IPCC Synthesis Report

IPCC’s Synthesis Report released in Copenhagen on Sunday reiterates that human activities are having an “unequivocal” and “irreversible” warming effect on the Earth’s climate system.

What is the Synthesis Report?

It is the fourth and final installment of the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). It is described as the most comprehensive assessment of climate change ever made. The other three reports came out over 14 months starting Sept 2013. It seeks  to goad governments and policymakers to act urgently on climate change. IPCC’s Assessment Reports have produced increasingly strong evidence that human influences are altering natural variations in the climate system, which can have catastrophic effects on Earth and all life systems. The fourth AR won IPCC the 2007 Nobel Peace Prize.

What does the Synthesis Report say?

Reiterates what IPCC has said over the last two decades, but with greater confidence, with backing of stronger scientific evidence. Essentially, that human influence on climate is “clear”, that recent “anthropogenic” emissions have resulted a concentration of greenhouse gases in the atmosphere which is “unprecedented” in the last “800,000 years”, that the warming of the climate system is “unequivocal”. Burning of fossil fuels and industrial processes account for 78 per cent of increase in emissions from 1970. Economic and population growth is the main driver of the increase of emissions through combustion of fossil fuels.

What is the impact of all this?

Oceans are warmer, huge amounts of snow and ice have vanished, sea levels have risen. Extreme weather patterns, like unusually heavy rain, can be linked to “human influences”. It is very likely that the number of cold days and nights has decreased, and the number of warm days and nights has increased globally. Continued emissions will lead to “long-lasting” changes in climate systems, increasing the likelihood of “severe, pervasive and irreversible” impact.

What can be done to prevent this?

To keep the rise in surface temperatures below 2 degrees Celsius — considered necessary to avoid the catastrophic effects of climate change — global emissions need to be cut by at least 40% to 70% by 2050 as compared to 2010 levels. By 2100, if the 2-degree barrier is not to be breached, this cut needs to be almost 100% of 2010 levels. There is still a small window of opportunity to stay within the 2-degree limit, but the response has to be immediate and adequate. A mix of mitigation, adaptation, “pursuit of other social objectives” is required.

What happens to the Report?

The Report is the basis on which the global climate negotiations are taking place. It comes weeks before the annual climate conference in Lima, which is supposed to prepare the ground for an agreement on a comprehensive global climate agreement, which everyone is hoping could be delivered at the next conference in Paris in 2015.

RuPay Card

What is RuPay card?

Recent developments saw Government passing on instructions to state owned banks to issue RuPay debit cards to their customers. This looks like a clear indication to promote these cards. But, what exactly is this RuPay card and how does it function? Let’s look into it now.

What is it?

RuPay is a combination of two words – Rupee and Payment. RuPay Card is an Indian version of credit/debit card. It is very similar to international cards such as Visa/Master.

Who initiated it?

National Payments Corporation of India (NPCI) initiated the launch of RuPay card in India. It was done with the intention of integration of payment systems in the country. It has also tied up with Discover Financial Services firm for promoting this.

How will it work?

RuPay debit cards are similar any other debit cards that you might hold now. You can access them in the 1.45 lakh ATMs and 8.75 lakh POS terminals across the country. It will also be accepted on 10,000 e-commerce websites. All major public sector banks, including SBI, have started issuing these cards to all their customers. The card also comes with a high end technology chip named EMV (Europay, Master Card and Visa) especially for high end transactions. It also has an embedded micro processor circuit with information about the card holder.

What are the Benefits of RuPay card?

Lower transaction cost – International transactions lead to higher transaction costs. Such costs can be reduced by using RuPay card since processing will be done within the country. Also, transactions will be faster.

Sms alerts – Users will get alerts for every transaction made through this card.

Reduced processing fees – Processing fees for RuPay card compared with regular debit/credit cardswill be considerably lower.

