A Quick look on Financial Awareness V

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A Quick look on Financial Awareness V

1. Rajya Sabha approves Bill to set up RBI rates panel

  • The Rajya Sabha recently, approved a Bill that sets up a panel to decide interest rates bringing the Reserve Bank of India’s (RBI) policy making process in line with that of its major global counterparts.
  • The measure was part of a broader finance Bill approved by the Lok Sabha last week meaning it now becomes a law.

Currently, RBI governor Raghuram Rajan is the sole authority for monetary policy decisions with assistance from a panel that is purely advisory.

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Key points –  

(i) Under the new law-and from a date that has yet to be set-a six-member monetary policy council will set interest rates by majority with a casting vote for Rajan in the event of a tie.

(ii) Three members will be representatives from the government and three from the RBI.

(iii) Members from the RBI side would be governor, deputy governor in charge of the monetary policy and an officer of the RBI to be nominated by the Central Board.

(iv) The government-nominated members would be appointed on recommendations madeby Search-cum-Selection Committee.

(v) The Bill also requires the RBI to review its inflation target every five years. There is currently no set time frame for such reviews.

(vi) The reform is a big boost for Rajan, who since taking office in 2013, has been trying to align the manner in which India sets monetary policy with that of Central banks in developed economies.

2. RBI to issue Rs 1000 banknotes with inset letter R

1000 notes

  • The Reserve Bank of India (RBI) will shortly issue banknotes of 1000 rupees denominations with inset letter ‘R’ in both the number panels.
  • These new banknotes will be issued in the Mahatma Gandhi Series – 2005. Besides, all the banknotes in the denomination of 1000 rupees issued by RBI in the past would continue to be legal tender.

New features

(i) The design of these new 1000 rupees banknotes is similar in all respects to the earlier issued banknotes of same denominations in Mahatma Gandhi Series – 2005.

(ii) On the obverse side: These banknotes will have all the other security features, including ascending size of numerals, bleed lines and enlarged identification mark.

(iii) On the reverse side: These banknotes will bear signature of RBI Governor Raghuram G Rajan. It will also have the year of printing ‘2016’ printed.

3. Digital India eKranti programme to offer passports, pension online

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  • Government is implementing the Digital India programme to transform the country into a digitally empowered and knowledge economy so that various services like passport, pension and driving licenses could be delivered online.
  • Telecom and IT Minister Ravi Shankar Prasad said one of the primary focus areas of Digital India is Pillar 5: eKranti – electronic delivery of services.

Key points – 

(i) “e-Kranti aims to ensure a government wide transformation by delivering all services electronically to the citizens through integrated and interoperable systems via multiple modes while ensuring efficiency, transparency and reliability of such services at affordable costs.

(ii) In e-Kranti, 44 Mission Mode Projects (MMP) – 13 central, 17 state and 14 integrated MMPs – are being implemented. Under the 25 operational MMPs 222 services are being provided. More than 192 e-transactions have been reported since January 1, 2016.

(iii) “Under e-Kranti, the government of India has made concerted effort to make offline government services to be also delivered through online mode, ensuring that all citizens would have access to them, thereby improving the quality of basic governance on an unprecedented scale

4. Kotak Mahindra becomes 2nd most valued private bank

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