News Analysis India

Tag: Shaktikanta Das

  • RBI To Set Up Digital Payments Intelligence Platform To Combat Online Fraud |

    New Delhi: In a bid to bolster the safety and security of digital payments and enhance regulatory frameworks, the Reserve Bank of India (RBI) unveiled a series of proposals aimed at fostering innovation, inclusivity, and efficiency in the financial ecosystem.

    These initiatives, announced by RBI Governor Shaktikanta Das, signify the central bank’s commitment to fortifying India’s digital infrastructure and promoting a conducive environment for financial transactions. One of the key announcements made by Governor Das pertained to the establishment of a Digital Payments Intelligence Platform. 

    This platform, leveraging advanced technologies, aims to mitigate payment fraud risks and enhance the safety of digital transactions. According to the annual report released by the Reserve Bank of India (RBI) on May 30, there was a significant surge in the number of financial frauds reported by banks, increasing by 166 per cent year-on-year in the financial year 2023-24 to reach 36,075 cases.
    This figure starkly contrasts with the 13,564 cases reported in the previous fiscal year, FY23.

    Despite the notable rise in the number of fraud cases, there was a substantial decrease in the total amount involved in these incidents. The amount of money associated with total bank frauds plummeted by 46.7 per cent year-on-year in the financial year 2023-24, totaling Rs 13,930 crore. In comparison, the amount recorded in FY23 stood at Rs 26,127 crore.

    RBI has proposed a revision of the limit of bulk deposits for Scheduled Commercial Banks (SCBs) and Small Finance Banks (SFBs). This move, aimed at enhancing flexibility and aligning with evolving market dynamics, underscores the RBI’s commitment to fostering a conducive environment for the banking sector.

    Currently, banks have the discretion to offer differential rates of interest on bulk deposits based on their requirements and Asset-Liability Management (ALM) projections. The existing bulk deposit limit for SCBs (excluding Regional Rural Banks) and SFBs, set at ‘Single Rupee term deposits of Rs 2 crore and above,’ was established in 2019.

    However, following a comprehensive review, the RBI has proposed to revise this definition to ‘Single Rupee term deposits of Rs 3 crore and above’ for SCBs and SFBs. In addition to the proposed revision for SCBs and SFBs, the RBI has also suggested defining the bulk deposit limit for Local Area Banks (LABs) as ‘Single Rupee term deposits of Rs 1 crore and above,’ mirroring the criteria applicable to Regional Rural Banks (RRBs).

    RBI has also unveiled plans to rationalize export and import regulations under the Foreign Exchange Management Act (FEMA), 1999. This initiative, driven by the imperative of progressive liberalization and operational flexibility, underscores the RBI’s commitment to fostering a conducive environment for international trade and investment.

    By eliminating redundancies, enhancing clarity, and reducing procedural complexities, the RBI aims to promote ease of doing business for all stakeholders involved in cross-border trade.
    The RBI aims to streamline and simplify operational procedures related to export and import transactions, thereby reducing administrative burdens and enhancing efficiency for businesses and authorized dealer banks.

    By aligning regulations with international best practices and market realities, the RBI seeks to create a business-friendly environment conducive to fostering trade and investment growth. Simplified regulations will facilitate smoother trade transactions, encouraging businesses to explore new markets and expand their global footprint.

    While promoting ease of doing business, the RBI remains committed to ensuring compliance with regulatory requirements and safeguarding the integrity of the financial system. The proposed rationalization will uphold the principles of transparency, accountability, and risk management in cross-border transactions.

    As part of the process, the RBI plans to publish draft regulations and directions on its official website by the end of June 2024. In a bid to enhance the convenience and efficiency of digital payments, RBI has unveiled plans to expand the e-mandate framework to include recurring payments for Fastag, National Common Mobility Card (NCMC), and similar services.

    This initiative, aimed at modernizing payment systems and promoting financial inclusion, underscores the RBI’s commitment to fostering innovation and leveraging technology to meet evolving consumer needs. The current UPI Lite service permits customers to load their UPI Lite wallets with up to Rs 2000/- and conduct transactions of up to Rs 500 from the wallet.

    To enhance the seamless usage of UPI Lite for customers, and in response to feedback from various stakeholders, it is suggested to integrate UPI Lite into the e-mandate framework. This integration would introduce an auto-replenishment feature for UPI Lite wallets, automatically refilling the wallet balance when it falls below a predetermined threshold set by the customer.

    Since the funds remain under the customer’s control (transferring from their account to the wallet), it is proposed to eliminate the need for additional authentication or pre-debit notifications. Relevant guidelines pertaining to this proposal will be issued shortly.

    RBI has embarked on a mission to foster innovation and transformation in the financial sector with the launch of its third edition of the global hackathon, “HARBINGER 2024 – Innovation for Transformation.”