Summary of G20 Meet

Economic growth: The leaders of the world’s most powerful industrial economies pledged to grow their combined economic output by an extra 2.1% – around $2 trillion – over the next five years. This was above the 2% goal they were initially targeting. The strategy to achieve this goal through domestic policy reforms will be known as the “Brisbane Action Plan”.

Infrastructure investment: The summit agreed to launch the Global Infrastructure Initiative to unlock private financing for infrastructure investment worldwide, including the creation of a Global Infrastructure Hub based in Sydney to support best practices and coordination.

Trade liberalisation: Increased global trade will be a requirement if the G20 is to achieve its growth target. The leaders committed to the implement all elements of the Bali package and swiftly define a WTO work programme on the remaining issues of the Doha Development Agenda.

Tax and financial regulation: The G20 leaders agreed to complete by 2015-end a plan to combat tax avoidance by multinational companies. They also vowed to strengthen financial institutions, protect taxpayers from having to fund bailouts of “too big to fail” banks and to make derivative markets safer.

Gender Equality: The summit won a commitment by each country to close the gap between its male and female labour-force participation rates by 25% by 2025. This will bring an estimated 100 million additional women into the labour force.

Energy: In a first, a session was dedicated to energy issues and the participants agreed that energy will now be at the heart of the G20 agenda, with strong and resilient energy markets critical to economic growth. They asked energy ministers to meet and report back on options to take this work forward.

Ebola: While not on the official agenda, leaders expressed support for an urgent coordinated international response to the crisis raging in West Africa. They called on international financial institutions to assist affected countries.

Climate: The G20 leaders committed to addressing the challenge of climate change including communicating post-2020 domestic climate targets as soon as possible and preferably by the first quarter of 2015. They also stressed the importance of climate finance, including contributions to the Green Climate Fund.

“The thing about the G20 is that it is large enough to be representative of the wider world and it’s small enough to be effective,” said Australian Prime Minister Tony Abbott after the summit. “People around the world are going to be better off, and that’s what it’s all about”.

2016: Turkey takes over the presidency from Australia and will host the summit in Antalya next year, and China would be home to the G20 in 2016, the group said in a communique.

Operation Cactus

A group of Maldivians led by Abdullah Luthufi and assisted by armed mercenaries of a Tamil secessionist organisation from Sri Lanka, the People’s Liberation Organisation of Tamil Eelam (PLOTE), plotted to overthrow the government in the island republic of Maldives in 1988. They infiltrated the Maldivian capital of Malé and took control of key points in the city. Abdul Gayoom personally (President) requested military assistance from several countries, including India, the United States, Britain, Pakistan, Sri Lanka, Malaysia and ‘other’ Asian states.

New Delhi responded to the crisis with uncharacteristic speed and decision, seeing it as India’s prerogative and its responsibility. The Indian Cabinet approved the dispatch of forces at 1530 hrs on November 3rd.  1,600 troops by air to restore order in Malé, landing on the nearby island of Hulhule which was still under the control of Maldivian security services. The operation started on the night of 3 November 1988, when Ilyushin Il-76 aircraft of the Indian Air Force airlifted the elements of the 50th Independent Parachute Brigade, commanded by Brig Farukh Bulsara, the 6th Battalion of the Parachute Regiment, and, the 17th Parachute Field Regiment from Agra Air Force Station and flew them non-stop over 2,000 kilometres (1,240 mi) to land them over the Malé International Airport on Hulhule Island. The Indian Army paratroopers arrived on Hulhule in nine hours after the appeal.

The Indian paratroopers immediately secured the airfield, crossed over to Male using commandeered boats and rescued President Gayoom. Nineteen people reportedly died in the fighting, most of them mercenaries. The dead included two hostages killed by the mercenaries. 

Additional Indian troops were transported by air and by sea from Cochin. Indian Air Force Mirages were deployed over Malé as a show of force.

 Shortly thereafter a vessel was seen fleeing Male and it was discovered that mercenaries were on board with hostages, including the Maldivian Minister of Education. Cdr. of the 17 Para Fd. Regt. rushed its heavy machine guns and rocket launchers to the southern tip of the island and fired on the ship. Though the 17 Para Fd. Regt. scored hits, the ship escaped only to be boarded by the Indian Navy the following day.

