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Bank of India
16 января, 19:48

‘Humiliated’ RBI staff urge Patel to resist ‘unwarranted’ government interference

Central Banking Staff letter calls for RBI governor to “urgently” address autonomy concerns Reserve Bank of India staff send impassioned letter to governor to protect the central bank’s autonomy; finance ministry objects to claims, stating central bank is fully independent

03 января, 19:30

People: RBI’s new deputy gains BIS scholarship; Mozambique names deputy

Central Banking Reserve Bank of India appoints BIS scholarship winner to deputy post; Victor Gomes takes role at Bank of Mozambique; and more

03 января, 13:21

Мировые рынки: торги проходят на оптимистичной волне благодаря статистике

Вчера, 2 января, фондовые рынки США, Великобритании, Ирландии и Швейцарии были закрыты по случаю праздников, а сегодня торги в Азии проходят без участия Японии.

02 января, 13:38

India's Bank Stocks Fall On Rate Cuts - And Loans Expected To Grow

There is a very large difference between capitalism and markets--just as there is a very large difference between being pro-business and pro- those same markets. An interesting example of which we have here with the stock market reaction to the State Bank of India's interest rate cuts of yesterday. Banks [...]

28 декабря 2016, 21:36

Seems Sensible - RBI Extends Loan Repayment Terms After Demonetisation

The Reserve Bank of India has extended the special allowances available to people with outstanding loans, to enable them some relief while dealing with demonetisation. Yes, obviously, there will be those who start shouting that this shows what a bad idea it all was. But the actual program itself seems [...]

28 декабря 2016, 12:16

90% Of Scrapped Notes In Banking System - India Gets The Tax, Not The Dividend

We have the news that 90% of the scrapped and demonetised Rs 500 and Rs 1,000 notes are back in the banking system. This means that, sadly, there is not going to be a massive dividend to the Reserve Bank of India (and thus government finances, for profits there are [...]

23 декабря 2016, 13:05

Doing Business in India Requires a Mobile-First Strategy

If you want to see how mobile technology can disrupt the very basics of business models and habits established over hundreds if not thousands of years, look at what’s happening in India. A telecommunications revolution, towards fourth generation (4G) mobile services, will transform the consumer landscape over the next 5-10 years. This revolution will transform India the same way automobiles changed America 100 years ago but at ten times the speed — computers, laptops, and tablets will be marginalized as India leapfrogs to mobile 4G by 2020. The consequences are far more revolutionary than have been considered by multinational companies and entrepreneurs.  In order to create value in India in the coming decade, companies must have a mobile-first strategy. Some background: Until the mid-1980s, having telephone service in India was considered the ultimate luxury and less than 0.001% of the population possessed a phone. By July 2016, virtually every Indian had a mobile telephone and access to text messaging, primarily using 2G technology. While it will take many months for the dust to settle and the winners to emerge, one thing is clear: India will soon have one of the largest pools of 4G users in the world. If the penetration rate reaches even half that of mobile telephony, it implies a customer base that is almost twice that of the U.S. population. Nimble companies and organizations will stand to gain by this unique opportunity. In this environment, a new 4G only player has entered in 2016 with an initial investment of $20 billion in network and market infrastructure. Jio is a unit of Reliance Industries Ltd, whose leader, Mukesh Ambani is India’s richest man.  Sending a 5 megabyte  file in 2G takes 8 minutes but the same file can be transferred in 20 seconds using 4G. This is the game changer. India’s unique economic, demographic and distribution ecosystem will lead to many winners as a result of this 4G revolution. Companies entering India should abandon PC- and laptop-based business models and instead focus on digital businesses using the mobile platform. Here are just a few possible opportunities in some of the industries that will benefit the most: Entertainment:  India’s entertainment industry produces the highest number of movies compared to any other country in the world, but rampant piracy has limited revenues to genuine producers.  Digital rights and viewing habits are much easier to manage on mobile networks and revenues are likely to start expanding as more people view their entertainment on mobile devices. Much of this entertainment content in India targets millennials who are likely to consume entertainment content at hours when business loads are light. Banking: India is a cash-based economy and most Indians don’t have active bank accounts, so setting up brick and mortar banks is a challenge. Mobile banking has been touted as a potential solution, but results so far have been limited. Over the last six years, India has issued over 1 billion biometric Aadhaar cards (unique identity cards, similar in principle to the U.S. social security card, but with fraud protection built in); earlier this year India’s retail banks collaborated with the central (or “reserve”) bank of India to release the Universal Payment Interface which provides a basis for secure mobile transactions linked to the Aadhaar identity and has security features based on iris and fingerprint images. 4G will accelerate the proliferation of active mobile banking in India with a better way to deal with such encrypted and image-based data. This move creates myriad opportunities in India’s financial services industry. The short-term crisis caused by demonetization further opens the door for new players to provide niche financial services. There is also a mega opportunity in the cyber security sector. As cashless transactions grow, so will be cashless frauds (or “cashless pick pocketing”). Education: The use of mobile video technology in education and skill building for the millions of India’s youth is another bottom-up revolution in making. With highly affordable 4G mobile technology, it is likely that non-classroom based courses will find a platform to expand dramatically in India. These benefits could flow to legacy players such as public and private universities, corporations such as India’s NIIT and California-based Coursera, nonprofits such as the Khan Academy, or perhaps new upstarts that will rise to close the education gap using 4G enabled smartphones. Healthcare: Telemedicine has the potential to explode in India. Physicians and hospitals in India are already using telemedicine to diagnose and triage patients. Two-way video on a 4G platform will enable urban patients to avoid traffic and rural patients to consult remote specialists while making providers more productive with their time. Online shopping: E-commerce is growing at exponential rates in India. Amazon, Alibaba and venture capitalists have invested billions into Indian e-commerce. Over 90 % of India’s brick and mortar stores are tiny, single location shops (not part of chains or franchises). It is very likely that future top retailers in many categories will be e-commerce companies, not big-box chains. This will have a huge impact on foreign consumer product companies such as Colgate and PepsiCo eyeing the market in India as eCommerce reaches scale in India. Sharing economy:  There are significant opportunities in the emerging app-based eServices (similar to Uber and Airbnb). This segment is likely to expand even faster than e-trade in goods. Already, India has eServices for many things: kitchen cleaning, sprucing up the house, cleaning clothes, hiring a driver for your car for some hours (in Indian city traffic, it makes sense to hire someone to drive the car). With 4G, eServices space is poised for explosive growth. Media: Since liberalization in 1991, media of all kinds has grown rapidly in India, including newspapers, magazines, radio, television, and billboards. It is likely that this growth will be muted in the next decade as Indians turn to mobile media as the largest form of consumption. Social media in India including Facebook has been largely a mobile-led phenomenon. Recently, a Fortune 100 consumer product giant shifted its sales promotion strategy in India from coupons in newspapers to offers on mobile devices. Not just B2C companies, even B2B companies such as Rolls Royce and Deere, and technology companies such as Corning and GE better abandon marketing and communication using TV and newspaper channels and instead develop robust digital marketing strategies using mobile. These are just a few examples of industries where new business opportunities will be created in the next decade.  Startups and fast moving incumbents from anywhere in the world can take advantage of this unique “perfect storm” happening in India today. In fact, any business that previously required platforms for large data processing and transfer rates, but could not do them without the use of PC, can now easily do them with 4G mobile telephony. It is another internet revolution, yet again. The bottom line: 4G revolution is a fast train which companies must get on or they’ll be left behind.

