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A cash crunch at ATMs has hit a dozen states, including Uttar Pradesh, Madhya Pradesh, poll-bound Karnataka, Telangana, Andhra Pradesh, Bihar, Gujarat, Maharashtra, Rajasthan, and Punjab. With automated teller machines (ATMs) drying up, the central government and the Reserve Bank of India (RBI) stepped in to address the currency shortage, even as Finance Minister Arun Jaitley attributed the cash shortage to an unusual spurt in demand during the past three months and described it as "temporary", adding that the ATM cash crunch was being "tackled quickly" and that there was "more than adequate" currency in circulation. To fix the ATM cash crunch , the government said that the printing of Rs 500 denomination notes, about 5 billion of which are printed per day, would be increased by five times. Notes worth Rs 700-750 billion (Rs 70,000-75,000 crore) would be printed in a month. However, what caused the cash crunch and ATMs running dry in the first...

Pushed with the aid of decrease refunds and a demonetisation-subsidized better base, direct taxes have come to the help of the government in its warfare to satisfy its financial deficit target for 2017-18. Direct tax series, net of refunds, has risen 18.7 in step with cent till Monday, in opposition to the 15.7 in step with cent projected within the Budget Estimates (BE). In absolute terms, the parent touched Rs 6.89 trillion, representing 70.3 in keeping with cent of the BE of Rs nine.8 trillion. which includes refunds, gross direct tax collection rose thirteen.five in step with cent to Rs eight.11 trillion. This may be attributed to lower refunds, to the music of Rs 1.22 trillion as on Monday, in opposition to Rs 1.34 trillion at this time a 12 months earlier than, in addition to a higher tax base due to demonetisation. Direct tax series has proven significant improvement throughout all parameters, in terms of increase in each zone. The increase of general gross dire...

After deciding to revoke the legal tender of Rs 500 and Rs 1,000 currency notes in November last year, the Narendra Modi -led central government might now be working on another disruptive step to boost digital transactions — banning the cheque book. A senior functionary of the Confederation of All India Traders (CAIT) on November 16 said the Centre might withdraw the bank cheque book facility in the "near future" to encourage digital transactions. CAIT Secretary General Praveen Khandelwal said the government needed to encourage the use of debit and credit cards. "In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions," he said. Impact of cheque book facility withdrawal Demonetisation was a big disruption for most Indians, right from poor labourers to big industrialists. Now, the withdrawal of the cheque book facility could have a massive impact as well. Most business transactions are...

Prime Minister Narendra Modi , from the ramparts of the Red Fort, rolled out statistics to defend demonetisation, while skipping mention of a lower dividend by the Reserve Bank of India (RBI) as a pitfall of this move. In his Independence Day speech, Modi implicitly took on critics for blaming his government for not generating jobs, saying the MUDRA scheme is making youth a provider of jobs. He said the goods and services tax (GST) has led to a 30% cut in travel time by trucks, but did not refer to the transitory problems that have led to a contraction of the Index of Industrial Production (IIP) and Purchasing Managers’ Index (PMI). He recalled that the first task of his dispensation was to constitute a special investigative team to underscore his government’s stance on corruption. “ I want to tell the countrymen proudly that we have confiscated black money worth Rs 1.25 lakh crore. The culprits would be brought to book and forced to surrender,” he said. He said d...

Digital payments company MobiKwik has partnered Samsung Pay, under which consumers will be able to make payments with a single tap using select Samsung handsets. As part of the tie-up, MobiKwik wallet is now integrated with Samsung Pay Mini to enable one-tap payments at more than 1.4 million MobiKwik-powered merchants across the country, the digital payments firm said in a statement. MobiKwik's mobile wallet will also be available soon to Samsung Pay users, it added. "The future of digital payments in India will thrive only by collaborating with various ecosystem partners to drive acceptance. More than 55 million users and 1.4 million merchants will benefit from this association," MobiKwik Head of Growth Daman Soni said. There has been a massive growth in number of transactions using digital platforms in the country, especially after the government's move to scrap high-denomination notes in November. The government has also introduced a number of schemes...

