Order on notes not an attempt at demonetisation:

 Rajan "This is not an attempt to demonetise. It is an attempt to replace less effective notes with more effective notes. I understand people are making a different interpretations. Unfortunately that should not be the interpretation," he said. Order on notes not an attempt at demonetisation: Rajan Reserve Bank Governor Raghuram Rajan today said the order withdrawing all currency notes printed before 2005 was not an attempt at demonetisation or had anything to do with the general elections. He also made it clear that the pre-2005 notes will continue to be legal tender. "This is not an attempt to demonetise. It is an attempt to replace less effective notes with more effective notes.

 I understand people are making a different interpretations. Unfortunately that should not be the interpretation," he said. Rajan was answering a question on the RBI's last night decision to withdraw all currency notes printed before 2005 , after he delivered the 8th R N Kao Memorial Lecture here. CBI Director Ranjit Sinha had asked him about the significance of the decision coming before the general elections. "I have to say that it (withdrawal of notes) has nothing to do with elections which certainly is not the objective," Rajan said. He said there has been a long standing demand that these notes have unfortunately become less secure. The notes after 2005 have greater security features and the Finance Ministry sought withdrawal of the pre-2005 notes. RBI had yesterday said that after March 31, 2014, it will completely withdraw from circulation all bank notes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes.

Asset quality, cyber risk perceived as high risk: RBI survey 

The asset quality of banks, risk on account of capital requirement, credit growth and cyber risk have been perceived as high risk factors among institutional risks, according to the systemic risk survey (SRS) .The asset quality of banks, risk on account of capital requirement, credit growth and cyber risk have been perceived as high risk factors among institutional risks, according to the systemic risk survey (SRS) conducted by the Reserve Bank of India (RBI) during October-November 2016. According to the survey results global risks were perceived as medium risks affecting the financial system. The risk perception on macroeconomic conditions and institutional positions have been categorised in the medium risk category in the current survey. Market risks as well as general risks have been perceived to be in low risk category in this survey. Within global risks, the risk on account of global growth, sovereign contagion and commodity prices were categorised as medium risk.

In the macroeconomic risks group, corporate sector risk and pace of infrastructure development were perceived to be in high risk category, while risk on account of domestic growth, domestic inflation, capital flows and household savings were considered to be in medium risk category in the current survey. The respondents have rated the foreign exchange risk, equity price volatility and interest rate risk in medium risk category as part of the financial market risks. The systemic risk survey was conducted to capture the perceptions of experts, including market participants, on the major risks presently faced by the financial system. Majority of the participants in the current round of survey felt that the possibility of a high impact event occurring in the global financial system in the short term as well as in the medium term period is medium. However, while majority felt that possibility of occurrence of such event in the domestic financial system is low. Most respondents continued to be fairly confident in the global financial system, while there was a significant increase in the respondents in the current survey who reflected their high confidence in the Indian financial system. Outlook on credit demand and its quality (October 2016) Source: RBI systemic risk survey (October 2016) On the issue of likely changes in demand for credit in the next three months, the majority of the respondents were of the view that it might either increase marginally or remain unchanged. A majority of the respondents indicated that the average quality of credit would remain unchanged in the next three months, though, a number of respondents also perceived that it is likely to deteriorate.

Expect Nifty to take support at 7896: 

Dynamic Levels According to a report by Dynamic Levels, Nifty is expected to take support of its recent low of 7896. As 8148 is the one week high of Nifty future, it may act as a major resistance with the next target as 8264. (more) , Dynamic |Levels

 Dynamic Levels' Market Outlook: Market to remain volatile ahead of F&O expiry today, crucial support at 7896 Indian Market Outlook: The Indian benchmark index Nifty showed profit booking after touching 8100 and closed at 8034 a day before expiry. Market are expected to remain volatile today because of F&O expiry. Nifty is expected to take support of its recent low of 7896. As 8148 is the one week high of Nifty future, it may act as a major resistance with the next target as 8264. 
Bank Nifty has major support at 17606 and resistance at 18027 above which next target is 18274. Nifty Future is opening at 8028 as per SGX Nifty at 8:40 am IST, 6 points below its previous close of 8034. Disclaimer: The views and investment tips expressed by investment experts on  are their own, and not that of the website or its management advises users to check with certified experts before taking any investment decisions.