Выбор редакции
22 декабря 2016, 13:29

Indian shares fall for seventh straight session

December 22 (Reuters) - Indian shares fell for a seventh consecutive session on Thursday, their longest losing streak in one-and-a-half years, as blue chips such as State Bank of India and Infosys Ltd continued to be hit by foreign selling.

19 декабря 2016, 17:02

Демонетизация – горе и плач индийского народа

Когда премьер-министр Индии 8 ноября 2016 года объявил о практически немедленном выводе из обращения банкнот в 500 и 1000 рупий, составлявших 86% всех наличных в стране, объясняя необходимость такого шага борьбой с коррупцией, терроризмом и незаконным получением доходов, значительная часть простых людей этой страны поддержала такой шаг. Они расценили его как удар, направленный против богатых и состоятельных слоев общества, которые правительство решило порастрясти. Однако, по мере развития процесса демонетизации, вызвавшего необходимость часами и днями стоять в бесконечных очередях в отделения банков и к банкоматам, чтобы снять со своих счетов хоть какие-то наличные, настроение населения стало заметно меняться. На смену первоначальной эйфории при сохраняющейся напряженности стало приходить отчаяние.Стало понятно, что богатые и состоятельные люди нашли обходные пути для сохранения своих средств. Если для простого человека проблема получить наличными даже разрешенные властями 24 тысячи рупий в неделю, так как у банков просто не хватает наличных, то богатые люди совершенно спокойно и без очередей избавились от старых бумажек и переложили свои сотни тысяч, миллионы и миллиарды рупий в новые банкноты. В то же время очереди в банки не стали меньше, и населению приходиться стоять днями, чтобы получить хоть что-то, чтобы можно было прожить.Всю Индию всколыхнуло фото плачущего 78-летнего ветерана, пропустившего свою очередь в банк, когда он пытался снять наличными тысячу рупий из своей восьмитысячной пенсии. Снимок вызвал бурную реакцию, и масса людей откликнулась, чтобы помочь старику. Тот отказался: «Мне не нужны подаяния и чужие деньги. Отдайте мне мои». В этом случае все более-менее обошлось, но стоящие днями в бесконечных очередях под палящим солнцем изнервничавшиеся люди еще и умирают. Чаще всего после нескольких часов, а то и дней бесплодного стояния в очередях в банк не выдерживает сердце. Таких прямых жертв демонетизации уже насчитывается более сотни. Один умер на третий день бесплодного восьмичасового стояния в очереди, пытаясь внести на свой счет все имевшиеся у семьи сбережения в 48 тысяч рупий, другой – после шестичасового ожидания в надежде снять хоть что-то из имевшихся на счете 6 тысяч, поскольку иначе его семья была бы вынуждена голодать.Другую группу жертв составляют самоубийцы. Не имея возможности снять в банках достаточных сумм наличных, иногда не превышающих 10 тысяч рупий, особенно в сельской местности, крестьяне под угрозой остракизма со стороны односельчан предпочитают накладывать на себя руки. И сколько таких пострадавших сказать невозможно. Ведь они умерли где-то в других местах, а не в очереди в банк. Раньше в таких случаях, если у фермера был кредит в банке, то банк после смерти должника обычно полностью списывал его. Теперь же в результате демонетизации, когда население оказалось вынужденным внести практически все имевшиеся у них средства на банковские счета, ситуация изменилась. Долги, покончивших с собой крестьян, списывают со счетов их жен, оставляя тех не только без кормильцев, но зачастую и без средств к существованию.Однако не стоит думать, что абсолютно все банкиры и банковские служащие бездушные грабители трудового народа. Они тоже люди, и устроенная властями вакханалия сказывается и на них. Вопрос заключается лишь в том, насколько и как долго они способны выдерживать этот стресс. Некоторые уже начали не выдерживать. Так уже покончил с собой тридцатитрехлетний кассир State Bank of India, проработавший на своей должности полтора года. Психологическое давление оказалось для него слишком велико.Если бы индийские власти не стали бы устраивать эту внезапную демонетизацию, то не было бы и этих смертей. Тем временем правительство, неудовлетворенное достигнутыми результатами, объявило об открытии особого почтового ящика, куда граждане страны смогут сообщать налоговым органам о различных незаконных расчетах, а также о подозрительной финансовой активности своих знакомых, коллег и соседей. Власти обещают, что налоговики будут быстро реагировать на такие наводки. Похоже, что в результате таких действий число жертв демонетизации и количество напрямую связанных с ней смертей в Индии будет только расти. Но что такое какая-то чужая человеческая жизнь для настоящих революционеров? Особенно, когда они стремятся изъять сбережения населения. Об этом стоит помнить, поскольку Индия – это всего лишь полигон, на котором обкатываются эти методы для их последующего тиражирования.Мои книжки «Крах «денег» или как защитить сбережения в условиях кризиса», «Золото. Гражданин или государство, свобода или демократия», «Занимательная экономика»,«Деньги смутных времен. Древняя история», «Деньги смутных времен. Московия, Россия и ее соседи в XV – XVIII веках» можно прочитать или скачать по адресу http://www.proza.ru/avtor/mitra396