    It would feature two primary themes: ‘Zero Financial Frauds’ and ‘Being Divyang Friendly.’ Solutions aimed at bolstering the safety and security of digital transactions, with a specific emphasis on identifying, preventing, and combating financial frauds, will be solicited. Additionally, there will be a focus on fostering inclusivity for individuals with physical disabilities. Further details regarding the hackathon will be unveiled shortly.

  • GDP to expand at 9.5 per cent as growth impulses strong: RBI Governor

    The fiscal and taxation reforms have played key role in driving growth and reviving confidence, Das said.

  • RBI remains laser-focused to bring back inflation to 4 per cent: Governor Das

    He opined that continued monetary support is necessary as the economic recovery process even now is delicately poised and growth is yet to take firmer roots.

  • RBI will deploy all resources for citizens, businesses hit by 2nd COVID-19 wave: Shaktikanta Das

    Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said that the central bank will continue to monitor the emerging COVID-19 situation and will deploy all resources and instruments at its command for citizens, business entities, and institutions beleaguered by the second wave.

    “RBI will closely monitor the impact of the second wave of COVID-19 on macroeconomic and financial conditions. CPI inflation is dubbed to 5.5 per cent in March ’21 from 5.0 per cent in February, on the back of a pick-up in food and fuel inflation,” Das said while addressing a press conference.

    India has been witnessing a massive surge in COVID-19 cases in its second wave, recording over 3 lakh new cases and over 3000 related deaths on a daily basis, thus impacting the country’s health care infrastructure as well as the economy.

    “Localised and targeted containment measures are enabling businesses and households to adapt; hence, effect on aggregate demand is expected to be moderate in comparison to last year,” he added. The RBI Governor also saluted the contribution of health care workers, law enforcement and other frontline workers who have been battling the COVID-19 pandemic selflessly.

    “From having flattened infections, India today is fighting a ferocious rise in infections and mortalities. India has mounted a valiant defence to ramp up vaccines and medical support; shoring up livelihoods and restoring normalcy in access to workplaces, education and incomes becomes an imperative,” said Das. “Devastating speed of virus has to be matched by swift, wide-ranging, sequenced and well-timed actions which reach out to various sections, including the most vulnerable,” he added.

    “Global economy is showing signs of recovery; activity remains uneven across countries and sectors, clouded by downside risks. IMF has in April ’21 revised global growth projections for 2021 to 6 per cent from 5.5 per cent, on the assumption of availability of vaccines by summer of 2021,” he added.

  • RBI asks Centre, state governments to reduce indirect taxes on petrol, diesel

    By Express News Service
    NEW DELHI: WITH fuel prices touching historic highs, the Reserve Bank of India has urged both the Centre and state governments to reduce indirect taxes on petrol and diesel. Taxes levied by the Centre and local governments make up for 60% of the retail cost of petrol while it is 54% in the case of diesel. 

    “Calibrated unwinding” of taxes is needed to reduce price pressures in the economy, RBI Governor Shaktikanta Das said in the Monetary Policy Committee meeting that concluded on February 6, its minutes released on Monday showed.

    “CPI inflation, excluding food and fuel remained elevated at 5.5% in December, due to inflationary impact of rising crude oil prices and high indirect tax rates on petrol and diesel, and pick-up in inflation of key goods and services, particularly in transport and health categories. Proactive supply side measures, particularly in enabling a calibrated unwinding of high indirect taxes on petrol and diesel are critical to contain further build-up of cost-pressures in the economy,” said Das. 

    In January, Goldman Sachs had estimated Brent crude oil price to reach $65 a barrel by the middle of 2021. As international crude prices increase, petrol-diesel prices will continue to rise if tax rates don’t change. Fuel prices directly affect household budgets as prices of essential items invariably go up in tandem with petrol / diesel prices. 

    Government’s cash cow

    The Centre collected Rs 2.36 lakh crore in excise duties on petrol and diesel in the first nine months of FY21. For the full year, it expects to collect Rs 3.61 lakh crore — Rs 94,000 crore more than the Budget Estimate of Rs 2.67 lakh crore.

  • Maharashtra Navnirman Sena urges RBI to set up panel to resolve transporters’ woes

    By PTI
    MUMBAI: Maharashtra Navnirman Sena (MNS) chief Raj Thackeray on Friday urged the Reserve Bank of India to set up a high-power committee to look into the woes of transporters reeling under financial burdens.

    In a letter to RBI governor Shaktikanta Das, Thackeray claimed that several banks were not following the Centre’s guidelines of observing leniency while recovering dues. “The RBI and Centre had issued guidelines to banks asking them to observe leniency in the recovery process in light of the COVID-19 pandemic. However, banks have not been honouring these guidelines,” the MNS chief stated in the letter.

    The RBI should set up a high-power committee to address the woes of the transport sector, he said, adding that the panel should also direct action against financiers who have violated the government’s directives. Thackeray further claimed that some financiers had issued notices for recovery and were charging Rs 2,000 per notice as fine.