Rupee opens flat at 68.24 per dollar USD-INR 

 

Expected trading range for the day 68-68.30/dollar, says Mohan Shenoi of Kotak Mahindra Bank. The Indian rupee opened flat at 68.24 per dollar on Thursday versus previous close 68.24. Mohan Shenoi of Kotak Mahindra Bank said, "Year-end holidays expected to keep volumes and activity in currency markets low and thin. USD-INR expected trading range for the day 68-68.30/dollar." The Japanese yen strengthened against the dollar, meanwhile the dollar index is firm above 103 mark, remember it has gained 4.7 percent this year. All those gains have come after the November 8 US election

Cashless Delhi Metro: Is Modi govt resorting to force? 

Among the slew of measures the Narendra Modi-led government is taking to promote digital transactions, the decision to make 10 Delhi Metro stations operate cashlessly appears to be a forceful one. Chaitanya Gudipaty Among the slew of measures the Narendra Modi-led government is taking to promote digital transactions, the decision to make 10 Delhi Metro stations operate cashless appears to be a forceful one. 

 Beginning January 1, 2017, commuters travelling from these stations -- Rohini East and Rohini West on Red Line; MG Road Station on Yellow Line; Mayur Vihar Phase-I, Nirman Vihar, Tilak Nagar, Janakpuri West, and Noida Sector-15 on Blue Line; and Nehru Place and Kailash Colony on Violet Line -- will have to use smart cards or digital wallets -- Paytm for now -- to pay fares. While reportedly 70 percent of ticket purchases at these stations are digital, the move is at least unfair on two counts -- a) it takes away a customer's right to choose; and b) a tie-up with Paytm creates a monopoly for the e-wallet operator. Legal tender can, however, be used at select ticket counters at these stations. So, citizens will likely have to prep for long queues for cash-based purchased. The issue with digital modes of payment is the value. For example: A Rs 100 paid in cash translates into Rs 100 on the Delhi Metro Rail Corporation (DMRC) smart card. But, an e-wallet provider will take a commission for the service provided. 

Essentially, Rs 100 in Paytm wallet may not fetch you 10 tickets worth Rs 10 each. While it helps that about 70 percent of the transactions at these 10 stations are made through smart cards and tokens, the problem will only compound if the move is extended to other metro stations. Citizens are yet to come to terms with the currency overhaul that began about 50 days ago. The Reserve Bank of India (RBI) is facing hiccups in printing new Rs 500 and Rs 2,000 notes and banks are struggling to recalibrate ATMs to dispense the new notes. Also, migrant labourers and daily wage labourers, who depend on public transport and don't have bank accounts, hit by cash crunch are leaving the city in droves. 

The new Rs 2,000 note is as good as unusuable and the RBI is far from having an adequate stock of Rs 500 notes in ATMs.Diktats, in such a situation, are likely to turn public opinion against cashless transactions. Another force at play is the placement of Paytm as the only go-to mode of wallet-based payment. While other e-wallet operators such as Freecharge and Mobikwik may be roped in later, Paytm tie-up raises more questions than answering digital payment quandary. Even here, DMRC commuters have been, at least temporarily, robbed of the choice of e-wallets. This gives Paytm an unfair advantage over its rivals, in turn, creating a monopolistic environment for the Vijay Shekar Sharma-led mobile wallet company. If the government could wipe off currency notes worth Rs 14 lakh crore overnight, it should have taken the interests of other e-wallet companies as well. That demonetisation is a "short-term pain" for the common man, thrusting regulations down his throat without consent can induce a "long-term pain" for the government.

 Digital payments will help lower fiscal deficit....!

Jaitely with the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency. 

