RBL Bank Crisis: Vishwavir Ahuja Steps Down From CEO Post, AIBEA Cautions Something Wrong At RBL Bank

RBL Bank crisis

While the rest of the world was busy celebrating Christmas eve, there seemed to be some massive events happening in the RBL that indicates RBL Bank Crisis like situation . The 78 years old bank lost its existing MD and CEO. Additionally, the Reserve Bank of India appointed Yogesh Dayal as an additional director on the bank’s board.

Before the RBL Bank crisis, Yogesh K Dayal was serving as chief general manager in the communication department. The central bank also announced indefinite leave for the existing CEO and MD of RBL Vishwavir Ahuja, who hosted the CEO and MD post for the past ten years. Therefore, Rajeev Ahuja was selected as an interim CEO and MD, which is still subject to approval from the authorities.

The cause that invoked RBL Bank crisis is still uncertain, and speculations were doing the internet rounds. The association of bank employees AIBEA had also written a letter to the finance minister of India, Nirmala Sitharaman, to bring to her notice that something was not going well inside the RBL Bank. The association also expressed its fear that the RBL Bank seemed to follow the Yes Bank and Lakshmi Vilas Bank’s footsteps.

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Reason Behind RBL Bank Crisis

The exact reason why these two actions took place leading to RBL Bank crisis remains clouded. As yet, neither the bank nor the regulator has furnished any justification.

Although, at the moment, the solid backdrop of the major events leading to RBL Bank crisis is still sparse. But the actions the Reserve Bank of India took in the case of RBL and a few other banks in the past clearly shows that India’s top bank wanted to monitor the finance and governance of the RBL bank closely. Often the Reserve Bank of India places its people into the management bodies of the private banks to carry out in-depth scrutiny.

At the moment, nothing clarifies the exact cause of the RBL Bank Crisis. However, the banking industry experts speculate either the RBI found discrepancies in the regulations at the RBL Bank, or the central bank of India doubted the RBL Bank’s integrity as a result of constant malpractices in the transactions.

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The RBL Bank, in the last five years, has reported its overall advances been doubled. The bank has exceeded the mark of Rs 58,000 crores from Rs 29,000 crore back in 2017.

On the other hand, the non-performing assets and bad loans of the RBL Bank have also shown a tremendous swell. The bank’s NPA has risen to Rs 2,600 crores from Rs 357 crores in 2017.

Some reports reveal that the RBL Bank promoted retail credit, credit cards, and micro-financing. The bank is believed to have made a blunder by overlooking its financial situation.

The association of bank employees AIBEA said that it is imperative to take necessary actions to prevent the RBL’s customers from suffering as the customers of Yes Bank and Lakshmi Vilas Bank did when both the bank went into financial troubles. The AIBEA association also suggested merging RBL Bank with any public sector bank as a solution for RBL Bank crisis.

The Reserve Bank of India (RBI) had earlier this year approved RBL’s request to extend Ahuja’s resignation as CEO for a third three-year term. However, RBL Bank has been granted a one-year extension by the Reserve Bank of India, commencing on June 30, 2021.

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From 2001 through 2009, Vishwavir Ahuja served as the managing director and chief executive officer of Bank of America in India. To see this is to see that the RBI has been careful.

Government to ban all private cryptocurrencies

A bill to ban all private cryptocurrencies in India, with sure exceptions to push the underlying technology and its uses, is among twenty six bills to be introduced within the coming winter session of the Parliament.

Titled ‘The Cryptocurrency and the Regulation of the Official Digital Currency Bill, 2021’, it’s among the list of latest bills for introduction, consideration and passing.

“To produce a helpful framework for creation of the official digital currency to be issued by the depository financial institution of India,” the bulletin listing the legislative business denoted on Lok Sabha’s website said.

The winter session of Parliament starts from November twenty nine.
“The Bill additionally seeks to ban all private cryptocurrencies in India, however, it permits sure exceptions to push the underlying technology of cryptocurrency and its uses,” the bulletin said.

The Reserve Bank of India is examining the feasibleness of launching its own central bank digital currency however is nevertheless to make your mind up on the possible date for launching a project.

However, the Lok Sabha bulletin didn’t offer the other details concerning the Cryptocurrency and the Regulation of the Official Digital Currency Bill, 2021.

Earlier this month, a high level meeting convened by Prime minister Narendra Modi commanded a comprehensive review on cryptocurrencies.