Financial News Lack of adequate machines and related infra has delayed the counting of demonetised currency that has come back into the system, the Reserve Bank of India (RBI) Governor Urjit Patel is learnt to have told a parliamentary panel on Wednesday. During the meeting that lasted more than three hours, Urjit Patel, according to sources said that the central bank is yet to arrive at the final figure since counting was still in progress. The parliamentary standing committee on finance, that will table the report on demonetisation in the monsoon session starting July 17, gave the RBI chief 15 days time to submit data on deposits of invalidated Rs 500 and Rs 1,000 notes, besides counterfeit currency in circulation. The RBI has cut staff holidays to complete the counting of currency which returned to the system after demonetisation, and has also ordered more machines to expedite the process, Patel told the panel, informed sources. According to sources, the panel told ...

Financial News Demonetisation did not choke the real estate sector, according to data released by the National Housing Board (NHB). As many as 26 of 50 urban hubs across the country have shown a moderate upturn in housing prices between December 2016 and March 2017, an NHB index has said. The list covering metros, state capitals and smaller cities indicated demonetisation did not strangle the real estate sector after the announcement by Prime Minister Narendra Modi on November 8. The months after the announcement had seen a severe shortage in cash transactions. Several sectors had said they were severely affected as people put off purchases. But the NHB Residex Index showed there had been big gains in smaller cities. Prices went up 10 per cent in Visakhapatnam and Raipur, while Kanpur saw 8 per cent growth. Bhubaneswar saw the highest growth of around 11 per cent in the three months, while Chandigarh saw a rise of 6 per cent. Even metros saw an uptrend. Prices in Mumba...

The government has permitted banks and post offices to deposit junked Rs 500 and Rs 1,000 notes with the Reserve Bank by July 20. This is the second window the government has provided to banks, post offices and cooperative banks for depositing the junked notes with RBI. The earlier window was open till December 31, a day after the 50-day period of demonetisation of high value currency. "Such specified bank notes may be deposited by such bank, post office or district central cooperative bank, as the case may be, in any office of the Reserve Bank, within a period of 30 days from the commencement of these rules," said a government notification. It further said that they should get the exchange value by credit to the account of such subject to the satisfaction of the RBI of the conditions specified. RBI will accept deposits collected by any bank or post office by December 30, 2016 or by any District Central Cooperative Bank from November 10-14, 2016 shoul...

Financial News : Axis Bank, the country’s third largest private sector lender, is looking to expand the scale of its digital transactions . Such transactions currently make up 70 per cent of the bank’s overall transactions compared to branch banking which accounts for only 12 per cent. “ Our intent is to increase the volume of digital transactions. People are getting used to it and it is on us how we intensify the digital operations. At present, digital transactions contribute around 70 per cent to our total transactions and we see lot of opportunities in this space driven by Aadhar-enabled payments and mobile app based banking”, said Sidharth Rath, group executive (corporate relationship group and transaction banking). Mobile banking transactions of Axis Bank surged 140 per cent while internet banking moved up 36 per cent in last fiscal, largely due to demonetisation that significantly suck cash out of the system. “ All our customers are digitally enabled. Digital tran...

Services PMI Moving away from the contractions related to demonetisation, the services sector maintained a stronger rate of expansion in February, the widely tracked Nikkei’s Purchasing Managers’ Index (PMI) survey showed on Thursday. PMI for services rose to 51.5 points from 50.3 points in February. A reading above 50 signifies expansion, while one below that shows contraction. The sector had contracted for three consecutive months till January as business flow failed to recover from the impact of demonetisation. PMI averaged 49.3 points in the third quarter of the financial year; it was at 49.5 points for the first two months of the fourth quarter. Underpinning the expansion in services activity was a back-to-back rise in new business inflows. As was the case for output, the growth of new work also gathered pace in March. Anecdotal evidence highlighted improving demand conditions. At the same time, factory new orders increased at the strongest rate since last October. I...

