supply answers on note ban in writing, an unhappy p.c.tells Urjit Patel

The governor didn't supply specific solutions on who initiated the notice ban

unsatisfied with the responses of Reserve bank of India (RBI) Governor Urjit Patel to particular queries on demonetisation, the public money owed Committee (PAC) of Parliament on Friday asked him to furnish written replies to the concerns expressed via the participants inside two weeks and seem ahead of the panel again.

Patel, together with Deputy Governor R Gandhi and other senior functionaries, appeared ahead of PAC for oral proof on “assessment of financial coverage”. The governor didn't supply explicit solutions on who initiated the notice ban, how a lot cash had come again into the banks and when the money provide scenario would normalise, sources stated.

all the way through the four-hour-long meeting, Opposition contributors asked Patel questions on the dent within the economy, job losses and the lack of over 100 lives allegedly because of demonetisation. “He (Patel) said there is also issues however we will overcome them,” said a member on the panel.

The RBI governor mentioned the important financial institution was once in touch with the carrier providers of some online fee structures to cut back transaction price. When a member mentioned that the deposits in cooperative banks shot up round six times within days of the notice ban, Patel, mentioned the RBI was having a look into the matter.

To have additional readability on the affect of the note ban, PAC has additionally requested Finance Secretary Ashok Lavasa, financial Affairs Secretary Shaktikanta Das, earnings Secretary Hasmukh Adhia and financial services and products Secretary Anjuly Chib Duggal to seem sooner than it on February 20.

additionally, more than seventy two days after demonetisation, RBI, in a written resolution to queries raised past, mentioned it nonetheless did not comprehend the exact number of junked foreign money notes that have been in circulation and it's nonetheless reconciling the choice of notes that were deposited again.

The important bank said: “the precise choice of distinctive bank notes withdrawn from circulation is being worked out.”

past this week, Patel had informed the Parliamentary Standing Committee on Finance that new currency notes to the tune of Rs 9.2 lakh crore had been presented into the system after the elimination of the previous notes.

When a member wished amenities for NRIs to deposit their old notes at embassies, citing a percent with Nepal, Patel said he would appear into it.

PAC used to be knowledgeable by using RBI that the subject associated to demonetisation was once underneath discussion between the government and RBI for “some months”, following which the concept was placed before the crucial board of RBI on November eight for consideration. The board beneficial the notion to the federal government.

The Board assembly was once attended by using Governor Patel, two Deputy Governors (Gandhi and S S Mundra), and five directors — Nachiket Mor, Bharat N Doshi, Sudhir Mankad, Shaktikanta Das and Anjuly Chib Duggal.

Sources mentioned Director N S Vishwanathan (deputy governor) did not attend the meeting as he stayed back in Mumbai for “strategic reasons” to transient the bankers first hand instantly after the choice on demonetisation used to be taken.

every other director, Natarajan Chandrasekaran, was once out of the country on the time of the assembly.

Defending the cash withdrawal limits imposed after the notice ban on November eight, the RBI governor stated, “The ceiling on withdrawal was decided on the foundation of availability, past utilisation pattern and taking into account the wishes of the popular people so that hardships are minimum.” the government has increased the money withdrawal restrict from ATMs to Rs 10,000 per day but has no longer changed the cap of Rs 24,000 from banks per week. In between, it has

changed the bounds a number of times, as well as relaxations given on funds via scrapped currency notes.

In his written reply, Patel brought up that, in the past, individuals were withdrawing Rs 12,000 or Rs thirteen,000 per week, and Rs 50,000 per month, on a typical. “He (Patel) stated the advantages of the notice ban will come within the medium and lengthy terms,” mentioned every other PAC member. As Opposition individuals lobbed queries at Patel, the Bharatiya Janata birthday party (BJP) participants praised him for demonetisation and maintaining secrecy within the topic. This provoked an Opposition member to jokingly observation that the home should move a vote of thanks for the RBI chief.

As soon as the assembly started, k V Thomas, chairman of PAC and a Congress MP, made a commentary on demonetisation, prompting protests from BJP members, including Bhupender Yadav, Kirit Somaiya and Nishikant Dubey.

Citing the amendment within the RBI Act in 2016, they said any question put to Patel must be in context of the central bank’s financial coverage and now not outside it.

After an extended debate, the panel agreed that questions about demonetisation might be asked but simplest in the context of monetary coverage. it is learnt that Patel mentioned the cash drift position had mostly superior in the united states. To questions about the affect of demonetisation on growth, Patel mentioned there may well be affect in the quick run, however in the mid and long terms the transfer was once a good idea for the financial system.

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RBI replaces 60% of banned foreign money: Rs 9.2 lakh cr remonetised until date

Parliamentary panel individuals say governor used to be silent on the quantity that has come back

The Reserve financial institution of India (RBI) has infused around 60 per cent of the entire banned currency notes after demonetisation.

The RBI Governor Urjit Patel informed a parliamentary standing committee on finance on Wednesday that the primary financial institution had infused new forex notes worth round Rs 9.2 lakh crore into the device. forex notes estimated around Rs 15.four lakh crore were withdrawn when the Centre introduced demonetisation on November eight, 2016. Most members within the finance committee, including former prime Minister Manmohan Singh and panel chairman M Veerappa Moily, spoke in favour of defending the autonomy of the RBI as an institution however stated that accountability from its governor should be sought because the be aware ban had impacted a big of choice of folks.

although the members found Patel’s clarification lucid, they had been miffed that he did not answer queries like how much cash had been deposited in banks after demonetisation or through when the cash provide scenario would ease throughout the united states of america. “Patel got here throughout as a professional in his temporary… but we had quite a lot of concerns to raise,” said an Opposition member.