18 декабря 2016, 18:31

India's money shortage, by Scott Sumner

Both old monetarists and market monetarists like to describe recessions in terms of a "shortage of money", caused by either a drop in the money supply or an increase in money demand. In this view, the focus is on money as a medium of exchange. I've always been uncomfortable with that framing, as I don't think the term 'shortage' accurately describes the problem. Rent controls and prices controls on gasoline lead to huge queuing problems. In contrast, there are usually no lines at ATMs, even at the worst points of a recession. Interest rates adjust until money supply equals money demand. In my view, it's more useful to think of the problem as an increase in the value of money. My focus is on money as a medium of account. I don't want to overstate these differences, as we both believe the problem is caused by either a decrease in money supply or and increase in money demand, and we both believe that the effects are higher unemployment, and monopolistically competitive firms having more difficulty finding customers at their current (sticky) prices. (Most firms are monopolistically competitive---having some pricing power, but also facing competition from similar firms.) I thought of this difference when reading about India's recent demonetization of 500 and 1000 rupee notes (about $7.50 and $15 in value), which form the bulk of the currency stock in India: The Reserve Bank of India (RBI), the central bank, has been unable to print money anywhere near fast enough to replace the $207bn in 500- and 1,000-rupee notes that were outlawed overnight on November 8th. Unless India's four existing money presses can be speeded up, or bills quickly imported, experts reckon it could take five or six months before the money removed from circulation is fully replaced. According to J.P. Morgan, an investment bank, Indians were making do at the end of November with a little more than a quarter of the cash that had been in circulation at the beginning of the month--and this in a country where cash represented 98% of all transactions by volume and 68% by value. The RBI has in effect been forced to ration new cash, most in the form of 2,000-rupee notes that are, owing to the lack of 1,000s and 500s, exceedingly difficult to break for change. FWIW, I do not think it will take 5 or 6 months to replace the money (these early official estimates are usually too pessimistic in this sort of situation.). But even if it takes 3 or 4 months, it's big problem for the Indian economy: Small wonder that Fitch, a ratings agency, on November 29th cut its forecast for India's GDP growth for the year to March 2017 from 7.4% to 6.9%. That is in line with most financial institutions' trimmed estimates, although some economists think the damage could be even worse. "There will be no or negative growth for the next two quarters," predicts one Delhi economist who prefers anonymity. "Consumer spending was the one thing really driving this economy, and now we are looking at a negative wealth-effect where people feel poorer and spend less." In my view, this is the sort of monetary shock that is correctly described as a "shortage" of money. In some ways it's even worse than an ordinary garden-variety recession. At least Americans were able to get cash in 2009. But in other respects it less severe, as it's expected to be a temporary monetary shock. It would not surprise me at all if the Indian economy almost immediately returned to full employment after the cash shortage ended. In contrast, employment often takes years to recover from severe monetary shocks that raise the value of the medium of account. (RGDP in India may take a bit longer to recover, for various reasons.) I think of the Indian crisis as the combination of two shocks, a very mild "medium of account shock" and a very severe "medium of exchange shock". The medium of account shock is mild because it's expected to last for just a few months. So then why did this shock take about 5% off the Indian stock market? Perhaps because there is a tail risk that this will backfire politically, and weaken the Modi government: Perhaps more embarrassingly for Mr Modi's government, there are few signs that its harsh economic medicine is achieving the declared goal of flushing out vast hoards of undeclared wealth or "black" money. Officials had predicted that perhaps 20% of the pre-ban cash would not be deposited in banks, for fear of disclosure to the taxman. Yet within three weeks of the "demonetisation"--well before the deadline to dispose of old bills, December 30th--about two-thirds of the money had already found its way into "white" channels. . . . In another country, such a fiasco would spell disaster for the government in power. Particularly so, one would think, for a party that sailed into office on promises to boost growth, provide jobs and encourage investment. Mr Modi's opponents have blasted his policy as obtuse, destructive and downright criminal; some insinuate that his Bharatiya Janata Party (BJP) was tipped off about the ban. Opposition parties have held rallies and marches across the country and brought India's parliament to a standstill with demands for a vote on the ban, and for Mr Modi himself to debate its merits, to no avail so far. Like the recent Brexit vote, this is a sort of natural experiment, from which we may learn a bit more about business cycles. It will be interesting to watch if and how the current Indian slowdown differs from more conventional tight money recessions. One difference already seems apparent; the action seems to have depreciated the rupee in foreign exchange markets: The Indian government's decision to scrap high denomination notes in order to crack down on counterfeiting and money laundering has had the unintentional effect of weakening the Rupee. On the GBP/INR price chart there is a clear spike on November 9 and 10 after the Indian government surprised markets by announcing out of the blue that it was excluding 500 and 1000 Rupee notes from legal tender. Keep in mind, however, that just as we saw after the Trump victory, immediate market reactions can be misleading. PS. Larry White has an excellent post on this issue, discussing lots of the side effects produced by this policy experiment. (4 COMMENTS)

