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Who will be the next RBI governor, some probable candidates here

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Speculation is swirling in India’s local media on who will be the next central bank governor after Urjit Patel’s abrupt exit.

There’s no obvious successor yet, and given the cloud under which Patel left — amid a public fight with the government over the Reserve Bank of India’s autonomy — investors are naturally anxious about who will take the helm.

The first step is for Prime Minister Narendra Modi to appoint an interim governor, as has been the practice in the past, with that post likely to go to N. S. Vishwanathan, currently the most senior of the four deputies at the central bank. He could be in the job for several months until the government names Patel’s successor. In 2016, it took more than two months for then-deputy governor Patel to be named as a replacement for central bank chief Raghuram Rajan.

 

Here’s a look at some of the names making the rounds in the local press:

N.S. Vishwanathan, Deputy Governor, RBI

NS Vishwanathan, Deputy Governor at the RBI’s Third Bi-Monthly Monetary Policy Statement 2016-17. (Aniruddha Chowdhury/Mint)

Vishwanathan joined the central bank in 1981 and was appointed deputy governor for a three-year term in July 2016. An RBI board member said it’s traditional for the longest-serving deputy governor to take the helm until a permanent successor is found, which would make Vishwanathan the likely choice. Prior to becoming a deputy governor, he was an executive director at the central bank. Holding a Master’s degree in Economics from Bangalore University, his responsibilities at the RBI include banking regulation and risk monitoring.

Subhash Chandra Garg, Economic Affairs Secretary

A top bureaucrat in the Finance Ministry, Garg’s appointment would be a very clear signal from Modi’s administration that it wants greater control over the central bank. Garg, who is currently on the RBI’s board, has been pushing to change the central bank’s governance structure and get it to transfer more of its excess capital to the state. A former executive director at the World Bank, Garg has opposed the RBI using interest rate hikes to bolster the currency, which is Asia’s worst-performer this year.

Subir Gokarn, Executive Director at IMF

A former RBI deputy governor between 2009 and 2012, Gokarn has been India’s top official at the International Monetary Fund since 2015. At the central bank, he oversaw monetary policy, research, financial markets, communications, and deposit insurance. Holding a PhD in Economics from Case Western Reserve University in Cleveland, Ohio, Gokarn was also director of research at Brookings India and chief economist at Standard & Poor’s Asia Pacific.

Rajiv Kumar, Secretary, Department of Financial Services

A top bureaucrat in the financial services division of the Finance Ministry, Kumar has been focused on cleaning up the banking system since his appointment last year, including having to deal with fraud at a large state-owned bank and a debt default at a shadow lender. Prior to his current post, he worked at the personnel department, where he introduced an online system to improve bureaucracy. Kumar has a B.Sc degree in Zoology and a Master’s degree in public policy.

Shaktikanta Das, Former Finance Ministry Official

A former economic affairs secretary from 2015 to 2017, Das worked closely with the central bank. He is currently a member of the Finance Commission of India, and the government’s representative at the Group of 20 summits. Modi initially brought Das into the Finance Ministry to head up the revenue department, later moving him to economic affairs, where he helped to spearhead the prime minister’s controversial demonetization drive in 2016.

Hasmukh Adhia, Former Finance Secretary

Adhia, who has a PhD degree in yoga, retired as the top bureaucrat in the Finance Ministry last month. Finance Minister Arun Jaitley said Adhia declined several plum positions to pursue his favorite passions of spirituality and yoga, and spend more time with his son. Adhia had worked with Modi when the latter was chief minister of Gujarat state. Considered a close ally to the prime minister, he was one of the few people who knew about the surprise cash ban in 2016. Even though he was the top bureaucrat in the Finance Ministry, he hardly spoke on subjects other than taxation.


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Lenders propose to revive Jet Airways by management change: Sources

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New Delhi: Lenders, led by the SBI, are trying to revive debt-laden Jet Airways by change in management as they feel collapse of the airline will not be good for consumers and competition, a source said after the SBI chief met Finance Minister Arun Jaitley on Wednesday.
With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilot, State Bank of India Chairman Rajnish Kumar along with Aviation Secretary Pradip Singh Kharola and Principal Secretary to Prime Minister Nripendra Misra met Jaitley Wednesday afternoon.
Kumar said the meeting was to apprise the government, which is an important stakeholder, about the happenings in what was once India’s second-biggest airline, and not to discuss a bailout package.
He, however, emphatically stated that it was in the interest of the lenders and consumers to keep Jet Airways flying, and dragging the debt-ridden firm under bankruptcy proceedings is the last option.
Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. In case the airline collapses, 23,000 jobs would be at stake.
Though Kumar refused to share details of the lenders’ resolution plan, the source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management. Jet Airways is headed by Naresh Goyal, who currently holds 51 per cent stake.
Abu Dhabi based Etihad Airways has 24 per cent. There were media reports that Etihad has approached the SBI to purchase its 24 per cent stake in the airline. On getting a new player in Jet Airways, Kumar said, “No possibility is ruled out”.
“The dialogue with Etihad is on. It is not that they have conclusively decided that they will go out. But there are certain conditions which they want to be fulfilled and it is nothing but that the airline should be professionally managed and without any interference,” he said.
Lenders of Jet Airways have been working on a resolution plan for last five months and it is almost ready, Kumar said, adding “We will make every effort to keep Jet Airways flying and in no manner it is a bailout for any individual or any promoter whatsoever”.
The SBI chief said that resolution of a service industry, like airline, is nearly impossible under Insolvency and Bankruptcy Code (IBC) and is the last option.
“IBC means that we are grounding the airline. We will keep trying till such time we believe that all hope is lost. But as on date, I can say that not all hope is lost. We have not reached that decision point where we say enough is enough and nothing can be done,” Kumar said.
Chairman of the country’s largest bank said that the government is the most important stakeholder and it is the duty of the lenders to keep the government informed.
“It is in the lender’s Interest, the country’s interest, the aviation sector’s interest that Jet Airways continues to fly,” Kumar added. The pilots union of Jet Airways had on Tuesday threatened to stop flying from April 1 if their salaries are not paid by March 31.
The Directorate General of Civil Aviation (DGCA) said only 41 aircraft of the Jet Airways were currently available for operation and there may be “further attrition” of flights “in coming weeks”. 41 aircraft is just one-third of Jet’s fleet of 119 planes.