After PM  Narendra Modi   took a dig at Harvard University alumni during his election campaign, the university has responded with an insightful critique of demonetisation by looking at it in the context of the BJP’s resounding electoral victory in the recently concluded state elections. The article, titled ‘Early Lessons from India’s Demonetization Experiment’, authored by Bhaskar Chakravorti, was published in  Harvard Business Review on March 14. Chakravorti, a public policy professor at Tufts University, was one of the first critics of demonetisation. In a paper published on December 14, 2016, in  Harvard Business Review , Chakravorti had called demonetisation a “case study in poor policy and even poorer execution. Unfortunately, it is also the poor that bear the greatest burden.” In his latest paper, Chakravorti says: “Four months passed. The country emerged with few obvious scars. Although the impact on corruption remains to be ...

Bharatiya Janata Party's (BJP's)   landslide victory in the key state of Uttar Pradesh (UP) is likely to intensify the government's war against black money / cash, suggests the latest Bank of America-Merrill Lynch (BofA-ML) equity strategy report co-authored by Sanjay Mookim and Anand Kumar. The crackdown, the report suggests, could entail more transaction disclosure, increased tax on cash, restrict cash holdings (remaining un-implemented proposal of SITon black money). This war on cash, BofA-ML feels, will be beneficial for banks as it would result in more financial inclusion, more fees and potential lending. Better reporting can allow private banks to compete with the public sector units (PSUs) for SME (small and medium enterprises) business, it says. Also Read: UP poll result has made a mockery of the criticism that demonetisation got: Chris Wood "Loan waivers (if large enough and if replicated outside of UP) can be taken negativ...

Like Bihar elections, this event would also be forgotten by the markets within a week, analysts say Exit polls have predicted a victory for the Bharatiya Janata Party (BJP) in the key state of  Uttar Pradesh (UP)   that is being dubbed as the semi–final to the 2019 general elections, and appeared to be too close to call. Over the past few sessions, the markets have been moving sideways, consolidating the 9% gain made thus far in calendar year 2017. Analysts say the outcome could create distractions (or positives) for the government and will be interpreted as a referendum on the government’s demonetisation drive.  Here is a quick compilation of what the leading market experts think about the possible outcome and its implication for the economy and markets: G. CHOKKALINGAM, FOUNDER & MANAGING DIRECTOR OF EQUINOMICS RESEARCH & ADVISORY The exit polls have predicted significant improvement for the ruling party at...

Banks , including HDFC Bank, ICICI Bank and Axis Bank, from March 1 started imposing a minimum charge of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month. The new charges would apply to savings as well as salary accounts. The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn. You can read about then details of this move here:  Banks to levy Rs 150 after 4 cash transactions Business Standard did a quick poll on Twitter yesterday and the results show how unpopular this move is  We asked: Are banks justified in charging customers for cash transactions in their own accounts? Out of 575 responses, 78 per cent replied in the negative while 22 per cent supported the banks' move.   Read more

NEW DELHI: In a welcome move, the Reserve Bank of India (RBI) on Monday decided to increase the cash withdrawal limit from ATMs to Rs 10,000 per day from the present Rs 4,500 with immediate effect. However, there is no change in the weekly withdrawal limits, which stays at Rs 24,000. "The limit on withdrawals from ATMs has been enhanced from the current limit of Rs 4,500 to Rs 10,000 per day per card. It will be operative within the existing overall weekly limit," the central bank said in a statement. The limit on withdrawal from current accounts has been enhanced from the current limit of Rs 50,000 per week to Rs 1,00,000 per week. This also extends to overdraft and cash credit accounts. On December 28, the RBI had revised the cash withdrawal limit from Rs 2,500 to Rs 4,500+ , which came into force on January 1, 2017. The move had been hailed by cash-strapped people all over the country. The RBI had imposed these limits in November after the government announc...