Money & Banking
Deposited demonetised notes still being counted: RBI Governor
Eight months after demonetisation, RBI Governor Urjit Patel still refused to give the amount of junked notes deposited with banks, saying they are still being counted.
 
He also parried a question on Wednesday at a meeting of the Parliamentary Standing Committee on Finance on the names of 12 industrialists whose outstanding loans amounted to 25 per cent of the Non-Performing Assets in the banking system.
 
Patel was deposing before the committee, which is expected give a report on demonetisation during the Monsoon Session of Parliament beginning next week. 
 
He was specifically asked to give details of the value of the Rs 500 and Rs 1,000 notes which were allowed to be exchanged till December 30. 
 
He is learnt to have told the panel that the process of counting the junked notes was still on and the central bank has to verify fake notes for which specialised machines are being procured. While some machines have been procured, tenders have been floated to procure more, Patel was quoted by sources as having told the committee. 
 
Another reason given for the delay was the window given to the central bank to accept the junked notes collected by District Central Cooperative Banks (DCCBs) as well as pending issues with Nepal where Indian currency is used widely, sources said. 
 
Patel is learnt to have told the panel that the process was being expedited with help of machines and staff putting in extra hours. 
 
Patel said the total money in circulation in the country now was Rs 15.4 lakh crore against Rs 17.7 lakh crore at the time of demonetisation in November last year, according to sources.
 
The government last month allowed the District Central Cooperative Banks (DCCBs) to deposit the demonetised notes, collected during the five-day period after demonetisation was announced on November 8, 2016, with the Reserve Bank of India in 30 days.
 
Sources said a member told the RBI Governor that since the junked notes have so far not been been counted, how will the central bank know how much of these were fake or genuine. 
 
Samajwadi Party member Naresh Agrawal staged a brief walk out from the meeting after not being satisfied with the response to his questions. 
 
He is understood to have demanded the names of 12 industrialists whose outstanding loans amounted to 25 per cent of the Non-Performing Assets in the banking system. 
 
The meeting of the panel, chaired by Congress leader M. Veerappa Moily, lasted for about three hours. Former Prime Minister Manmohan Singh was among those present. 
 
Members also asked questions about the vigil being maintained over the use of bitcoins. 
 
Issues relating to GDP growth and progress towards digital economy also figured in the meeting. 
 
Members are learnt to have asked about transaction cost being levied on digital payments and inadequate presence of banks in rural areas. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Mihir

4 months ago

Mr. Patel, if you don't count by end of this month, you will have to enroll in counting class for junior kg kids.

Deepak Narain

4 months ago

They invent excuses for non-performance.

sohan modak

4 months ago

Oh, i think that smart customers have managed to exchange fake currancy for good new one thereby becoming real gainers in the deal. Besides, most probably, there was prior knowledge to interested parties which ensured a profitable exchange. won't be surprised if the so called old currancy is greater in amounts by several factors over the expected. Poor Mr. urjit Patel, if he can't cound these notes, who else can? What a show by the RBI. or, is it what he is supposeed to keep mum about?

GLN Prasad

4 months ago

Strange. When RBI receives such notes, they have such data, at the most there may be cross checks or matching in case of discrepancies, one can not understand such lame excuse of still counting during the era of digitalization. If it is oursourced, any agency should have collected total amounts lying of such notes bank wise through mail and should have completed the task in less than a day.

SBI not rushing towards bankruptcy code due to lack of ecosystem
The State Bank of India has not been "rushing towards" the new Insolvency and Bankruptcy Code (IBC) to resolve cases of defaults as the entire ecosystem required for the new law has not so far been fully created, its chairperson Arundhati Bhattachrya said on Tuesday.
 
"The banking sector has in one voice asked for the Bankruptcy Code. As the country matures and evolves, it is necessary to have a judicial framework for orderly resolutions of assets. We cannot have makeshift structures that we were having earlier. So, we have been asking for a bankruptcy law and that has come.
 
"Now, the reason why we have not been rushing towards this is because with the law also you need to set up the ecosystem," she said.
 
Bhattacharya noted that first of all, the bench of National Company Law Tribunal (NCLT) has to be created, people have to be deputed on the bench and next, one needs to create an information utility, which has not come yet.
 
She also cited the requirement of certified and registered resolution professionals to go with the resolution process. 
 
"So, it has taken a little time for the law to be passed, rules to be notified and all the infrastructure to be created. Now, the ecosystem has begun getting created...it has been created, but not fully. And that is why we have seen that slowly the cases have been going on," she said. 
 
The SBI chief said all the 12 stressed accounts, which were identified by the Reserve Bank of India, were receiving its attention and it hoped to see fast resolution for the settlement of dues through the IBC.
 
"All of the stressed accounts are receiving our attention. As and when it will come up in front of the NCLT, we will be making our representations. And we hope that these resolutions will happen as fast as it currently laid out in the law," she said.
 
Last month, the apex bank had identified 12 large accounts with exposure of more than Rs 5,000 crore and more than 60 per cent of which is recognised as NPAs. Banks have to refer to the IBC for these accounts.
 
Bhattacharya said the amount of provisioning that needs to be made on the 12 stressed accounts would "slightly" be above of what the bank would have made in any case.
 
"It will obviously hit the bottomline (of SBI), but not to that extent," she said.
 
She was in the city for the inauguration of bank's wealth management services and Bhattacharya said the bank is among the first PSU lender to introduce such services. It is targeting to have SBI Exclusif outlets in 13 centres in the country in the current financial year.
 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Credit growth in the banking system is low: SBI chief
India's largest lender, State Bank of India's Chairperson Arundhati Bhattacharya on Tuesday said the credit growth in India's banking system is low.
 
Elaborating on the current economic growth rate and inflation rate, Bhattacharya said: "Credit growth especially in the banking system is low. Nine is the percentage at which the credit should grow. The credit is, however, growing at close to five (per cent).
 
Today, much of the credit at least for the companies that are doing well comes from the market...if that number is added, the credit growth comes around 7.5 per cent. Even it (the credit growth) is lower than a number it should be." 
 
According to her, the lender will bring a number of retail products in the digital space and data analytics will play a key role in digital banking.
 
"We will bring a number of retail products in digital space and in the corporate front, we will also provide... we have lot of plans. Some of them we will begin delivering within in a very short period of time. They are currently undergoing core user group testing. They will be out very shortly," she said.
 
"On the corporate side, we will be using not only platforms to bring people together, but also analytics to find out who is producing and who is needing what," Bhattacharya said while emphasising on how the lender is going to leverage the digital platform.
 
Addressing participants at Banking Conclave organised by Ficci, she said the lender will use data analytics in retail banking too.
 
On the SBI's credit-deposit ratio at around 50.5 per cent in West Bengal, she said: "We need to create right situations for credit absorption. If there is no credit absorption capacity, pouring lot of credit will cause NPAs."
 
After inaugurating the bank's wealth management services in the city, Bhattacharya, later in the day, said credit absorption capacity in the north and eastern states are relatively low. 
 
She said that what needs to be done in West Bengal is to have a look at value chain financing.
 
She, however, said consumption led retail credit growth has been progressing and on the other hand, investment demand has not so far been picked up. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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