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We have updated our terms and conditions and privacy policy Click "Continue" to accept and continue with ET BFSI ACCEPT THE UPDATED PRIVACY & COOKIE POLICY Dear user, ET BFSI privacy and cookie policy has been updated to align with the new data regulations in European Union. Please review and accept these changes below to continue using the website. You can see our privacy policy & our cookie policy. We use cookies to ensure the best experience for you on our website. If you choose to ignore this message, we'll assume that you are happy to receive all cookies on ET BFSI. * Analytics * Necessary * Newsletter NameProviderExpiryTypePurpose Google AnalyticsGoogle1 YearHTTPSTo track visitors to the site, their origin & behaviour.iBeat AnalyticsIbeat1 YearHTTPSTo track article's statisticsGrowthRx AnalyticsGrowthRx1 YearHTTPSTo track visitors to the site and their behaviour NameProviderExpiryTypePurpose optoutTimes Internet1 YearHTTPSStores the user's cookie consent state for the current domainPHPSESSIDTimes Internet1 dayHTTPSStores user's preferencesaccessCodeTimes Internet2.5 HoursHTTPSTo serve content relevant to a regionpfuuidTimes Internet1 YearHTTPSUniquely identify each userOSTIDTimes Internet1 YearHTTPSOauth secure tokenOSSOIDTimes Internet1 YearHTTPSOauth user identifierOSTPID Times Internet1 YearHTTPSused to sync accross portalsfpidTimes Internet1 YearHTTPSBrowser Fingerprinting to uniquely identify client browsers NamePurpose Daily NewsletterReceive daily list of important newsPromo MailersReceive information about events, industry, etc. I've read & accepted the terms and conditions NEWS SITES * Auto News * Retail News * Health News * Telecom News * Energy News * CIO News * Real Estate News * Brand Equity * CFO News * IT Security News * Government News * Hospitality News * HR News * Legal News * ET TravelWorld News * Infra News * B2B News * CIOSEA News * HRSEA News * HRME News Upcoming Event: CFO Meet & discussion on Revised Companies Act Sign in/Sign up * Follow us: * * * * * * * ETBFSI Exclusive * BANKING * INSURANCE * InsurTech * NBFC * FINTECH * Payments * Digital Lending * RegTech * Open API * BFSI Videos * Editor's View * Brand Solutions * REIMAGINE NEXT * SIDBI-ET MSMES/STARTUPS Roudtable Discussion * REIMAGINE NEXT - THE FUTURE OF LEARNING * ETBFSI.COM CONVERGE BFSI: The world of Hyper-personalization * FUTURE READY SECURITY FOR DIGITAL-FIRST BFSI * LEARNFEST * ETBFSI EXCELLENCE AWARDS 2021 AWARDS FOR EXCELLENCE IN INNOVATION * THE DIGITAL NEXT: SERIES 2.1 Live Virtual Summit * 3RD EDITION OF ETBFSI CXO CONCLAVE Unlocking the BFSI Potential * JOIN THE ECONOMIC TIMES FINANCIAL INCLUSION SUMMIT 2021 * 2ND EDITION OF ETBFSI VIRTUAL SUMMIT 2021 * ET BANKING LEADERSHIP SERIES PRESENTED BY MANIPAL ACADEMY * NATIONAL COOPERATIVE SUMMIT * FINANCIAL INCLUSION & PAYMENT SUMMIT * Millennial Finance * FinTech Diary * BFSI Tech Tales * Green Finance * IBC * ETBFSI Explains * BFSI Movement * More * Blogs * Innovation Masters * POLICY * FINANCIAL SERVICES x * BFSI News * Latest BFSI News * Policy RBI'S 'OPEN MOUTH OPERATION' KEEP YIELDS ON LEASH The verbal assurance that liquidity will be in abundance, which market pundits label 'Open Mouth Operations', a phrase borrowed from the central bank's open market operations to influence market direction, has led to Indian yields rising just about 8 basis points since the Russia-Ukraine war began on February 22. * Saikat Das * ET Bureau * March 24, 2022, 08:17 IST * * * * * * * * Mumbai: Indian bond yields have stayed under the lid as RBI governor Shaktikanta Das talking down expectations appears to be working, despite a surge in borrowing costs for governments across the world with central banks pedalling back ultra-loose monetary policies. The verbal assurance that liquidity will be in abundance, which market pundits label 'Open Mouth Operations', a phrase borrowed from the central bank's open market operations to influence market direction, has led to Indian yields rising just about 8 basis points since the Russia-Ukraine war began on February 22, compared with 42 bps in the US - reflecting the hope that RBI would be able to keep rates low. "Market is relying on RBI's dovish communication, which in turn is prompting people to believe that not only any rate action is still a distant reality, but also that RBI will keep the borrowing cost at a benign level amid growth concerns," said Soumyajit Niyogi, associate director at India Ratings. Advertisement Online Degree Program MASTER OF BUSINESS ADMINISTRATION (MBA) BY IU UNIVERSITY 30 March 2022 @ 04:30 AM 12 months program for working professionals Register Now Double MBA Degree from IU Germany and London South Bank University (LSBU) UK "If the gap