Government sources had said that it absolutely was viewing “forward looking and progressive” regulation of cryptocurrency and that they had created it clear that an unregulated marketplace for digital currency can not be allowed to become avenues for hiding and terror funding.

During the meeting there was a powerful read that tries to mislead the youth through non-transparent advertising, that over-promised, required to be stopped, sources had detected.
Shortly after the meeting, Parliament’s committee on finance met to seek views from varied trade participants.

While suggesting that a ban might not facilitate, trade representatives told the parliamentary committee that cryptocurrencies ought to be regulated since they can’t be stopped, amidst issues over security and capitalist protection by a number of the panel members.

Addressing an occurrence last week, PM Modi had additionally urged cooperation between the world’s democracies to confirm cryptocurrencies like Bitcoin don’t “end up in the wrong hands”.

While the govt and the Reserve Bank of India are discussing the legislation on the problem for many months currently, there has been a pointy increase in interest in cryptocurrency with many people, together with senior voters started investing in private digital currencies.

India is calculable to own the biggest range of cryptocurrency investors in the world, though price of investment may well be smaller than in western countries.

The depository financial institution has systematically maintained the necessity to ban private digital currency.

Earlier this year, the Reserve Bank of India had sent its call to hunt a ban on such instruments once expressing serious issues.

While declarative that the technology of blockchain ought to be inspired, the financial organization questioned the aim of cryptocurrencies to be labeled as a currency. It had said that a currency may be a sovereign right and can’t be allotted to any person entity.

There are issues over volatility in their value excluding their impact on the economy.
The financial organization has additionally raised security risks coupled to cryptocurrencies, saying that it may bring about to hiding and terror funding due to the anonymity of the transactions.

The Reserve Bank of India has additionally pointed to the hazards to political economy management if these instruments are allowed as they’d create “serious risks” to the financial set-up of the country.

In 2019, the govt had appointed an inter-ministerial panel headed by the then economic affairs secretary Subhash Chandra Garg that had backed a ban on private cryptocurrencies.

Since then there has been intense discussions on the problem whereas the sector had lobbied laborious to prevent a complete ban.

RBI Governor Shaktikanta Das Advocates Crypto Ban In India On The Grounds Of Financial Stability And Security

crypto ban

The Governor of the Reserve Bank of India, Shaktikanta Das, seems not to go gentle with the flourishing crypto market in the country. He is constantly demanding crypto ban in India. As the legislation for the most significant financial sector innovation of the century enters its final phase, Shaktikanta Das has set a distinguishable line between the use of technology to enhance businesses and investments in unmoderated cryptos, which poses a devastating threat to the financial system of India.

A few days earlier, Shaktikanta Das has made severe remarks against cryptocurrencies, questioning their legitimacy. His comments ensued some quick movements from the parliamentary members. Additionally, Prime Minister Narendra Modi held a meeting with parliamentary members and some crypto industry experts to discuss the future of cryptocurrencies and their risks.

The Governor of the central bank of India, Shaktikanta Das, and Government do not agree with each other. Shaktikanta Das is openly advocating the crypto ban. On the other hand, the meeting held under the leadership of Prime Minister Narendra Modi concluded on the note that cryptocurrencies have become unstoppable. So, considering crypto ban is not an option now. The need of the hour is the formulation and implementation of precise strategies to keep a tab on these digital currencies.

Also Read: PM Modi Held A Meeting On The Future For Cryptocurrency In India, Investors See A Gleam Of Hope amidst RBI demands crypto ban.

The central government believes that the blockchain is an evolving technology and should be given some time to grapple with the opportunities that lie in the future. So, the central government agreed to proactively devise strategies to regulate cryptocurrency and create a safe environment for crypto trading.

“The blockchain technology has been around for more than a decade; it did not appear overnight. While addressing at a conference organized by the State Bank of India, Governor Shaktikanta Das very confidently said that “technology will flourish and can thrive without cryptos.

Why Is RBI Governor Firm On Crypto Ban In India?

Being a regulatory central bank, The Reserve Bank of India is worried about the exodus of investors from stock, mutual funds, fixed deposits to crypto investments that go to the tune of millions of dollars. This change in people’s interests and assets will eventually result in the declination of the supply and value of the Indian rupee. Additionally, the Reserve Bank of India doubts the usage of cryptocurrencies for unlawful operations and money laundering.

