ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By RBI

Theoretical Analysis of ‘Demonetisation’

With the aid of simple theoretical tools used in classroom lectures, the implications of the recent “demonetisation” exercise in India are analysed. It lends support to conclusions reached by other authors on the impact of demonetisation with the aid of available data. Following Robert Lucas’s Nobel lecture, the merits of economic policies that assume the form of random shocks to an economic system are questioned. 

Minting Money for India

The 1980s was a period of currency shortage in South Asia. South Korea's moneymaking technology was key to countries like India, Bangladesh, Bhutan, and Pakistan, where "made-in-Korea" banknotes and coins were circulated. Further, South Korea's moneymaking technology was transferred to some countries like Bhutan to produce currency. Such export of currencies and technology transfer from South Korea to South Asia is significant in the sense that possessing and producing unique national currencies is closely linked to state legitimacy and power.

Concentration, Collusion and Corruption in India’s Banks

Why would companies, for whom costs rise with higher interest rates, choose to amass credit as interest rates rise? Were more and more loans taken with the understanding that default would be inevitable? Only a commission of inquiry with a specifi c mandate to understand the years of loose lending by banks in India can answer these and other uncomfortable questions. These answers are needed in the interest of securing our economy, and indeed our democracy.

‘On-tap’ Bank Licences

Critically evaluating the draft guidelines for “on-tap” bank licences put up by the Reserve Bank of India, it is argued that India’s banking system is already sufficiently competitive, and there appear to be few who would be willing to enter the banking business. Entry of newer players, especially those with corporate backing, cannot be the priority at the moment. The priority over the next two or three years has to be the resolution of the non-performing assets problem and strengthening of the existing players.