15 декабря 2016, 15:06

India's Botched War On Cash

India is in the throes of an unprecedented social experiment in enforced digital disruption, and the world has much to learn from it. Prime Minister Narendra Modi launched a surprise in early November, demonetizing 500 and 1,000 rupee bank notes. Modi's war on cash is not without international precedent: Singapore, for example, withdrew its largest currency recently; the European Central Bank eliminated the 500-euro bank note; South Korea plans to eliminate at least all coins by 2020. And yet India's initiative had the potential for chaos. Here's why: the government effectively took 86% of cash out of circulation in an economy that is close to 90% cash-reliant. One of Modi's strongest motivations for this action was corruption -- to expose undeclared "black" money, i.e. income illegally obtained or not declared for tax purposes, in Asia's third-largest economy. But the government may have failed in meeting this objective. As of December 3, about 82% of the demonetized bills, amounting to about $185 billion, had been deposited in bank accounts and validated (or legitimized after any additional taxes owed are accounted for), according to a Bloomberg report. In other words, very little of the estimated $2 trillion black money estimated to be stashed overseas has been captured. In the meantime, retail and wholesale markets have stalled around the country. Supply chain transactions, real estate deals, and even weddings and funerals have been frozen. Consumers are coping with lines that are frustrating even for Indians used to standing in lines or waiting for basic services. People up and down the income spectrum are dealing with changing cash withdrawal policies and empty ATMs. The nation's status as the world's fastest-growing big economy has been severely imperiled and its currency risks being further devalued, a situation made worse by prospects of a strengthening dollar after the U.S. election. Sounds bad, right? But there is a question that hasn't been asked: Is there a digital upside to this crisis? A digital idealist might argue that the demonetization move is a welcome shock necessary to get a cash-intensive society weaned off its addiction and onto modern systems of digital payments. Indeed, since the chaos erupted, the prime minister has tweeted: "Time has come for everyone, particularly my young friends, to embrace e-banking, mobile banking & more such technology." He has urged the other side of the market to digitize as well: "I want to tell my small merchant brothers and sisters, this is the chance for you to enter the digital world," he said in Hindi on television, encouraging mobile banking applications and credit-card swipe machines. This is an unusual form of digital disruption of an enforced kind, about as far as one can get from the textbook kind. Consider a few of its most salient aspects: This drastic shift affects the world's fastest growing large economy, a population of 1.25 billion, and consumers whom we have identified as bearers of some of the highest "cost of cash" in the world (see our HBR article: "The Countries that Would Profit the Most from a Cashless World"). In other words, if a significant amount of the country's payments were digitized, the benefits would be monumental. This disruption originates not from one of the e-wallet insurgents or from one of the global payments mega-players, but has been engineered top-down by the government. The biggest beneficiaries of this disruption, arguably, would be the incumbents, i.e. Reserve Bank of India, India's central bank, and the banking institutions. According to our study, the Cost of Cash in India, these institutions spend3.5 billion annually in currency operations costs. Ironically, the primary losers in this disruption, at least in the near term, are the consumers themselves. The disruptive action did not originate in a small segment of the market; it was launched nationwide. The burden has been regressive, as it has been hardest on the poor and the unbanked, who have had to forgo wages to stand in lines or have lost jobs because of non-functioning markets. So can the demonetization shock push digital payments into the mainstream? Some early reports are suggesting that, indeed, it has had an effect. The leading digital payments players have experienced a bump since the demonetization experiment began. That said, it is important to keep in mind that this bump builds on a low base. According to a 2013 Mastercard study, India was in the "Inception" category of both absolute level of cashlessness and the trajectory of change. Furthermore, there are three fundamental structural factors to be mindful of as we understand the Indian context: India's ties to cash are strong, even by developing country standards. India uses a lot of cash by any measure. Our Cost of Cash in India study found a remarkably high level of cash usage even when compared with other emerging markets and otherwise digitally under-evolved countries, according to our Digital Evolution Index, reported earlier in HBR. The ratio of money held in bills and coins to the amount held in demand deposit and savings accounts in India was 51%, as compared to Egypt (29.3%), South Africa (8.9%), and Mexico (8.7%). Moreover, the value of notes and coins in circulation as a percentage of GDP in India was 12.04%, compared to 3.93% in Brazil, 5.32% in Mexico, and 3.72% in South Africa. There are strong reasons underlying this degree of cash reliance. Consider some of the most significant ones we found when we analyzed the 2014 landscape. Most Indians lacked the means to use non-cash payments, even if they want to. India's infrastructure for payments was growing, but from very modest beginnings. Fewer than 35% of Indians above the age of 15 had used a bank account. Less than 10% had ever used any kind of non-cash payment instrument. Less than 3% of the value transacted used cards in the year ending March 2014. The growth in value of ATM transactions had far outpaced the growth in the value of card payment transactions. Moreover, in India, the total value of ATM transactions increased more than five times between 2007 and 2012, from about 3 trillion to about 18 trillion rupees, while the value of card transactions barely doubled in the same period from 1 to 2 trillion