India To Take A Considered View On Cryptocurrency: Nirmala Sitharaman

Considering cryptocurrencies can be widely misused, India will take a considerate decision on regulation around it without hurting innovation, Finance Minister Nirmala Sitharaman conveyed during an interaction at Stanford University.

“It will have to take its time…all of us to be sure that at least with a given available information, we’re taking the decern decision. It can’t be rushed through,” FM Sitharaman said pointing out that in absence of proper regulation cryptocurrencies can also be manipulated for money laundering or terror financing. 

“So, these are some of the concerns, not just India, but many countries of the world have and are also discussed in global, multilateral platforms.”

Noting that the government is open to innovation, she said, “So, our intention is in no way to hurt this (innovation around crypto)…but (we need to) define for ourselves…” 

India is planning to introduce central bank-backed digital currency or Central Bank Digital Currency (CBDC). Announcing the same in her budget speech, the finance minister had said, “The digital rupee or CBDC would be issued by the RBI in the coming fiscal year.”

A 30% tax will be levied on gains made from any other private digital assets from April 1, she also announced. 

HDFC merger:

On the merger of HDFC and HDFC Bank, Sitharaman said, it is a good step because India needs a lot more big banks to take care of growing needs for infra financing.

Earlier this month, India’s largest private lender HDFC Bank agreed to take over the biggest domestic mortgage lender in a deal valued at about USD 40 billion, creating a financial services titan in the largest deal in the country’s corporate history.

The proposed entity will have a combined asset base of around 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

The transaction involves the amalgamation of HDFC and its two wholly-owned subsidiaries HDFC Holdings and HDFC Investments with HDFC Bank.

(With inputs from agencies)


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What Did RBI Governor And FM Sitharaman Say On Cryptocurrency Today? Read Here

New Delhi: In a press conference today, RBI Governor Shaktikanta Das and Finance Minister Nirmala Sitharaman said that the government and RBI are discussing the cryptocurrency matter internally and there is complete harmony between them. Das also cleared the air around Monetary Policy Committee’s inflation projections. He was addressing a press conference after the central board meeting.Also Read – LIC IPO: What We Know So Far

On cryptocurrency, FM Sitharaman said, “With RBI & Ministry, not just on crypto but on every other thing as well, I think there’s complete harmony with which we’re working, respecting each other’s domain also knowing what we’ve to do with each other’s priorities & in interest of the nation. There’s no turfing here.” Also Read – When Will RBI Launch Digital Rupee And How Will it be Different From Normal Currency? Shaktikanta Das Answers FAQs

Also Read – RBI Leaves Repo Rate Unchanged at 4%, Projects Real GDP Growth at 7.8% FY 2022-23 | 10 Points

Das added, “Like several other issues, this particular issue is internally under discussion b/w RBI & Govt. Whatever points we have, we discussed with Govt. Beyond that I think I will not like to further elaborate.”

‘Inflation On A Downward Slope’

Since Thursday, various media reports have emerged that have questioned the MPC’s stance to keep the interest rates unchanged and decrease the inflation projection for the next year amidst rising crude oil prices and geopolitical tensions.

The RBI projected an inflation rate of 4.5 per cent for the year 2022-23. The repo rate has been kept unchanged since May 2020 at 4 per cent. On the other hand, the crude oil prices touched $95 per barrel on Monday.

Das, however, was confident about the projections. “As far as India is concerned, if you look at the momentum of inflation right from last October onward, it is on a downward slope. It’s primarily the statistical reasons, the base effect, which has resulted in higher inflation especially in Q3”, he said.

He further stated that RBI has taken inflation into account before calculating the projection. He added, “The same base effect will play in different ways in the coming months. Today’s inflation print is expected to be close to 6%. That should not surprise or create any alarm because we have taken that into consideration.”

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