The Reserve Bank of India has said, after extensive internal debate, that there are significant concerns about the country’s macroeconomic and financial stability. There are more fundamental concerns that need a lot more in-depth discussion.”

Furthermore, Shaktikanta Das admonished lending banks against going overboard in their connections with large technology companies. He demanded that they include “adequate precautions” in their commercial contracts with such companies.

The Reserve Bank of India announced crypto ban in 2018 that made banks no longer able to transact in digital currencies, which blocked the growth of the cryptocurrency business in India. The RBI circular prohibiting cryptocurrencies, on the other hand, was verdict invalid by the Supreme Court in early March 2020, and thus crypto ban was uplifted.

It is also important to add adequate precautions in agreements with financial and technology companies, according to Shaktikanta Das. In the end, the risks are on the books of the banks and NBFCs; thus, the partnership must be well-strategized, the statement mentioned.

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Shaktikanta Das went on to say that although banks were allowed to adopt a collaborative business strategy with fintech businesses based on their commercial considerations, they were required to ensure that the model met all applicable regulations.

Speaking on the economic resurgence, Das said that festival euphoria, pent-up demand, and a slew of high-frequency indicators all pointed to the beginnings of a sustained period of economic growth and expansion. The data from many data indicators, according to Shaktikanta Das, indicated that consumer demand was on the rebound.

It seems that the consumer demand prompted by the holiday season is making a massive recovery; according to the Governor of RBI, “This would stimulate businesses to increase capacity, therefore increasing employment and investment in an environment of favorable financial circumstances.” The recent reduction in excise duty on fuel and diesel by the Central Government, as well as reductions in value-added tax (VAT) by various state governments, would increase people’s buying power, hence creating room for extra expenditure.”

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Das went on to say that, with the economy on the mend and corporations enjoying improved balance sheets, they are in an excellent position to make fresh investments in developing markets.

‘As demand begins to recover, I am optimistic about the business sector’s ability to play a significant part in reversing the investment cycle, which will enable the absorption of excess cash for productive investment,’ he added.

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PM Modi Held A Meeting On The Future For Cryptocurrency In India, Investors See A Gleam Of Hope

future for cryptocurrency

On Saturday, Prime Minister Narendra Modi held a discussion on the future for cryptocurrency, which is enormously booming in India. As more Indians gravitate toward cryptocurrency investments, it was essential to have an official meeting to discuss these cryptocurrencies’ risks. The pivot of the discussion revolved around initiating progressive and forward-looking measures to ensure that rampant exposure to the cryptocurrency does not lead to terror funding and money laundering.

Until now, the central government had not taken a firm stand about the legitimacy and future for cryptocurrency in India. The finance minister Nirmala Sitharaman, during an interview to a leading news portal, had asserted that the central government was looking positively towards adopting modern blockchain technology. The central government was willing to allow a specific time frame for cryptocurrency investors to test its viability in the country.

Nirmala Sitharaman’s statement provided some relief to the native cryptocurrency enthusiasts. However, the future for cryptocurrency was still under the blanket. Prime Minister Narendra Modi’s meeting resulted from RBI Governor Shaktikant Das’ alarming statements about the cryptocurrency and threats related to them. Shaktikant Das, who was recently reappointed as the Governor Of the Reserve Bank of India, raised questions about the legitimacy of cryptocurrency. Furthermore, he alleged that cryptocurrencies are vicious allures used to catch the public interest and eventually amass billions of dollars from investments. He cited the finding of a research group that says a minimum of 7.9 percent of Indians have invested $10 billion in digital currencies, despite the fact that the figures were wildly overblown.

Why Is The Reserve Bank of India Not In The Favor Of Cryptocurrency?

The Reserve Bank of India, since the beginning, has always taken a bitter stance against the thriving cryptocurrency in India. Cryptocurrencies operate on the blockchain that uses peer-to-peer computer network spread worldwide. Being completely virtual, the Reserve Bank of India can not bring these cryptocurrencies under its control, which means there will be no authority scrutinizing the crypto transactions. This loophole can facilitate undeniable opportunities to fund unlawful activities, money laundering, and tax evasion.

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The Reserve Bank of India might have considered cryptocurrency a severe threat with no immediate solution. Thus, the top bank of India decided to impose a ban on crypto trading within the realm of India back in 2018. However, the Supreme Court of India reinstated the restrictions imposed on cryptocurrency in March 2020.