The ship was detected by an IL-38 May maritime recon aircraft, from the Indian Navy, and was then tracked by an Tu-142M Bear-F, another maritime recon aircraft of the Indian Navy, until 2 Indian Naval vessels, the INS Tir and INS Godavari were able to capture the absconding ship. Two Sea King Mk.42 choppers, from the one of the naval vessels, dropped depth charges to deter evasion.

The Indian Marine Strike Force (now known as the Marine Commando Force – MARCOS) commandos boarded the vessel and took control without any resistance from the mercenaries. Operation Cactus was concluded without any casualties to India, except for an Indian soldier who shot himself in the foot. 

India received international praise for the operation. President Reagan expressed his appreciation for India’s action, calling it ‘a valuable contribution to regional stability’. Margaret Thatcher reportedly commented: ‘Thank God for India: President Gayoom’s government has been saved. But the intervention nevertheless caused some disquiet among India’s neighbours in South Asia.

In July 1989, India repatriated the mercenaries captured on board the hijacked freighter toMaldives to stand trial. President Gayoom commuted the death sentences passed against them to life imprisonment under Indian pressure.

The 1988 coup d’état had been headed by a once prominent Maldivian businessperson named Abdullah Luthufi, who was operating a farm on Sri Lanka. Former Maldivian PresidentIbrahim Nasir was accused, but denied any involvement in the coup d’état. In fact, in July 1990, President Gayoom officially pardoned Nasir in absentia in recognition of his role in obtaining Maldives’ independence.

The operation also strengthened Indo-Maldivian relations as a result of the successful restoration of the Gayoom government.

(Extracted from India’s Ocean: the story of India’s bid for regional leadership by David Brewster’, and other sources )

Summary of SAARC summit

In their inaugural speeches to the 18th SAARC Summit on Wednesday, November 26, 2014, leaders of SAARC member states have emphasized on fighting terrorism, attaining sustainable peace and enhancing economic cooperation.

Here is a synopsis of ‘who said what’ during the inaugural session:

Sustainable peace for development: Ashraf Ghani, President, Afghanistan
Effective co-work is required among member states to achieve sustainable peace, a pre-requisite for the development of this region. The co-work needs to be realized in practice, so that all forms of terrorism would be eliminated from this region. This region is in the centre stage of Asia and all must cooperate to make the citizens of this region prosperous.

Poverty, food security, disaster management main challenges: Sheikh Hasina, Prime Minister, Bangladesh
Strong co-work is needed for alleviating poverty, ensuring food security and managing natural disasters. We need to focus on proper scientific and technical education, women empowerment and inclusion. Inter-regional and bilateral cooperation is also required. Need-based cooperation can be sought from the observer countries.

Food security, terrorism main challenges: Tshering Tobgay, Prime Minister, Bhutan
Despite potentials, this region has not achieved success as expected. Poverty, food security, energy crisis and terrorism are the main problems of this region. Terrorism is emerging as the latest challenge and all nations need cooperation on this front. Youth need to be educated and given opportunities in this region.

India is not happy with trade surplus with SAARC members: Narendra Modi, Prime Minister, India
India is ready to extend all types of cooperation to develop SAARC. We need to convert each other’s suspicions into hopes. There was a major terrorist attack in Mumbai in 2008. We need to co-work to address this type of problem in future. India has trade surplus with SAARC nations but India is not happy with this. We need to promote regional trade, investment, cooperation, contacts and networks. We will encourage our businessmen to invest in SAARC nations.

Climate change and its effect is main problem: Abdulla Yameen, President, Maldives
The journey of SAARC is more than 3 decades old now. But trust has not been established among the member nations. Appropriate initiatives need to be taken to address poverty and boost up trade in this region. Climate change has been affecting this region, of late. This needs to be tackled jointly.