rupees. Despite the improvement in telecommunications, India lagged its peers in mobile payments. Fewer than 2% of Indians had used a mobile phone to receive a payment, compared to over 60% of Kenyans and 11% of Nigerians. Financial inclusion policies are bank-led rather than telecom-led. Much of India's recent approach has focused on the supply side of financial inclusion. The priorities of the Reserve Bank (RBI), India's central bank, are to promote safe, efficient, accessible, inclusive, interoperable, and robust payment systems. India has addressed these priorities both through the creation of national champions, such as the National Payments Corporation of India (NPCI) and its subsidiaries. The result is that India has built the capacity to clear and settle payments. Access to that infrastructure on a sustainable and profitable basis is a key reason behind India's investment in universal identification (known as Aadhaar)-enabled payments services. The problem is that RBI chose a bank-led model over a telecoms-led one to achieve its financial inclusion goals. As a result, telecoms firms had only recently been allowed to enter the payments space in India, and were limited only to partnerships with banks. Compare this situation to that of Kenya, for example, where a surge in mobile payments has been engineered by the efforts of Safaricom, the major telecom company. The net result of a bank-led approach has been an insufficient investment in the necessary digital infrastructure and inadequate marketing of its potential uses and benefits. Consumers have been left unaware of how they might use mobile phones for services other than communications, texting, or Facebook. The costs of cash to the Indian consumer are among the highest in the world. In our analyses of the cost of cash across over 70 countries, we found that the cost of cash to consumers -- in terms of time spent to get cash and fees -- are high in some of the world's most populous countries. Unsurprisingly, cost to Indian consumers was among the highest. When weighted for population, India fared poorly in terms of ATM access compared to even lesser-developed countries, such as Kenya, Nigeria, or Egypt. Moreover, smaller cities in India had larger problems. Long before the current crisis, we found that residents of Delhi spent 6 million hours and $1.5 million to obtain cash, while residents of Hyderabad spent 1.7 million hours and $0.5 million to do the same. Hyderabadi consumer costs were about twice as high as that of Delhiites on a per capita basis. With this structural understanding in mind, how do we evaluate the potential impact of the demonetization move in getting digital payments past a tipping point? I would argue that, despite the high costs of cash, telling people -- as the prime minister did -- to go cashless is putting the cart before the horse. The horse in this case is the digital infrastructure and establishing a threshold of trust in the system; beefing up this digital ecosystem should come first. India's digital state (it ranked 42nd out of the 50 countries we studied in our Digital Evolution Index), does not engender the threshold of trust needed for cashlessness to take hold in a meaningful way. Despite a billion mobile phone subscriptions, just about 30% of Indian subscribers use smartphones. A little over a third of the population has internet access. India lacks infrastructure needed to reliably expand access. Connections are patchy and unreliable and there is great disparity in connectivity: 70% of those with mobile internet access are in cities; only 17% of Indian women use the internet, according to the Pew Research Center. With women responsible for much of household purchases, this does not provide a strong foundation for the spread of digital payments where it really counts. According to Google India and The Boston Consulting Group, by 2020, digital transactions will happen at 10 times the current level. That may well come to pass; maybe demonetization may serve as the needed catalyst. But let us be clear: in the absence of a systematic and concerted investment in digital infrastructure and Internet access, cash will stubbornly resist wholesale digital displacement. It is useful to keep in mind that any form of currency, cold hard cash or digital, involves an "equilibrium mindset" -- a mutually self-reinforcing logic -- whereby the parties across a transaction must share a belief in the currency and trust that it works and holds value. If there is a shadow of doubt that affects one party's trust in a particular form of currency, the other will prefer to not rely on it. Cash, unlike digital alternatives, has the benefit of being acceptable (almost) everywhere. If there is concern about the viability or acceptability of digital payments, venturing forth without cash will make consumers feel insecure. When we studied current habits in India, in the Cost of Cash in India, we found that there is great level of comfort in keeping moderate to significant levels of cash in hand, especially in small towns and rural areas. Even credit card users keep significant amounts of cash in hand, and they keep higher balances. The proportion of respondents who keep more than 2,000 rupees as minimum cash in hand is 29% in case of credit card users, as compared to 12% in case of cash-only users. The average amount of minimum cash carried by cash-only users or "debit cash and cash" users is relatively lower than the amount carried by credit card users. The proportion that carried minimum cash in the range of 100-500 rupees was 13% among credit card users, as compared to 27% among the cash users. What seems like a major push from physical to digital money will, in reality, happen at a slow pace. While I do not intend to demonize the demonetizers, this unfortunate crisis is a case study in poor policy and even poorer execution. Unfortunately, it is also the poor that bear the greatest burden. Bhaskar Chakravorti is the Senior Associate Dean of International Business & Finance at The Fletcher School at Tufts University and founding Executive Director of Fletcher's Institute for Business in the Global Context. He is the author of The Slow Pace of Fast Change. This article first appeared in the Harvard Business Review. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