between the expectations and the reality stays for long, that could turn out to be another source of volatility and eventually risk to stability in the financial market going ahead," he said. During the war-infested period, shorter duration sovereign securities - Treasury Bills yielded about 9-11 basis points higher, show latest available data from Financial Benchmarks India. In the same period, similar maturity US Treasury Bills yielded 17-52 bps higher. "RBI 'talk' has assuaged the market backed by the fact that there is no fresh borrowing from the government," said Madan Sabnavis, chief economist at Bank of Baroda. "This has also played a role. Also, the RBI has held on to the view that inflation is only transitory that has added to the comfort." "The constant reiteration by RBI in a different forum on these issues of growth and inflation has helped to keep bond yields in a corridor," Sabnavis said. Rating agency Fitch on Tuesday slashed India's growth forecast for the next fiscal to 8.5% from 10.3%, citing soaring energy prices and rising inflation on account of the Russia-Ukraine war. Consumer prices rose at 6.07% in February this year breaching the central bank's comfort range of 4-6%. This was the highest in eight months. "Going forward we will ensure that there is abundant liquidity in the market for the credit system to be active, for the credit system to function normally," Shaktikanta Das said two days ago at a conference. The RBI has maintained an 'accommodative' stance. The developments which have been taking place on the war front which has manifested in high inflation has seen bond yields increase across the world. Back home it has not been the same and yields have tended to be by and large stable. "The reason is that the MPC/RBI has reiterated that growth is a major concern and that there will be an accommodative stance for the next year," Sabnavis said. However, market dealers are apprehensive of how long this stance will be maintained. With consumer price inflation crossing RBI's upper tolerance limit a call has to be taken. Government borrowing for next year will also begin from April onwards, a key event the local debt market is waiting for. Dealers are not seen taking any new bets. Despite global headwinds, foreign portfolio investors have not dumped local debt securities compared to equities. They sold a net of about $800 million in bonds against a net of $14.5 billion in equities. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy RBI | Bond yields rbi us treasury Shaktikanta Das mpc/rbi india ratings Read on App Read on App PEOPLE WHO READ THIS ALSO READ * Saving banks from Black Swan: RBI stresses on capital buffers instead of recapitalisation * Rupee-Rouble payment system may be pegged to third international currency * Wilful default cases down by over 50% in last eight years: Govt data * Bank of Baroda revises FD interest rates: Check latest rates SUBSCRIBE TO OUR NEWSLETTER 50000+ Industry Leaders read it everyday I have read Privacy Policy and Terms & Conditions and agree to receive newsletters and other communications on this email ID. POLICY * 3 hrs ago GOVT PUSHES CHANGES IN FINANCE BILL TO CLEAR AIR ON TAXATION FOR DIGITAL ASSETS * 6 hrs ago INDUSTRY BODIES MAKE REPRESENTATION TO SEBI; PLEA TO REVIEW RELATED PARTY NORMS * 9 hrs ago RBI'S 'OPEN MOUTH OPERATION' KEEP YIELDS ON LEASH * 23 hrs ago CBIC ISSUES SCRUTINY NORMS RELATED TO GST View More EDITOR'S PICK * 3 hrs ago AEGON LIFE APPOINTS SRINIDHI SHAMA RAO AS CHIEF STRATEGY OFFICER * 4 hrs ago LENDENCLUB APPOINTS ATAL AGARWAL AS HEAD STRATEGY AND NEW INITIATIVES * 4 hrs ago MICROFINANCE DISBURSEMENTS DROP 11.8% IN Q3 ON OMICRON HIT * 5 hrs ago WHY NPS IS BETTER THAN PAYG SCHEME FOR INDIA'S ECONOMY, ACCORDING TO AN SBI ECONOMIST * 6 hrs ago SAVING BANKS FROM BLACK SWAN: RBI STRESSES ON CAPITAL BUFFERS INSTEAD OF RECAPITALISATION BFSI VIDEOS * IMPOSSIBLE TO BUILD PROFITABLE BUSINESS VIA GOOGLE, FACEBOOK ADS: POLICYBAZAAR CEO Sarbvir Singh, chief executive officer of PolicyBazaar, in this week's FinTech Diary, said that it is impossible for companies to build a profitable business by acquiring customers through Google and Facebook or digital marketing, and it "can only be a topping on top of your main business," he said. Singh reasoned that his company's model is able to manage its customer acquisition cost is because 80% of their transaction cost happens through people who come directly to the website to buy the product. This, Singh said, is because the company put out many advertisements on television done over the last 10-12 years. In FY21, the annual number of visits on PolicyBazaar website was 126.5 million, Singh said, adding that the company's health and motor insurance products are helping it build