Finance

MUMBAI: The finance ministry has issued stern instructions to the heads of state-owned banks not to send gifts to bureaucrats during the festival season, a traditional practice at Diwali, as it looks to clamp down on influence peddling and stem the damage caused by a recent corruption scandal. Some insiders say the gifts are aimed at keeping officials happy, so that the bankers can get to know about personnel changes. The current system of top management appointments at state-owned banks is quite opaque. Senior executives are often dependent on finance ministry officials for information on people movements, including their own promotions. “This is akey reasons that bankers often shower expensive gifts on government employees,” said a retired bank chief who did not want to be named. The letter from the finance ministry to bankers also reflects the Modi government’s determination to clean up the system that’s been rocked by corruption allegations in recent … [Read more...] about Finance Ministry instructs banks not to send festival gifts to bureaucrats

By Andy Mukherjee India is trying something new. After watching the shadow banking industry collapse in slow motion for more than a year, authorities have decided that enough is enough. They want to experiment with in-court bankruptcy for nonbank lenders. But will going to a haircut salon leave the financial system any neater? Dewan Housing Finance Corp. will be the test case of this new approach. The central bank booted out the mortgage financier’s board Wednesday and appointed an administrator who will be tasked with resolution once India’s bankruptcy tribunal takes Dewan under its wing. As I wrote earlier, for the lenders to pretend that they were going to restructure Dewan’s $12 billion in liabilities outside of court supervision was just a Bollywood fantasy. The problem is that India’s 2016 insolvency law, modeled on the U.K. system, is set up for nonfinancial firms. Using the same law to put a financier like Dewan out of its misery has some advantages … [Read more...] about View: Haircuts for Indian finance — bald or bold? Signs from the DHFL case

Arun Jaitley, one of the most well-known leaders of Prime Minister Modi's ruling Bharatiya Janata Party (BJP), has passed away at the age of 66. The death of Jaitley comes only weeks after the BJP lost Sushma Swaraj, a former external affairs minister who was also among the party's leaders; she died on 6 August at the age of 67. Jaitley had been in poor health for sometime. He had undergone weight loss surgery in the US this January and had a kidney transplant in May 2018 at the All India Institutes of Medical Sciences (AIIMS) in New Delhi. In 2014 he underwent bariatric surgery at a private hospital in New Delhi, but had to be shifted to AIIMS due to some complications. Jaitley opted to stay out of Prime Minister Modi’s second cabinet, due to poor health. He represented Uttar Pradesh in the upper house of Parliament, Rajya Sabha. As a top BJP policy-maker, Jaitley was the architect of Prime Minister Modi’s major economic initiatives, like demonetisation and the … [Read more...] about Architect of Indian Government’s Economic Initiatives, ex-Finance Minister Arun Jaitley, Dies at 66

Kerala Finance Minister T.M. Thomas Isaac on Thursday said the Centre had defaulted on its promise of GST compensation for the States. The GST compensation for August and September is yet to be paid for the States, he said at a workshop on ‘Challenges to India’s Fiscal Federalism’ here. The workshop was jointly organised by the Indian Institute of Social Sciences, Puducherry and Gulati Institute of Finance and Taxation, Thiruvananthapuram.Pointing out that there was a serious shortfall in revenue to the States, he said that most of the States have now gone in for borrowing. The Centre has slashed ₹6,500 crore from the sanctioned assistance for various Centrally-funded projects for Kerala, and the State has been forced to squeeze its expenditure in the wake of the economic slowdown.Mr. Isaac also described as a mockery of democracy, the intervention of Puducherry Lt. Governor Kiran Bedi in the decision of an elected government on the free rice scheme.DMK … [Read more...] about Centre has defaulted on GST compensation, says Kerala Finance Minister

Mumbai | New Delhi: It has become impossible for banks to exchange soiled banknotes of Rs 200 and Rs 2,000 denomination as the rules governing their exchange are yet to be amended. Exchange of mutilated and imperfect notes is governed by Reserve Bank of India (Note Refund) Rules which are part of Section 28 of the RBI Act. The Act specifies currency notes of Rs 5, Rs 10, Rs 50, Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 denomination, but Rs 200 and Rs 2,000 notes are conspicuously missing from the list. The Rs 2,000 note was issued soon after the demonetisation on November 8, 2016 and the Rs 200 note was launched in August 2017. There are about Rs 6.70 lakh crore of Rs 2,000 notes in circulation and the Reserve Bank of India has stopped fresh printing of them, economic affairs secretary Subhash C Garg said on April 17. Bankers say there have been few cases of mutilated notes in the new series but caution this could be an issue if the law is not amended soon. The central bank … [Read more...] about Soiled Rs 200, Rs 2000 notes stuck in exchange counter