14 декабря 2016, 13:05

India’s Botched War on Cash

India is in the throes of an unprecedented social experiment in enforced digital disruption, and the world has much to learn from it. Prime Minister Narendra Modi launched a surprise in early November, demonetizing 500 and 1,000 rupee bank notes. Modi’s war on cash is not without international precedent: Singapore, for example, withdrew its largest currency recently; the European Central Bank eliminated the 500-euro bank note; South Korea plans to eliminate at least all coins by 2020. And yet India’s initiative had the potential for chaos. Here’s why: the government effectively took 86% of cash out of circulation in an economy that is close to 90% cash-reliant. One of Modi’s strongest motivations for this action was corruption — to expose undeclared “black” money, i.e. income illegally obtained or not declared for tax purposes, in Asia’s third-largest economy. But the government seems to have failed in meeting this objective. As of December 3, about 82% of the demonetized bills, amounting to about $185 billion, had been deposited in bank accounts and validated to be legitimately earned money. In other words, very little of the estimated $2 trillion black money estimated to be stashed overseas has been captured. In the meantime, retail and wholesale markets have stalled around the country. Supply chain transactions, real estate deals, and even weddings and funerals have been frozen. Consumers are coping with lines that are frustrating even for Indians used to standing in lines or waiting for basic services. People up and down the income spectrum are dealing with changing cash withdrawal policies and empty ATMs. The nation’s status as the world’s fastest-growing big economy has been severely imperiled and its currency risks being further devalued, a situation made worse by prospects of a strengthening dollar after the U.S. election. Sounds bad, right? But there is a question that hasn’t been asked: Is there a digital upside to this crisis? A digital idealist might argue that the demonetization move is a welcome shock necessary to get a cash-intensive society weaned off its addiction and onto modern systems of digital payments. Indeed, since the chaos erupted, the prime minister has tweeted: “Time has come for everyone, particularly my young friends, to embrace e-banking, mobile banking & more such technology.” He has urged the other side of the market to digitize as well: “I want to tell my small merchant brothers and sisters, this is the chance for you to enter the digital world,” he said in Hindi on television, encouraging mobile banking applications and credit-card swipe machines. This is an unusual form of digital disruption of an enforced kind, about as far as one can get from the textbook kind. Consider a few of its most salient aspects: This drastic shift affects the world’s fastest growing large economy, a population of 1.25 billion, and consumers whom we have identified as bearers of some of the highest “cost of cash” in the world (see our HBR article: “The Countries that Would Profit the Most from a Cashless World”). In other words, if a significant amount of the country’s payments were digitized, the benefits would be monumental. This disruption originates not from one of the e-wallet insurgents or from one of the global payments mega-players, but has been engineered top-down by the government. The biggest beneficiaries of this disruption, arguably, would be the incumbents, i.e. Reserve Bank of India, India’s central bank, and the banking institutions. According to our study, the Cost of Cash in India, these institutions spend $3.5 billion annually in currency operations costs. Ironically, the primary losers in this disruption, at least in the near term, are the consumers themselves. The disruptive action did not originate in a small segment of the market; it was launched nationwide. The burden has been regressive, as it has been hardest on the poor and the unbanked, who have had to forgo wages to stand in lines or have lost jobs because of non-functioning markets. So can the demonetization shock push digital payments into the mainstream? Some early reports are suggesting that, indeed, it has had an effect. The leading digital payments players have experienced a bump since the demonetization experiment began. That said, it is important to keep in mind that this bump builds on a low base. According to a 2013 Mastercard study, India was in the “Inception” category of both absolute level of cashlessness and the trajectory of change. Furthermore, there are three fundamental structural factors to be mindful of as we understand the Indian context: India’s ties to cash are strong, even by developing country standards. India uses a lot of cash by any measure. Our Cost of Cash in India study found a remarkably high level of cash usage even when compared with other emerging markets and otherwise digitally under-evolved countries, according to our Digital Evolution Index, reported earlier in HBR. The ratio of money held in bills and coins to the amount held in demand deposit and savings accounts in India was 51%, as compared to Egypt (29.3%), South Africa (8.9%), and Mexico (8.7%). Moreover, the value of notes and coins in circulation as a percentage of GDP in India was 12.04%, compared to 3.93% in Brazil, 5.32% in Mexico, and 3.72% in South Africa. There are strong reasons underlying this degree of cash reliance. Consider some of the most significant ones we found when we analyzed the 2014 landscape. Most Indians lacked the means to use non-cash payments, even if they want to. India’s infrastructure for payments was growing, but from very modest beginnings. Fewer than 35% of Indians above the age of 15 had used a bank account. Less than 10% had ever used any kind of non-cash payment instrument. Less than 3% of the value transacted used cards in the year ending March 2014. The growth in value of ATM transactions had far outpaced the growth in the value of card payment transactions. Moreover, in India, the total value of ATM transactions increased more than five times