Page 13 - Banking Finance October 017

RBI CORNER

RBI to regulate peer-to-peer platform HDFC as country 3rd

All peer-to-peer lending (P2P) platforms will be regulated by the Reserve Bank most critical finance body
of India, according to a government of India notification. The
gazette notification stated that all the P2P loan platforms will Recently, the HDFC Bank was added
be treated as non-banking financial companies (NBFCs) and will in the list of
be brought under the ambit of the banking regulator. Execu- systemati-
tive director at RBI Sudarshan Sen had said at a conference in cally impor-
Mumbai that the regulator was waiting for a gazette notifi- tant banks,
cation from the government specifying that the P2P loan platforms will fall un- or banks
der RBI's regulatory purview. that are considered too big to fail, by
the RBI. Other banks were SBI and
Did RBI back cryptocurrency ICICI Bank. Inclusion in this category
Reserve Bank of India's research arm, Institute for Development & Research in means that the bank would need to
Banking Technology (IDRBT), had released a report, which adhere to higher capital require-
said that the time is ripe for blockchain technology adoption ments. The positive side of being
in India. The report said that in a bid to evolve towards a recognised is that investors would
cashless society, this was an "appropriate time for initiating feel more secure in parking bulk
suitable efforts towards digitising the Indian rupee through funds in these institutions as they are
blockchain technology." too big to fail.
Recently, reports suggested that the RBI may be in the process of developing a HDFC Bank's total balance sheet size
central bank-backed cryptocurrency, or a crypto-rupee.The report said that it as of June 30, 2017 was Rs 8,95,653
might be named after the Indian goddess of wealth 'Lakshmi'. crores as against Rs 7,55,631 crores
In 2009, Bitcoin, the world's first cryptocurrency, was created by an anonymous as of June 30, 2016 , an increase of
developer. Coming in the wake of the global financial crisis, a time when confi- 33 %. The bank's deposits as of June
dence in government had hit rock bottom, early adopters of the instrument 30, 2017 were Rs 6,71,376 crore , an
looked at it as a viable replacement for conventional currencies. increase of 17 % over June 30, 2016.
The appeal of bitcoins lay in the fact that it is anonymous and decentralised and RBI's policy review meet
is built on the mysterious, promising technology called blockchain. Created using
cryptography, bitcoin runs on a secure, distributed ledger called the blockchain, on hold
which allows transactions to be recorded and verified by a public community. As per the RBI's perspective, the GDP
Bitcoin enthusiasts say the digital currency is an improvement on traditional so- data are dis-
called fiat currencies -- safe, decentralised and takes away the power of govern- appointing,
ments to print unlimited money. but the cur-
rent slow-
RBI sends 2nd list of large NPAs for to banks down is

RBI, Deputy Governor Viral Acharya said the insolvency code has changed "rules largely due to GST, which should be
of the game" and asked lenders to use it "extensively" for resolving the stress. seen as transitory as mentioned by
Nomura in a report, adding that the
"The Reserve Bank has now advised banks to resolve some of the other accounts
by December 2017; if banks fail to put in place a viable resolution plan within cash-intensive sectors like trade,
the timelines, these cases also will be referred for resolution under the Insol- transportation and construction are
vency and Bankruptcy Code (IBC)," he said here. Acharya, who was delivering rebounding. The apex bank is likely to
stay on hold in its policy review meet
the eighth R K Talwar Memorial lecture, however, did not disclose the number
of the accounts which have been referred. in October and instead focus on bank-
ing resolution and liquidity manage-
Media reports over the last week have been saying the RBI has given banks a ment, despite June quarter 'disap-
new list of 40 accounts, over and above the 12 large accounts which have been pointing' GDP data.
marked for resolution.

12 | 2017 | OCTOBER | BANKING FINANCE

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