a large renewal book. PB Fintech, the parent company of PolicyBazaar, is the first InsurTech to be listed recently. Tune in for the full interview.. * 1 day ago OPEN, SAFE AND ACCOUNTABLE INTERNET A POLICY CHALLENGE: MOS CHANDRASEKHAR * 7 days ago THREE FACTORS TO PUSH FOR CHANGE IN BANKING SECTOR: BOB CDO HANDA * 8 days ago BNPL CAN HELP INDIA REACH $5-TRILLION MARK, SAY LEADERS View More GOVT PUSHES CHANGES IN FINANCE BILL TO CLEAR AIR ON TAXATION FOR DIGITAL ASSETS The finance bill is scheduled to be taken up in the lower house for discussion and consideration on Thursday. It would be likely taken up for passage on Friday. * Deepshikha Sikarwar * ET Bureau Click Here to Read This Story * * * * * * * * The government has moved around 39 changes to the finance bill including some aimed at further tightening the proposed taxation regime for crypto assets. The finance bill is scheduled to be taken up in the lower house for discussion and consideration on Thursday. It would be likely taken up for passage on Friday. Union finance minister Nirmala Sitharaman will move an amendment to make it clear that no tax deduction or set off would be available in lieu of mining costs of cryptocurrencies and other virtual digital assets (VDAs) or losses from their transfer. The amendment is in line with the clarification given by minister of state for finance Pankaj Chaudhary on Monday in response to a question in the Lok Sabha. The government will also move an amendment to say all transfers of virtual digital assets will be covered under the proposed 30% tax irrespective of whether they were a capital asset or not. It will also move an amendment to explicitly state that only the proposed rate of tax deducted at source on virtual digital assets transactions would be applicable and not rate applicable under any other provision. The 2022-23 Budget had proposed levying income-tax of 30% on crypto assets with effect from April 1. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy digital assets tax vda nirmala sitharaman finance bill crypto tax budget Read on App Read on App INDUSTRY BODIES MAKE REPRESENTATION TO SEBI; PLEA TO REVIEW RELATED PARTY NORMS Industry bodies have made a representation to Sebi seeking changes in the new norms on related party transactions that will come into effect from April 1. * Mayur Shetty * TNN Click Here to Read This Story * * * * * * * * MUMBAI: Industry bodies have made a representation to Sebi seeking changes in the new norms on related party transactions that will come into effect from April 1. They have argued that the norms will make it difficult for companies that are large financial investors like LIC and will need to frequently obtain shareholder approval for transacting with firms they have invested in. The new related party transactions norms were introduced by Sebi last year to curb the diversion of funds by promoters. The norms were part of the listing and disclosure requirements and were aimed at improving corporate governance in companies. The Federation of Indian Chambers of Commerce and Industry (FICCI) has called upon the markets regulator to make some changes. It has suggested that the definition of promoter group company should apply only to those entities holding more than 5% of the listed entity. Second, FICCI has said that institutional investors should be allowed to hold up to 20% against 10%, which is enough to trigger the norms from April 2022. It has also called for exclusions for investments made by financial investors. Top corporate houses are also understood to have made representation to Sebi on diluting the norms. LIC would be particularly hit by these norms as it holds more than a 10% stake in several entities that are related parties under the new norms. This could be a challenge once the corporation would list as the new norms would require LIC to declare every related party transaction. The industry body has also called for several exemptions. The exclusions suggested include the issue of preferential securities, tendering of securities under buyback, grant of employee stock options and employee share purchase plans, remuneration of key management personnel of the parent or subsidiary, CSR contribution and normal banking transactions by a bank. In November 2021, Sebi notified amendments to its listing regulations incorporating changes recommended by a working group in 2020. The changes were proposed in light of the several high profile corporate failures that were an outcome of related party transactions that went undetected. These included the DHFL collapse and more recently the default at Cox & Kings. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy Sebi related party LIC Ficci DHFL Read on App Read on App CBIC ISSUES SCRUTINY NORMS RELATED TO GST The Central Board of Indirect Taxes & Customs (CBIC) on Tuesday issued scrutiny guidelines for GST, for the first two years of the new indirect tax regime, as part of a plan to plug leakages and shore up collections. * Sidhartha * TNN Click Here to Read This Story * * * * * * * * NEW DELHI : The Central Board of Indirect Taxes & Customs (CBIC) on Tuesday issued scrutiny guidelines for GST, for the first two years of the new indirect tax regime, as part of a plan to plug leakages and shore up collections. The CBIC has shared an indicative list of parameters, which suggested that there was special emphasis on entities claiming input tax credit (ITC) from certain segments, along with those where tax collected at source, such as for ecommerce. For the last couple of years, tax authorities are keeping a close watch on ITC as they have come across multiple cases of fraud and inclusion in the list of parameters points to possible steps in future, in case widespread misuse is seen. Almost five years after its launch, the government is looking at scrutiny and tighter audit norms to ramp up revenue generation from GST, along with a revamp of the rate structure for which ministerial panels are at work. The standard operating procedure issued to field officers on Tuesday said that the Directorate General of Analytics and Risk Management has been assigned the task to select the GSTINs registered with central tax authorities, whose returns will be picked up for scrutiny. The GST numbers will then be shared with the officers of the zone, with strict timelines given to complete the process. While undertaking scrutiny, officers have been asked to look at data available on the department’s systems, such as eway bills, and keep the interface with the taxpayer to the minimal level. In fact, officers have been advised to avoid seeking documents till the process is complete. In case of discrepancies, a notice is to be issued, seeking explanation, with the amount due and interest on it to be mentioned. “It may also be ensured that discrepancies so communicated may, as far as possible, be specific in nature and not vague or general,” officers have been told. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy tax plug leakage guidelines GST central board of indirect taxes & customs cbic Read on App Read on App FED POLICYMAKERS LEAN INTO BIGGER RATE HIKES TO FIGHT INFLATION Federal Reserve officials are doing little to downplay rising market expectations the U.S. central bank will raise interest rates by half a percentage point in May to curb the surge in inflation, but they also are not dispelling fears the tightening cycle could blow a hole in the economy and labor market. * Reuters Click Here to Read This Story * * * * * * * * By Lindsay Dunsmuir and Ann Saphir - Federal Reserve officials are doing little to downplay rising market expectations the U.S. central bank will raise interest rates by half a percentage point in May to curb the surge in inflation, but they also are not dispelling fears the tightening cycle could blow a hole in the economy and labor market. "The Fed needs to move aggressively to keep inflation under control," St. Louis Fed President James Bullard told Bloomberg TV on Tuesday, repeating his call for the central bank to raise its benchmark overnight interest rate above 3% this year. "Faster is better," he said. Bullard, who dissented on the Fed's decision last week to raise the federal funds rate by just a quarter of a percentage point from the near-zero level, has made this same point before. But his view appears to be gaining traction. On Monday, Fed Chair Jerome Powell said the central bank must move "expeditiously" to raise rates. When asked what would prevent the central bank raising rates by half a percentage point at the May 3-4 policy meeting, he responded: "Nothing." Those comments prompted a flood of bets in futures markets on half-point interest rate increases in May and June. Traders now see the federal funds rate rising to the 2.25%-2.5% range by the end of the year - short of Bullard's view but higher than the 1.9% suggested by Fed forecasts last week. Powell said the economy is strong enough to withstand higher borrowing costs without damaging the labor market and argued the best thing the Fed could do to ensure continued labor market strength is to get inflation under control. But traders are now also building bets that the Fed will start cutting interest rates next year. "The fixed income market squarely does not believe Powell's economic optimism: It is telling us that a soft landing, if the Fed goes down Powell's path, will not only be challenging - it will be impossible," wrote Roberto Perli, an economist at Piper Sandler. 