between 2007 and 2012, from about 3 trillion to about 18 trillion rupees, while the value of card transactions barely doubled in the same period from 1 to 2 trillion rupees. Despite the improvement in telecommunications, India lagged its peers in mobile payments. Fewer than 2% of Indians had used a mobile phone to receive a payment, compared to over 60% of Kenyans and 11% of Nigerians. Financial inclusion policies are bank-led rather than telecom-led. Much of India’s recent approach has focused on the supply side of financial inclusion. The priorities of the Reserve Bank (RBI), India’s central bank, are to promote safe, efficient, accessible, inclusive, interoperable, and robust payment systems. India has addressed these priorities both through the creation of national champions, such as the National Payments Corporation of India (NPCI) and its subsidiaries. The result is that India has built the capacity to clear and settle payments. Access to that infrastructure on a sustainable and profitable basis is a key reason behind India’s investment in universal identification (known as Aadhaar)-enabled payments services. The problem is that RBI chose a bank-led model over a telecoms-led one to achieve its financial inclusion goals. As a result, telecoms firms had only recently been allowed to enter the payments space in India, and were limited only to partnerships with banks. Compare this situation to that of Kenya, for example, where a surge in mobile payments has been engineered by the efforts of Safaricom, the major telecom company. The net result of a bank-led approach has been an insufficient investment in the necessary digital infrastructure and inadequate marketing of its potential uses and benefits. Consumers have been left unaware of how they might use mobile phones for services other than communications, texting, or Facebook. The costs of cash to the Indian consumer are among the highest in the world. In our analyses of the cost of cash across over 70 countries, we found that the cost of cash to consumers – in terms of time spent to get cash and fees — are high in some of the world’s most populous countries. Unsurprisingly, cost to Indian consumers was among the highest. When weighted for population, India fared poorly in terms of ATM access compared to even lesser-developed countries, such as Kenya, Nigeria, or Egypt. Moreover, smaller cities in India had larger problems. Long before the current crisis, we found that residents of Delhi spent 6 million hours and $1.5 million to obtain cash, while residents of Hyderabad spent 1.7 million hours and $0.5 million to do the same. Hyderabadi consumer costs were about twice as high as that of Delhiites on a per capita basis. With this structural understanding in mind, how do we evaluate the potential impact of the demonetization move in getting digital payments past a tipping point? I would argue that, despite the high costs of cash, telling people – as the prime minister did — to go cashless is putting the cart before the horse. The horse in this case is the digital infrastructure and establishing a threshold of trust in the system; beefing up this digital ecosystem should come first. India’s digital state (it ranked 42nd out of the 50 countries we studied in our Digital Evolution Index), does not engender the threshold of trust needed for cashlessness to take hold in a meaningful way. Despite a billion mobile phone subscriptions, just about 30% of Indian subscribers use smartphones. A little over a third of the population has internet access. India lacks infrastructure needed to reliably expand access. Connections are patchy and unreliable and there is great disparity in connectivity: 70% of those with mobile internet access are in cities; only 17% of Indian women use the internet, according to the Pew Research Center. With women responsible for much of household purchases, this does not provide a strong foundation for the spread of digital payments where it really counts. According to Google India and The Boston Consulting Group, by 2020, digital transactions will happen at 10 times the current level. That may well come to pass; maybe demonetization may serve as the needed catalyst. But let us be clear: in the absence of a systematic and concerted investment in digital infrastructure and Internet access, cash will stubbornly resist wholesale digital displacement. It is useful to keep in mind that any form of currency, cold hard cash or digital, involves an “equilibrium mindset”  — a mutually self-reinforcing logic — whereby the parties across a transaction must share a belief in the currency and trust that it works and holds value. If there is a shadow of doubt that affects one party’s trust in a particular form of currency, the other will prefer to not rely on it. Cash, unlike digital alternatives, has the benefit of being acceptable (almost) everywhere. If there is concern about the viability or acceptability of digital payments, venturing forth without cash will make consumers feel insecure. When we studied current habits in India, in the Cost of Cash in India, we found that there is great level of comfort in keeping moderate to significant levels of cash in hand, especially in small towns and rural areas. Even credit card users keep significant amounts of cash in hand, and they keep higher balances. The proportion of respondents who keep more than 2,000 rupees as minimum cash in hand is 29% in case of credit card users, as compared to 12% in case of cash-only users. The average amount of minimum cash carried by cash-only users or “debit cash and cash” users is relatively lower than the amount carried by credit card users. The proportion that carried minimum cash in the range of 100 – 500 rupees was 13% among credit card users, as compared to 27% among the cash users. What seems like a major push from physical to digital money will, in reality, happen at a slow pace. While I do not intend to demonize the demonetizers, this unfortunate crisis is a case study in poor policy and even poorer execution. Unfortunately, it is also the poor that bear the greatest burden.