Finance Minister Arun Jaitley today expressed hope that demonetisation will help increase government revenue and lower fiscal deficit, leading to higher expenditure on defence and rural infrastructure. With the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency, he said at the launch government of Digi Dhan Mela here. He illustrated this point by saying that shifting towards less cash economy will help bridge fiscal deficit and bring about improvement in rural India. The will pass on lesser burden to the posterity if the fiscal deficit is lower, he added. At the same time, it will augment capability of administration, increase defence expenditure and improve spending on the poor. The government aims to bring down fiscal deficit to 3.99 per cent of GDP this fiscal. Anonymity of money is gone with demonetisation as the money has come into the banking framework and becomes part of the formal system leading to strengthening of banking, he said. The banks, in turn, can extend more loans and help build a better economy, Jaitley added. Earlier in the day, Prime Minister Narendra Modi unveiled two schemes -- Lucky Grahak Yojana and Digi Dhan Vyapaar Yojana -- for customers and traders alike to promote mobile banking and e-payments. A total of 15,000 people will get rewards as Christmas gift through a draw, whereby each of them will have Rs 1,000 in their accounts. "Starting today, this scheme will continue for the next 100 days. Everyday, 15,000 people are going to receive rewards of Rs 1,000 each. In the next 100 days, lakhs of families are going to receive crores of rupees as gift, but you will be entitled to this gift only if you make use of mobile banking, e-banking, RuPay card, UPI, USSD - such means and methods of digital payment," Modi said. In addition, there will be a grand draw once every week for such customers in which the prize money will be in lakhs of rupees. On April 14, on the occasion of birth anniversary of Dr Baba Saheb  Ambedkar, there will be a mega bumper draw where rewards will be in crores of rupees.

Debt funds you should buy for stable gains in 2017

 If you are looking to park your money in fixed income for gains in 2017, you can consider investing in long-duration debt funds which are likely to benefit from falling interest rates. Investment analysts and advisors feel long-duration bond funds could show good returns in the coming months, with the Reserve Bank of India likely to signal softer interest rates. “Falling rate favour long-duration bond funds since they enjoy higher price changes for smaller changes in interest rates. On the other hand, funds in the shorter end of the curve will be affected less by rate changes. The only catch for long term investors investing in long term bonds is that they have to reinvest forthcoming coupons at lower rates which results in lower YTM,” Vijayananda Prabhu, Investment Analyst, Geojit BNP Paribas, told Moneycontrol. In the previous review of the Monetary Policy on December 7, RBI Governor Urjit Patel had kept repo rate unchanged at 6.25 percent while stating the central bank was “retaining an accommodative policy stance.” Manoj Nagpal, CEO of Outlook Asia Capital, also favours long-duration bond funds along with dynamic bond funds. “Higher liquidity in the banking system will remain longer than expected and credit offtake is likely to be sluggish in the next 12 months. Hence, banks will continue to reduce interest rates on deposits and the re-investment risk increases during the next 12-18 months.

 At the same time, the current pause in cut in interest rates continues to provide investors with a suitable time to invest in long-duration debt funds and dynamic bond funds,” he said. Dynamic Bond Funds invest in the debt market when the fund manager thinks it appropriate. The fund manager would buy and sell debt instruments as per market movements and the interest rate outlook. Prabhu advises holding a mix of duration and accrual funds. “We have been recommending our debt fund investors to have a balanced portfolio of Accrual and Duration funds in their portfolios to protect downside from any surprises. A fine mix of Duration and Accrual funds will help in generating optimal returns,” he said. He suggests a 3-year holding period for bond portfolios. “Since easier interest rates are inevitable in the long run, one could adopt a 60-40 Duration-Accrual strategy to benefit from current corporate yields and future rate cuts. These portfolios could be held for a 3-years horizon till rates bottom down and redemption turns tax efficient,” he says. The focus of Accrual Funds is earning interest income from debt investment while duration funds look for capital appreciation as well in a falling interest rate scenario

How India lobbied Moody's for ratings upgrade, but failed....!

India criticised Moody's rating methods and pushed aggressively for an upgrade, documents reviewed by Reuters show, but the U.S based agency declined to budge citing concerns over th country's debt levels and fragile banks.

India criticised Moody's rating methods and pushed aggressively for an upgrade, documents reviwed by reviewed by reuters show, but the US based agency declined to budge citing concerns over the country's debt levels and fragile bank.

Winning a better credit rating on Idia's sovereign debt would have been a much needed endorsement of Prime Minister Narendra Modi's economic stewardship, helping to attract foreign investment and accelerate growth.    

Since storming to power in 2014, Modi has unvelied measure to boost investment, Cool inflation and narrow the fiscal and current account deficits, but his policies have not been rewarded with a ratings upgrade from any of the "big three global ratings agencies, who say more is needed.

Previously unpublished correspondence between India's finance ministry and Moody's shows New Delhi failed to assuge the ratings agency's concerns about the cost of its debt. billions in bad loans.