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Sebi asks exchanges dealing in agri-commodity derivatives to create fund for farmers

Press Trust of India

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New Delhi: Sebi on Wednesday asked the exchanges dealing with agri-commodity derivatives to create a fund for farmers and FPOs in which the regulatory fee forgone by the regulator would be deposited.
Besides, it has issued framework including action plan and guiding principles for the utilisation of fund. In September last year, the regulator had decided to levy a nominal fee of Rs 1 lakh per exchange instead of levying charges based on turnover slab rates and proposed to set up a fund with the fee foregone by it.
Sebi on Wednesday said, “it has been decided that the stock exchanges dealing with agricultural commodity derivatives shall create a separate fund earmarked for the benefit of farmers/FPOs (farmers producer organisations) in which the regulatory fee forgone by Sebi shall be deposited.”
For the fund, Sebi said the exchange needs to draw an action plan for full utilisation of foregone fee in any financial year to be utilised during the succeeding financial year. Such action plan shall be drawn up by the 10th of April of the year in which the fund has to be utilised, it added.
The exchanges would be required to disseminate the details of the action plan on their websites under intimation to Sebi.
The earmarked fund shall not be clubbed with any other funds such as Investor Protection Fund, Investor Services Fund, and Corporate Social Responsibility Funds, Sebi said.
Factors like waiver or subsidy in warehousing charges, reimbursement of cost of bags provided to farmers and FPOs for deposits on exchange platform, and subsidising of broker fee for farmers, amongothers, should be considered by exchanges for preparing action plan.

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Telecom subscriber base crosses 120 cr; Jio, BSNL, Airtel add customers

Press Trust of India

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New Delhi: The country’s telecom subscriber base for the third time crossed 120-crore mark with Reliance Jio, BSNL and Airtel adding new customers in January, according to a report released by telecom regulator Trai.
“The number of telephone subscribers in India increased from 1,197.87 million at the end of December 2018 to 1,203.77 million at the end of January 2019, thereby showing a monthly growth rate of 0.49 per cent,” the Telecom Regulatory Authority of India said in monthly subscriber report for January 2019.
Earlier, the subscriber base crossed the 120-crore mark in July 2017 and May 2018. The mobile customer base grew to 118 crore in January from 117 crore in December.
The wireline connection in the country slid to 2.17 crore in January from 2.18 crore in December. Reliance Jio dominated growth by adding over 93 lakh new mobile customers.
State-run telecom firm BSNL followed Jio by adding 9.82 lakh mobile subscribers. Bharti Airtel returned to growth track, after losing mobile customer in December, by adding over 1 lakh new customers.
The net increase of telecom subscriber in January was 59 lakh, compared to over 1 crore subscribers added by the three players. However, Vodafone Idea and Tata Teleservices jointly lost close to 44 lakh mobile customers.
The country’s biggest telecom operator Vodafone Idea lost 35.8 lakh mobile customers, Tata Teleservices 8.4 lakh and state-run MTNL 4,927 mobile customers. The wireline connections declined mainly because of BSNL losing 90 thousand connections.
Private operators Bharti Airtel and Vodafone added 29,930 and 6,386 connections. Broadband connections in the country grew 4.15 per cent to 54 crore in January from 51.8 crore in December.
The mobile devices-based broadband connections accounted for over 96 per cent of total base with over 52.1 crore subscribers while wireline connections reached 1.82 crore.
Top-five service providers constituted 98.63 per cent market share of the total broadband subscribers at the end of January.
Reliance Jio led the market with 28.94 crore broadband subscribers. It was followed by Bharti Airtel with 11 crore connections, Vodafone Idea 10.98 crore, BSNL 2 crore and and Tata Teleservices Group 22.6 lakh connections.
BSNL maintained lead in the wireline broadband segment with 91.7 lakh connection. It was followed by Airtel with 23 lakh connections, Atria Convergence 14 lakh, Hathway Cable & Datacom 7.9 connection and MTNL 7.7 lakh connections.

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