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

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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.

Lost Due To Demonetisation

Sudden demonetisation of ₹500 and ₹1,0000 notes, an elimination of existing money stock that enables economic transactions, is bound to have an economic impact, apart from penalising those who hold this money as store of their tax-evaded illegal wealth. Considering various possible scenarios, a loss of gross domestic product will be inevitable.

Converting Urban Cooperative Banks into Commercial Banks

The debate around the conversion of Scheduled Urban Cooperative Banks into commercial banks warrants an investigation into their performance. The larger objective is to examine whether SUCBs are able to compete with their peer group and remain viable when subjected to stringent regulatory requirements, in the event of their conversion. The performance of SUCBs as a group is comparable with that of their peer group, that is, old private sector banks, with the exception of non-performing assets. Performance rankings reveal that the smaller SUCBs are better performers than larger ones, calling for a relook at the threshold for conversion. In the event of conversion of SUCBs into commercial banks, some of the converted entities will be as good as some of the existing OPSBs, or may even be a shade better.

A Banker's Account

No Regrets by D N Ghosh; New Delhi: Rupa Publications, 2015; pp xi + 375, ₹695 (hardcover).

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.

What Should be the Criteria for Choosing RBI Governor?

Spending a few years in Washington D C as India’s executive director at the International Monetary Fund or some Ivy League think tank should not be considered as a qualification for the post of Governor of the Reserve Bank of India.  Instead, deputy governors and even those junior to them who have spent the immediate preceding years working in Mumbai, and most of whom do have doctorates the PhDs in relevant sub areas, should have the first lien on the governor’s job.

Not in People's Interest

The politics and economics of interest rate formation in this country must be studied carefully. Lowering the interest rate raises stock prices in an environment where they themselves cannot move up thanks to the fundamentals of the economy that are not conducive.

‘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.

Financial Sector Reforms

Unified Financial Code: Is India Ready? A Critique on the Financial Sector Legislative Reforms Commission Report by S S Tarapore; Gurgaon: LexisNexis, 2015; pp xii+166, ₹295.

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