There have been proposals in India to adopt stronger laws for virtual coin transactions, arguing that an uncontrolled environment might drive more domestic savings into the asset class, putting family savings at risk.

The Reserve Bank of India is still skeptical about the future for cryptocurrency. Nevertheless, reports suggested that the reserve bank might develop its digital currency. If so, the new offering from the bank may quench the large population fascinated with virtual currencies.

Undertakings Of PM Modi Led Meeting On The Future For Cryptocurrency

According to several reports on PM Modi’s meeting on Saturday, the central government would closely scrutinize cryptocurrencies because it is developing technology and will take necessary actions.

As cryptocurrencies are gaining momentum in the country, the Centre Government is bound to draft rules and regulations to regulate the virtual currency sector. It is said that a parliamentary finance committee is looking forward to conducting a discussion with prominent crypto sector players on Monday about the viability and future for cryptocurrency.

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The purported meeting will comprise participants from leading crypto exchanges, members of the Blockchain and Crypto Assets Council (BACC), and others who are expected to attend the conference, which is scheduled to take place behind closed doors.

This urgency in dealing with the cryptocurrency issue stems from the fact that Indians are making unprecedented investments into the virtual currency market. According to statistics, Indians had approximately $6.6 billion infused in cryptocurrencies as of May this year, compared to $923 million in April 2020.

In terms of cryptocurrency adoption, India is ranked second on the Global Crypto Adoption Index. According to reports, the entire investment was expected to surpass $10 billion in the first week of November.

The participants of the PM Modi-led meeting also unanimously agreed that attempts to deceive the country’s younger generation by over-promising and non-transparent advertising should be controlled. They also decided that uncontrolled crypto markets should not be permitted to become conduits for money laundering and terror financing.

The meeting also discussed the best practices to mold the unregulated cryptocurrency into a controlled and safe environment. The central government may submit a crypto law to the cabinet for consideration.

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RBI imposes Rs.1 crore penalty on Paytm Payments Bank

The Federal Reserve Bank has obligatory a penalty of ₹1 large integer on Paytm Payments Bank restricted (PPBL) and ₹27.78 hundred thousand on Western Union money Services for non-compliance with sure directions.
In a unharness on Wed, the tally aforesaid on examination of PPBL’s application for issue of ultimate Certificate of Authorisation (CoA), it had been discovered that it had submitted info that didn’t replicate the factual position.
“As this was AN offence of the character cited in Section twenty six (2) of the Payment and Settlement Systems Act, 2007, a notice was issued to PPBL.

“After reviewing the written responses and oral submissions created throughout the non-public hearing, the tally determined that the said charge was supported and secure the imposition of a financial penalty,” it said.
Thereafter, the financial institution by AN order on Oct one obligatory a financial penalty of Rs one large integer on PPBL.
As regards Western Union money Services, the tally aforesaid the corporate had according instances of breach of the ceiling of thirty remittances per beneficiary throughout 2019 ANd 2020 and filed an application for combination of the violation.

“RBI has determined that the non-compliance secure the imposition of a financial penalty once analyzing the combination application, and oral submissions created throughout the non-public hearing,” it said.
The RBI, however, extra the penalties ar supported deficiencies in restrictive compliance and don’t seem to be meant to pronounce upon the validity of any dealings or agreement entered into by the entities with their customers.

The Reserve Bank of India Imposes Rs.1 Crore penalty on the State Bank of India.

The Reserve Bank of India slapped Rs.1 Crore as a fine on the state bank of India as a results of failing to comply with the fraud classification rules.

An investigation on the accounts maintained with SBI by the regulators found it to be deficient in reporting frauds.

“A scrutiny was administered by the RBI during a customer account maintained with the bank and therefore the examination of the scrutiny report and every one related correspondence concerning an equivalent , revealed non-compliance with the aforesaid directions to the extent of delay in reporting of fraud within the said account to RBI,” the regulator said during a statement.

A notice was issued to the lender advising it to show why penalty shouldn’t be assessed on it for similar non-compliance with the said directions.

“Considering the reply of the state bank of india, the oral submissions and notice made by the bank in the personal hearing, RBI made a conclusion that the charge of non-compliance with the foresaid Directions of RBI was warrented and substantiated imposition of monetary penalty”, the regulator said.