'HAWKISH PIVOT' It's shaping up to be a rocky start for the Fed's first round of rate hikes in three years, and particularly for the way its policymakers are communicating it. Ahead of last week's interest rate increase, Powell had said the Fed would proceed "carefully" due to high uncertainty about the impact on the U.S. economy of the Russian invasion of Ukraine. In his news conference following the release of the Federal Open Market Committee (FOMC) policy statement and projections, Powell said the Fed must be "nimble" in responding to the evolving outlook. And this week the Fed chief downplayed worries over the potential dent to economic growth and focused far more sharply on the likelihood the war in Ukraine could worsen U.S. inflation, which has hit a 40-year high and is about three times the central bank's 2% target. The changes, wrote NatWest economist Kevin Cummins, could reflect Powell's ongoing personal "hawkish pivot" that began in late 2021. "In the near-term, Powell's comments are obviously not the last word as for the size of the expected rate hike in May, especially since the May FOMC meeting is not for another six weeks and Fed actions will be driven by the data," Cummins wrote. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy fed powell st. louis fed jerome powell federal open market committee fed chair Read on App Read on App PARLIAMENTARY PANEL CAUTIONS GOVT AGAINST EARLY EUPHORIA OVER NPA REDUCTION The panel was informed that contrary to RBI's Financial Stability Report projections of the gross NPA ratio of commercial banks increasing from 7.48 per cent in March 2021 to 9.8 per cent by March 2022, the NPA figures at the gross level for public sector banks have decreased from 9.11 per cent as on March 31, 2021, to 7.9 per cent at end-December, 2021. * PTI Click Here to Read This Story * * * * * * * * Cautioning the government against "any early euphoria" with regards to reduction in NPA in the banking sector, a Parliamentary panel on Tuesday said that the bad loans may go up due to some lag impact of the Covid pandemic. The Standing Committee on Finance in its report tabled in Parliament observed that the banking system appears to have weathered the pandemic shock well with respect to non-performing assets (NPAs). The panel was informed that contrary to RBI's Financial Stability Report projections of the gross NPA ratio of commercial banks increasing from 7.48 per cent in March 2021 to 9.8 per cent by March 2022, the NPA figures at the gross level for public sector banks have decreased from 9.11 per cent as on March 31, 2021, to 7.9 per cent at end-December, 2021. "The Committee would like to caution against any early euphoria on this count, as there may still be some lag impact of the pandemic for the banking sector in the pipeline," the report said. It further said that absorbing excess liquidity that was injected as part of the pandemic response to stimulate the economy is necessary, as there may be the possibility of an increase in NPAs. The panel was of the view that prudence is still required and the steps taken by the government to reduce NPAs and to effect recovery should be continued with the same vigour. On digital economy and rising online frauds, the panel said whenever digital frauds are reported by the victims, the onus for prompt redressal should be on the concerned bank and financial institutions. The customer should not be left in a lurch running from pillar to post for grievance redressal, it said. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy standing committee on finance rbi Parliamentary panel NPA ratio financial stability report Read on App Read on App OPTIMISING GST TO MAKE IT DELIVER The move towards a revenue-neutral rate is overdue and the collection forgone because of external events exerting a pressure on prices will make the case for compensating states that much stronger. That imposes its own set of complexities, because the compensation cess will, after June, go to paying loans taken by the Centre to make up for the shortfall in collection during the last two Covid-19 pandemic years. Compensation beyond the term set out in the original bargain with states will distort the tax structure further. * ET Bureau Click Here to Read This Story * * * * * * * * A group of state finance ministers set up to debug India's still-subpar goods and services tax (GST) is expected to collapse the rate structure from four to three. But it is wary of raising the lowest slab on account of the inflationary impact. The move towards a revenue-neutral rate is overdue and the collection forgone because of external events exerting a pressure on prices will make the case for compensating states that much stronger. That imposes its own set of complexities, because the compensation