilities, the definition of soiled note has been expanded. A ‘soiled note’ means a note which has become dirty due to normal wear and tear and also includes a two piece note pasted together wherein both the pieces presented belong to the same note and form the entire note with no essential feature missing. These notes should be accepted over bank counters in payment of Government dues and for credit to accounts of the public maintained with banks.”
While the RBI’s new rules clearly define ‘a soiled note’ irrespective of their denomination, banks seem to be interpreting it in a way to exclude the Rs 2,000 note from the definition. One reason for this behaviour of banks is that the RBI’s new rules which were announced after the note-ban episode do not specify the Rs 2,000 note in particular. These new rules were added to the original Reserve Bank of India (Note Refund) Rules 2009 and the amended RBI rules still have no specific mention of the Rs 2,000 denomination note.
Another reason is that the RBI’s existing note exchange rules determine the amount receivable by the person with a soiled note on the basis of its size which is determined by the value of the currency. But after the RBI started issuing new notes in new dimensions’ post demonetisation, there has been a reduction in the dimensions of every single denomination of currency notes barring the Rs 100 note.
For instance, the RBI’s original rules state that they the highest denomination of Rs 1,000 should have an undivided single piece of atleast 84 per cent of the note’s area for a person to get back the full value of the amount from the bank. The erstwhile Rs 1,000 note had an area of 129 square centimeters. Similarly, the old Rs 50 denomination note had an area of 115 square centimeters. A torn Rs 50 note needed to have a single undivided area of at least 70 per cent of its original area (or at least 90 square centimeters for a person to get back the full value of his torn note.) The irony is that the highest value of currency in India at the moment is smaller in area than even the Rs 50 note (of the older versions). The new Rs 2,000 note has an area of 110 square centimeters. Since the RBI has no specific rules of refund of torn Rs 2,000 notes, banks seem to be in the dark on what rule of what note do they apply to a torn Rs 2,000 note while exchanging it for the common man. Even the Rs 200 denomination which was introduced recently seems to face a similar dilemma.
An RBI official said that the finance ministry should be clarifying on the issue rather than the central bank. Mr Manmohan Sachdeva, Director, Department of Economic Affairs in India’s Ministry of Finance told Business Standard, “We are at an advanced stage of finalising new rules for exchange of torn currency of the new denominations. The Law Ministry is examining the new rules and we will soon notify the same.”
India one of world’s fastest growing large economies:IMF
Washington: India has been one of the fastest growing large economies in the world, the International Monetary Fund (IMF) has said, asserting that the country has carried out several key reforms in the last five years, but more needs to be done.
Responding to a question on India’s economic development in the last five years at a fortnightly news conference here, IMF communications director Gerry Rice Thursday said, “India has of course been one of the world’s fastest growing large economies of late, with growth averaging about seven per cent over the past five years.”
“Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has,” he said.
Details about the Indian economy would be revealed in the upcoming World Economic Outlook (WEO) survey report to be released by the IMF ahead of the annual spring meeting with the World Bank next month, he said.
This report would be the first under Indian American economist Gita Gopinath, who is now IMF’s chief economist.
“The WEO will go into more details. But amongst the policy priorities, we would include accelerate the cleanup of banks and corporate balance sheets, continue fiscal consolidation, both at centre and state levels, and broadly maintain the reform momentum in terms of structural reforms in factor markets, labour, land reforms and further enhancing the business climate to achieve faster and more inclusive growth,” Rice said.
Fitch cuts India GDP growth forecast for FY20 to 6.8 pc
New Delhi: Fitch Ratings on Friday cut India’s economic growth forecast for the next financial year starting April 1, to 6.8 per cent from its previous estimate of 7 per cent, on weaker than expected momentum in the economy.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 per cent, followed by 7.1 per cent in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2 per cent from 7.8 per cent on December 6.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7 per cent from 7.3 per cent and 7.1 per cent from 7.3 per cent, respectively. According to Fitch, the RBI has adopted a more dovish monetary policy stance and cut interest rates by 0.25 percentage at its February 2019 meeting, a move supported by steadily decelerating headline inflation.
“We have changed our rate outlook and we now expect another 25 bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said. “On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers,” it added. Fitch said, it’s benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption.
India’s total wireless subscribers grew to 1.18 bn in January 2019: TRAI
New Delhi: India’s total wireless subscribers grew by 0.51 percent to 1,181.97 million (1.18 bn) in January 2019, as per a report by telecom regularor TRAI.
Total wireless subscribers (GSM, CDMA & LTE) increased from 1,176.00 million at the end of December 2018 to 1,181.97 million at the end of January 2019, thereby registering a monthly growth rate of 0.51 percent, the TRAI report said.
As on January 31, 2019, the private access service providers held 89.95 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.05%, the regulator said in its report.
The Wireless subscription in urban areas increased from 647.52 million at the end of December 2018 to 654.20 million at the end of January 2019, however wireless subscriptions in rural areas declined from 528.48 million to 527.77 million during the month.
The monthly growth rates of urban wireless subscription was1.03 percent and rural wireless subscription was 0.13%, the report said
The Wireless Tele-density in India increased from 89.78 at the end of December 2018 to 90.15 at the end of January 2019.
The Urban Wireless Tele-density increased from 155.48 at the end of December 2018 to 156.85 at the end of January 2019, however Rural Wireless Tele-density declined from 59.15 to 59.04 during the same period.
The share of urban and rural wireless subscribers in total number of wireless subscribers was 55.35 percent and 44.65 percent respectively at the end of January 2019.
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