The phenomenon of Bitcoin has taken the financial world by storm. A form of currency, although it came into existence only in 2009, it has increased exponentially both in usage and value. It has been said that the value of Bitcoin has appreciated by a whopping 5,000% in less than a year. This form of currency has gained momentum in India as well, as this report in the Mint suggests. US Court...
FSLRC Report
The report of the Financial Sector Legislative Reforms Commission, which
has recommended elaborate reforms in the financial sector, is now available.
Volume
1 contains the findings and recommendations of the Commission, while Volume 2 contains a
draft of the proposed Indian Financial Code, 2013.
Black Money: Corporate Entities and Securities Markets
The Government yesterday tabled its White Paper on Black Money in Parliament. Billed as the first document to comprehensively tackle the issue, it cites various studies and is replete with data. However, it has already been subjected to criticism from various quarters owing to the lack of details and clarity in solutions to deal with the issue. This post, however, briefly touches upon the role of...
JP Morgan’s Trading Losses: Regulation and Governance
There has been a great deal of debate surrounding JP Morgan’s hedging losses announced last week. There is some mystery surrounding the nature of the transactions involved, without full clarity yet on the amount of losses. Andrew Ross Sorkin has a brief explanation of the episode in the New York Times: … Here’s an overly simplistic primer, but you’ll probably get the idea: The company’s...
Diaspora Bonds
The Economist has a piece that discusses the advantages of diaspora bonds to poor countries. It notes: The idea is simple. Poor-country governments can issue bonds and market them to emigrants in rich countries. There are several advantages to milking members of a diaspora. They are often patriotic: they like the idea that their savings will pay for bridges and clinics at home. They are patient...
Rating Agencies Back in the Spotlight
S&P has indeed made a bold move by downgrading United States’ sovereign rating. While there may by political opposition, quibbles with the arithmetic, and the like, there is a strong view that those amount to “shooting the messenger”. The downgrading by S&P assumes greater importance because it comes in the wake of determined efforts by governments to tighten their control over credit...
The New Microfinance Institutions Bill
Over the last year or so, there has been a serious debate about the nature of regulation governing the microfinance sector. In view of the debacle in Andhra Pradesh, the Reserve Bank of India (RBI) had appointed a committee under the chairmanship of Mr. Malegam to review issues pertaining to the sector. The committee submitted its report in January this year. In view of these events, the...
Infrastructure Development Fund
The Ministry of Finance has issued a press release that paves the way for setting up “Infrastructure Debt Funds (IDFs) in order to accelerate and enhance the flow of long term debt in infrastructure projects for funding the government’s ambitious programme of infrastructure development.” IDFs are envisaged to be suitable vehicles that enable raising debt to finance infrastructure projects...
Islamic Finance and the Indian Constitution
The concepts of Islamic banking and Islamic finance are yet to gain significant ground in India and attain the popularity they have witnessed in other countries. While there has been a debate about the need for a separate legal framework in India to promote the form of finance recognized under principles of Sharia law, the judiciary recently had the opportunity to test the validity of Islamic...
RBI Sub-Committee on Microfinance
With several legal and regulatory issues affecting the microfinance sector lately, more so in the state of Andhra Pradesh, the Reserve Bank of India (RBI) had appointed a sub-committee under the chairmanship of Mr. Y.H. Malegam to “study issues and concerns in the microfinance sector in so far as they related to the entities regulated by the [RBI]”. The keenly awaited report, which was expected...
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