cess will, after June, go to paying loans taken by the Centre to make up for the shortfall in collection during the last two Covid-19 pandemic years. Compensation beyond the term set out in the original bargain with states will distort the tax structure further. The GST Council has had some success in improving compliance, which is showing up in collections in recent months. But this is close neither to the assumed revenue-indifferent point nor to the projected buoyancy. Operational improvements can work only up to a limit. However, to reach a position where, say, every percentage point in economic growth delivers a fixed percentage point in indirect tax collection, the compromises made at the outset will have to be set right. These were in the nature of multiplicity of rates, limited coverage and erosion of the self-policing nature of the tax. India simply cannot afford to kick the GST can further down the road. The pandemic has weakened the fiscal position of both the Centre and the states. India's economic recovery during a period of elevated energy prices is predicated on building physical infrastructure through a surge in government borrowing. Improved tax buoyancy in the reconstruction stage would be better than attempting to fix indebtedness afterwards. GST offers a clear way out of the distortions and inefficiencies that have historically dogged India's tax system. The country has a rules-based mechanism that is known to deliver. By the end of its first decade, India must make its version of GST deliver. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy GST india gst council goods and services tax (GST) energy covid 19 Read on App Read on App GOVT SHOULD EXTEND PERIOD OF LOAN REPAYMENT UNDER ECLGS FOR MSMES: PARL PANEL New Delhi, Mar 21 (PTI) A Parliamentary panel on Monday suggested that the government should extend the period of repayment of loans under the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. * PTI Click Here to Read This Story * * * * * * * * New Delhi, Mar 21 (PTI) A Parliamentary panel on Monday suggested that the government should extend the period of repayment of loans under the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. The Parliamentary standing committee on industry has also asked the government to digitise the GST system to ensure paperless refund of claims. It noted that under ECLGS, the repayment period of 3-4 years, including the moratorium period, is a "very short" period for MSMEs, which are struggling to survive after the second COVID wave. "The committee, therefore, recommends that the repayment period should be extended up to 7-8 years with at least two years of moratorium on the principal amount. "With respect to the interest, moratorium for interest from March 1, 2020 onwards should be announced by the RBI," it said. Noting that a number of MSME-oriented products presently being imported can be manufactured in India, the panel suggested that a Central Market Intelligence Centre be set up for import-related products and components in the country. Further, the committee said the Centre may be entrusted with the task of putting out a list of products which are being imported along with their specifications. It should also spread awareness of the same through electronic, print and social media to attract interested entrepreneurs to set up new manufacturing enterprises in the MSME sector. The committee also expressed "deep concern" over under-utilisation of funds by the Khadi and Village Industries Commission (KVIC) for their flagship schemes, thereby hampering the promotion and development of Khadi and Village Industries and employment generation in rural areas. The KVIC, it suggested, should endeavour to popularise Khadi in new unexplored global markets and also try to secure trademarks in those countries in respect of its various products to safeguard the interests of its consumers and Khadi artisans who are manufacturing genuine Khadi products through their hard work and continuous efforts. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy khadi village industries rbi khadi and village industries commission india emergency credit line guarantee scheme eclgs Read on App Read on App RBI DIVERSIFYING RESERVES FROM DOLLAR RBI governor Shaktikanta Das said on Monday that the central bank started diversifying its reserves out of dollars six months ago. At the same time, he said that the reserves cannot be spent as they are not “our money” but represent a liability. * TNN Click Here to Read This Story * * * * * * * * MUMBAI: RBI governor Shaktikanta Das said on Monday that the central bank started diversifying its reserves out of dollars six months ago. At the same time, he said that the reserves cannot be spent as they are not “our