09 декабря 2016, 23:32

What Lies Ahead for India ETFs?

India ETFs were hit by the double whammy of demonetization and Donald Trump's victory.

09 декабря 2016, 09:36

Indian shares edge up; on track for best weekly gain since Sept

Dec 9 (Reuters) - Indian shares rose slightly on Friday, heading for their biggest weekly gain in more than three months, as additional stimulus from the European Central Bank helped offset disappointment about the Reserve Bank of India's decision to hold rates.

07 декабря 2016, 15:10

India's Central Bank Surprises by Holding Rates; Cuts Growth Outlook

The Reserve Bank of India left its main interest rate unchanged, even as a cash crunch grips Asia’s third-largest economy, but slashed its growth forecast.

07 декабря 2016, 14:20

India's central bank says cash crisis is hurting the economy

The Reserve Bank of India acknowledged Wednesday that the country's ongoing cash crunch is hurting the economy.

07 декабря 2016, 13:53

India's RBI Maintains Interest Rates Despite $170 Billion Deposited In Banks Under Demonetisation

There is also another way that we can write that headline, which is that the Reserve Bank of India today decided not to lower interest rates as a result of the $170 billion in old rupee notes deposited into banks as a result of the demonetisation program. This is a [...]

29 ноября 2016, 16:19

Наличные – это для преступников

Именно этот лозунг начали массово тиражировать средства массовой (дез)информации Австралии, после того как ряд австралийских отделений местного филиала американского Citibank-а объявили о полном прекращении работы с наличными. Лозунг этот чем-то созвучен с другим, появившимся на Украине несколько лет назад и звучавшим немного иначе: «Кто не скачет, тот – москаль». Могу ошибаться, но складывается впечатление, что оба вышли то ли из-под пера одного человека, то ли одного «аналитического» центра.На другом конце света – в Греции – банки предложили, естественно исключительно ради благой цели борьбы с черным рынком, в качестве одной из мер введение специального налога на снятие наличных. Другие меры включают в себя обязательные безналичные расчеты в отраслях, замеченных в широкомасштабном уклонении от уплаты налогов; при проведении расчетов, превышающих определенную сумму; обязательную выплату заработной платы исключительно безналичным путем и некоторые другие. Это целый комплекс мер, направленный на то, чтобы все расчеты за товары и услуги были переведены в полностью безналичную форму, население окончательно потеряло какие-либо остатки личной свободы, государство могло контролировать каждую операцию по получению и расходованию средств граждан, а банки – списывать с каждой такой операции свою комиссию.Собственно это в конечном итоге признал и премьер-министр Индии, сказав, что вся развернутая в стране борьба с наличными банкнотами в 500 и 1000 рупий, составлявшими 86% всех наличных, направлена исключительно на то, чтобы перевести страну на полностью безналичные расчеты. Правительство направило в провинции специальную команду бюрократов для оценки процесса демонетизации на местах. Согласно их отчету, демонетизация встретила «массовую поддержку населения, но вот с ее внедрением не все идет гладко». Падение доходов в розничной торговле и строительстве, по их оценке, за несколько дней составило 30%. Население так активно «поддерживает» борьбу властей с «черным» налом, что отправленные на места чиновники рекомендовали центральному правительству предпринять широкомасштабные пропагандистские кампании для того, чтобы население прочувствовало всю выгоду от безналичных расчетов.Вероятно к небольшим проблемам, в частности, чиновники отнесли и два разгромленных разъяренными клиентами отделения Государственного банка Индии (State Bank of India (SBI)) в городе Манипуре. Проблемы начались, когда два клиента отделения банка в университете Манипура попытались снять наличными по 24 тысячи рупий. Это максимальная недельная сумма, которую можно было снять со счета после демонетизации. Руководители отделения заявили им, что это слишком большая сумма, и они не могут снять более 2 тысяч рупий (эквивалент примерно 30 американских дензнаков). Стоявший неделями в очереди народ естественно воспринял это как чистой воды издевательство. Почувствовав настроение народа, представители банка заявили, что клиенты могут снять по 4 тысячи, но банк закроется немедленно, как только у него закончатся запасы наличности. Услышав это, стоявший в очереди народ начал громить банк.Для разгона погромщиков была вызвана предназначенная для разгона беспорядков полиция. Один полицейский в результате столкновения пострадал. Стоит отметить, что подобные стычки стоящих в очередях за своими собственными средствами людей и полиции стали довольно частым явлением, причем полицейские при этих столкновениях зачастую предпочитают разбегаться сами.Другие «мелкие» проблемы демонетизации заключаются в резком всплеске киберпреступности, включая кибератаки на банкоматы. При этом речь идет не о десятках и сотнях блокированных карт клиентов ведущих индийских банков, а о миллионах. Среди пострадавших оказались, в частности, клиенты State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank и YES Bank-а. Один SBI заблокировал почти 600 тысяч скомпрометированных дебетовых карт, а это означало, что их владельцы, пока не решат свои проблемы с банком, не смогут воспользоваться ими ни для снятия наличных, ни для расчетов. Как говорится, добро пожаловать в безналичный мир!Современная обстановка и действия властей все более наглядно демонстрируют то, что они во все большей степени направлены на прямое ограбление населения по всему миру. Вдобавок к драконовским по своим размерам налогам и различным скрытым формам хищений сбережений граждан вроде отрицательных процентных ставок по остаткам на счетах и депозитам, инфляции и девальваций различных валют правительства различных стран во все большей степени стали прибегать к открытому грабежу. Первый эксперимент был осуществлен на Кипре, когда со всех сумм, превышавших определенную максимальную величину, власти конфисковали 40% средств. Затем последовала Греция, где за счет средств вкладчиков власти спасали стоящие на грани банкротства банки, а все население было вынуждено расплачиваться в результате урезания пенсий и пособий, а также введения налога на богатство. Теперь пришла очередь седьмой экономики мира и второму по численности населения государству – Индии. Если на Кипре живет примерно 1 миллион человек, то в Греции – 11 миллионов, а в Индии – уже 1,3 миллиарда. Соответственно растут и масштабы ущерба, наносимого правительствами соответствующих стран своим гражданам. Масштабы финансовых репрессий растут постепенно, но они уже непосредственно затронули 18% населения планеты. И если это еще не случилось в той или иной стране, то это не значит, что такое не может произойти сегодня или завтра. Финансовая война властей со своим населением обычно начинается внезапно, без какого-то предварительного объявления. Именно поэтому, если вы хотите сохранить свои сбережения, их стоит держать вне рамок современной финансово-банковской системы и не в тех инструментах, которые выпускают государства и центральные банки, и которые зависят от них. И наиболее надежными, исходя из этих соображений, сбережениями представляются вложения в наднациональные традиционные обеспеченные деньги – физическое золото и серебро. Есть лишь одна проблема. Храня свои сбережения в драгоценных металлах, современные средства массовой (дез)информации наверняка будут вскоре рассматривать их владельца как преступника. Это неудивительно. Ведь еще лет восемьдесят назад фюрер нацистской Германии отметил: «Золото в руках населения – это враг государства», а публикации современных официальных западных СМИ все больше напоминают геббельсовскую пропаганду.Мои книжки «Крах «денег» или как защитить сбережения в условиях кризиса», «Золото. Гражданин или государство, свобода или демократия», «Занимательная экономика»,«Деньги смутных времен. Древняя история», «Деньги смутных времен. Московия, Россия и ее соседи в XV – XVIII веках» можно прочитать или скачать по адресу http://www.proza.ru/avtor/mitra396

28 ноября 2016, 14:15

Большинство фондовых индексов АТР выросли в понедельник

Большинство фондовых индексов Азиатско-Тихоокеанского региона продемонстрировали положительную динамику в понедельник благодаря существенному росту китайских акций, но японский индекс Nikkei 225 снизился на фоне укрепления иены.

28 ноября 2016, 10:49

Большинство фондовых рынков Азии растут в понедельник

Фондовые индексы Азиатско-Тихоокеанского региона повышаются в понедельник благодаря существенному росту китайских акций, но японский индекс Nikkei 225 опускается на фоне укрепления иены.