Tag: SBI

The Reserve Bank of India (RBI) 2000 Rs note

No Forms, ID Card Needed To Exchange ₹2,000 Notes: SBI

By LokMarg

State Bank of India (SBI) customers will not be required to submit any ID cards or fill out any requisition forms to exchange their Rs 2000 currency notes. They however would be allowed to exchange a maximum of ten currency notes of Rs 2000 at a time, according to a communication shared by the SBI with all its circles.

SBI, in its communication with all the circles, also clarified its May 19 Annexure III – a requisition slip having dedicated columns for details of customer’s identity proof, now stands withdrawn with immediate effect.

“Please arrange accordingly and extend all cooperation to members of the public so that the exercise is conducted in a smooth and seamless manner without any inconvenience to the public,” SBI said in its communication.

The Reserve Bank of India (RBI) on Friday decided to withdraw the Rs 2000 denomination currency notes from circulation, but added they (currency notes) will continue to remain as legal tender.

RBI had advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect.

RBI, however, said that citizens will continue to be able to deposit Rs 2000 banknotes into their bank accounts and/or exchange them into banknotes of other denominations at any bank branch up to September 30, 2023.

The exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of Rs 20,000 at a time at any bank starting from May 23, 2023.

“It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public,” RBI said Friday.

The Rs 2000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time.

The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2000 banknotes was stopped subsequently in 2018-19, stated RBI.

About 89 per cent of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of four-five years.

The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as of March 31, 2018 (37.3 per cent of Notes in Circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of Notes in Circulation on March 31, 2023. (ANI)

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SBI Team Debunks Raghuram Assessment On Slowing Indian Growth

SBI Team Debunks Raghuram Assessment On Slowing Indian Growth

By LokMarg

The argument that India is going towards a ‘Hindu rate of growth’ is “ill-conceived, biased and pre-mature” when weighed against the respective data on savings and investments, said SBI Research in its Ecowrap report.

The term Hindu rate of growth was coined by economist Raj Krishna in 1978, which denoted the economic growth of about 3.5-4.0 per cent in terms of GDP during 1947-1980.

“India’s quarterly sequential Y-o-Y GDP growth has been in a declining trend in FY23. It has been argued in select quarters that India is going towards Raj Krishna coined rate of Growth (3.5-4 per cent) that predominated the growth in the period of 1947-1980. We find the argument ill-conceived, biased and pre-mature at its best when weighing the numbers against the data on savings and investments,” the Ecowrap report said.

The SBI Research report comes on the backdrop of former RBI governor Raghuram Rajan, having told media that economic growth of India was close to that of Raj Krishna coined term ‘Hindu rate of growth’.

Further, SBI Research argued institutional share of the Public and Private sectors in total Gross Capital Formation (GCF) has been nearly constant since FY12 at around 10 per cent and 34 per cent of GDP, respectively.

According to World Bank, the gross capital formation consists of investments on addition to the fixed assets of the economy plus net changes in the level of inventories.

Gross capital formation by the government touched a high of 11.8 per cent in 2021-22, up from 10.7 per cent in 2020-21. This, the SBI report said, also had a domino effect on private sector investment that jumped from 10 per cent to 10.8 per cent over the same period.

“In fact, the trends in GCF to gross output ratio or the plough back of funds for the creation of fresh capacity shows that for public administration the ration attained a fresh peak in 2021-22 owing to the emphasis on capital expenditure in recent budgets,” the report said.

Moreover, it argued that household savings in India increased sharply during the pandemic period on account of sharp accretion in financial savings such as deposits.

“While household financial savings have since then moderated from 15.4 per cent in 2020-21 to 11.1 per cent in 2022-23, savings in physical assets have grown sharply to 11.8 per cent in 2021-22 from 10.7 per cent in 2020-21.”

An analysis by SBI Research prima facie showed that the Incremental Capital Output Ratio (ICOR), which measures the additional units of capital investment needed to produce an additional unit of output, has been improving. ICOR which was 7.5 in FY12 is now only 3.5 in FY22, which essentially means only half of the capital is now needed for the next unit of output.

“Such reducing ICOR in the current years reflects a relative increasing efficiency of capital. The talk on ICOR becomes relevant shows that the economy is on a sound footing. It is also now clear that potential growth of Indian economy (a global phenomenon) is now lower than earlier. From that point of view, future GDP growth rates even at 7 per cent could still mean a decent number by any standards!” SBI Research’s report added. (ANI)

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