money” but represent a liability. The governor’s comments were made during an interaction with industry leaders at a CII National Council meeting here. Das was responding to a question on the need to relook at reserve investment strategy in view of the West freezing Russia’s reserves held overseas as a part of sanctions. Das said he did not foresee a situation where India would face sanctions. “We are a democracy, we have the rule of law and India doesn’t have any expansionary ambitions. This is something which I think the government has stated and these are not my words,” said Das. “We don’t foresee sanctions but yes, it is something, which going forward, now I think every country will start thinking about.” On diversification of reserves, Das said that India’s forex holdings are distributed in various foreign currencies not just concentrated in one. “We have gold reserves, which are dispersed partly in India and partly outside…The other issue is that you hold your reserves as what? Are you going to move completely towards gold? Liquidity also should be there,” said Das. He said that at present there was no need to talk about issues that don’t exist and these are issues best left to the central bank. “I can only say that at this point of time our reserves are distributed in many currencies, but yes, the majority of which is without doubt dollars and we have decided to diversify, not now but some six months ago we decided to diversify into other currencies.” Explaining why India’s forex reserves cannot be used for domestic investment, Das said that these reserves represent liabilities of the country. He said that while today the reserves were more than the external debt, the situation could change. “Reserves are something which add a lot of stability and confidence in any economy,” said Das. According to data released by the US government of the $7.7 trillion of treasuries that are held internationally, India holds $199 billion as of December 2021, which is down nearly 10% from $220 billion in June 2021. Of RBI’s 744 metric tonnes of gold reserves, 451 is overseas in safe custody with the Bank of England and the Bank for International Settlements and the rest is in India. Follow and connect with us on Twitter, Facebook, Linkedin, Youtube Policy Shaktikanta Das reserves RBI foreign exchange dollar diversification Bank of England Read on App Read on App ENSURE CORRUPT OFFICERS ARE PENALISED: CVC TO BANKS, GOVT DEPTS New Delhi, Mar 21 (PTI) Citing non-implementation of penalty against corrupt officers, the Central Vigilance Commission on Monday asked public sector banks and government departments to ensure that guilty do face the punishment, and the compliance report for 2020 and 2021 should be forwarded to the * PTI Click Here to Read This Story * * * * * * * * New Delhi, Mar 21 (PTI) Citing non-implementation of penalty against corrupt officers, the Central Vigilance Commission on Monday asked public sector banks and government departments to ensure that guilty do face the punishment, and the compliance report for 2020 and 2021 should be forwarded to the CVC latest by June 30. After completion of departmental proceedings, final orders are issued against the Charged Officer (CO) by the competent authority, imposing an appropriate penalty on him, if the charges against the CO are found to be proved, it said. The Commission and the Chief Vigilance Officer (CVO) are also informed about issuance of final orders, the CVC said in an order. "However, it has come to the notice of the Commission that there have been instances where even after issuance of the final orders imposing the penalty, the orders are not implemented in reality, thus making the whole process of disciplinary proceeding infructuous," it said. The Commission has, therefore, decided that in order to ensure end to end action, the Chief Vigilance Officers of the organisations concerned should confirm about implementation of the final penalty orders issued in respect of each Charged Officer, who were found guilty, against whom advice for departmental action was tendered by the Commission, the probity watchdog said. A compliance report in this regard, for the calendar years 2020 and 2021, should be forwarded to the Commission latest by June 30, 2022, said the order issued to the secretaries of all central government departments, chief executives of public sector banks and insurance companies among others. In continuation, the Chief Vigilance Officers of respective organisations should also submit an annual compliance report about implementation of final penalty orders in respect of each such charged officer, latest by 30th June of every year, for the previous calendar year, it added. 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