The finance committee assembly was once significant as key finance ministry officials, together with economic Affairs Secretary Shaktikanta Das, earnings Secretary Hasmukh Adhia briefed the panel.

Author : Wealth Research

Parliament panel to grill RBI governor Urjit Patel over notice ban as of late

Standing committee on finance to additionally focus on RBI autonomy and citizen's rights

Reserve bank of India (RBI) Governor Urjit Patel (pictured) will face questions on demonetisation and its aftermath when he appears earlier than the Parliament’s standing committee on finance on Wednesday.

Opposition birthday celebration contributors on the panel, mentioned sources, were not satisfied with the paperwork RBI and the finance ministry had given the committee, in beef up of high Minister Narendra Modi’s November 8 announcement banning Rs 500 and Rs 1,000 currency notes.

a big concern of those participants used to be whether RBI’s autonomy used to be compromised by using the observe ban decision. every other issue could be if the decision violated citizens’ rights over their felony cash in banks, assured by using RBI, with withdrawal limits. additional, the individuals would like to know if the cashless economy agenda being pushed by way of the Centre was once feasible as a couple of major economies equivalent to the usa, Japan, the uk and Singapore have still no longer long past completely cashless.

contributors would also ask questions on whether the banking gadget was geared up to enforce the word ban. the fact that at the least one hundred individuals reportedly misplaced their lives in the aftermath of the note ban and if their family got compensation would also be thrown at the RBI chief, sources mentioned. “The notice ban has messed up the economy. all the issues of the public could be raised on the meeting,” a lawmaker informed this newspaper, on condition of anonymity.

the federal government had steered the relevant bank on November 7, 2016, to believe the observe ban and RBI’s board advisable the identical on November 8, hours prior to Modi announced the note ban. “We want to comprehend how many new foreign money notes have been printed and what is the cash supply scenario,” said some other member. “We would like to understand the impact of note ban on industrial manufacturing, agriculture and resultant job losses.”

consistent with the documents submitted earlier than the panel via RBI and the ministry, the Centre used to be alarmed on the spurt in the circulation of counterfeit Rs 500 and Rs 1,000 notes and needed to take immediate action. the data provided to the panel confirmed a rise of seventy six.4 per cent in the provide of pretend Rs 500 notes and 109 per cent in faux Rs 1,000 notes over the previous five years. Fearing that the infusion of fake currency via a neighbouring us of a contributed to terror funding and black money, the government opted for the be aware ban.

Estimating the fake forex in India at Rs 400 crore, the government file stated authorities had seized fake currencies value Rs 27.79 crore until September 2016. It was Rs 43.8 crore in 2015 and Rs 41 crore in 2014.

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Now, you can withdraw up to Rs 10,000 in a day from an ATM

The Reserve Bank of India (RBI) on Monday relaxed the per day cash withdrawal limit from automated teller machines (ATM) to Rs 10,000 per card, from Rs 4,500 currently. The weekly limit, however, remains unchanged at Rs 24,000.

Current account holders can now withdraw up to Rs 1 lakh per week. Earlier, they were allowed to withdraw only up to Rs 50,000. This facility has been extended to overdraft and cash credit accounts as well.  

RBI had imposed these limits in November after the government banned Rs 500 and Rs 1,000 notes. The withdrawal limits are unlikely to be removed completely till RBI supplied the economy with sufficient amount of new notes, analysts said.

The daily withdrawal limit has been changed a number of times earlier. On November 8 — the day Prime Minister Narendra Modi announced the note ban — the central bank restricted daily withdrawal to Rs 2,000. It was increased to Rs 4,500 a few days later. This was quickly rolled back to Rs 2,000; then increased to Rs 2,500 per day. From December 30, the daily limit was fixed at Rs 4,500.

However, in all these changes, the weekly withdrawal limit was not changed — unless one was withdrawing money for special purposes such as marriage. A bank customer had to issue a cheque to withdraw higher amounts of cash from bank counters.

In a number of banks, the daily withdrawal limit was Rs 10,000 a day even before the note ban started. ATMs, too, were programmed to dispense no more than Rs 10,000. So, for some, the cash regulations had returned to normal, but for the weekly withdrawal limit.

Cash availability, too, had improved, with more new Rs 500 and Rs 2,000 notes coming into the system.

According to a Bank of India executive, the supply of currency notes (of various denominations) from December 2016 had increased substantially, leading to improved availability at branches and ATMs. While dispensing currency notes, the bank’s own customers were the priority, he added.   

Compared to the last month, more currency notes were being sent to semi-urban and rural networks, said the banker.

The expanded withdrawal limit would help banks as well as customers to bring down the transaction cost paid to switch providers. The charges associated with ATM usages were waived off by RBI till December 30.

Technically, from January 1, banks were free to charge their customers if they use ATMs for more than five times a month. But given the paucity of cash, some banks had extended the ATM fee waiver after January, deciding to absorb the cost themselves.  Now the charges can be reintroduced.

The increase in current account withdrawal would greatly aid small businesses as well as companies that have to pay wages to employees in cash. Many small units had to be closed down as owners could not pay in cash. Now, those units can hope to be back in business, as usual, bankers added.