Go ahead collectively: Sushil Koirala, Prime Minister, Nepal
We need to develop common concept and vision and co-work to move ahead collectively. There are numerous challenges for development of this region and we need to mitigate them together.

Nepal is moving forward on the path of development and Nepal’s development would contribute to the development of SAARC region as well.

Unite all to alleviate poverty: Mahinda Rakapaksa, President, Sri Lanka
In a region of more than 1.5 billion population, poverty remains alarmingly high at 25 percent. All member nations need to address this problem collectively. Member states can work together on energy, communication, railway and disaster management sectors. The end of Tamil rebellion in 2009 in Sri Lanka has opened new avenues for development and prosperity in this region. Nepal is the birthplace of Lord Buddha and this 18th SAARC Summit will therefore give message of peace to the world.

Do not fight each other but fight against backwardness: Nawaz Sharif, Prime Minister, Pakistan
We should not fight each other. The fight should be against poverty, deprivation, illiteracy and malnutrition. We need to make this region free of conflict. We have a lot of potentials but have not been able to harness them at an international level. Member states need to develop common concept on easy supply of energy and smooth management of visa system.

Observers from Australia, China, Iran, Japan, South Korea, Myanmar, USA and European Union expressed their commitment to enhance ties with SAARC for mutual prosperity and economic cooperation. SAARC General Secretary, Arjun Bahadur Thapa, also addressed the inaugural session.

Full Speech of Mr. Modi:

Prime Minister Sushil Koirala ji, my colleagues from South Asia. I am delighted to return to Kathmandu.

            Koiralaji, congratulations on organising an excellent Summit.

Thank you, Nepal, for your warm hospitality once again.

Greetings to the Observer countries present here.

This is my fist SAARC. But, this is the second time I meeting most of you together. I stepped into the office with the greetings of the entire world.

But, what moved me, dear colleagues, was your personal presence, with the good wishes of one-fourth of humanity.

Because the future I dream for India is the future I wish for our entire region.

            The last Summit was three years ago. Only two of us here were present in Addu. Even Prime Minister Sheikh Hasina has come here after her re-election. President Rajapaksa will soon go into one and I wish him good luck. I especially welcome our newest colleague, President Ghani.

Ours is a region of thriving democracy; of rich inheritance; the unmatched strength of youth; and, a strong thirst for change and progress.

In the last few months, I have travelled around the world.

From the middle of the Pacific, to the southern coast of Atlantic Ocean, I see a rising tide of integration.

And, negotiations on major trade agreements such as Regional comprehensive Economic Partnership, the Trans Pacific Partnership and the Trans Atlantic Trade and Investment Partnership.

Because the barriers of boundaries inhibit progress; international partnerships add speed to it.

             Because, in the life of an individual or a nation, a good neighbourhood is a universal aspiration.

Where does South Asia wish to stand in this world?

Nowhere in the world are collective efforts more urgent than in South Asia; and, nowhere else is it so modest.

Big and small, we face the same challenges- a long climb to the summit of development.

But, I have great belief in our boundless potential; and, confidence-that comes from the many inspiring stories of innovation and initiative in each of our countries
There is much to learn from each other; even more – to do together.

That was the vision and aspiration that brought us together as SAARC 30 years ago. We have travelled a long distance together since then.

We have an agreement, an institution or a framework of cooperation in every field. We also have many successes.

Just think of what we are doing to our consumers – and to our environment!

            We must shrink the distance between our producers and consumers and use the most direct routes of trade. I know India has to lead, and we will do our part. I hope, each of you will, too.

Infrastructure is our region’s greatest weakness and it’s most pressing need.

When I thought of coming to Kathmandu by road, it made many officials in India nervous.

Because of the condition of roads at the border!

Infrastructure is my greatest priority in India. And, I also want to set up a Special Purpose Facility in India to finance infrastructure projects in our region that enhances our connectivity and trade.

We speak of ease of doing business in India. Let’s extend this to our region. I promise to ensure that our facilities at the border will speed up, not slow down, trade.

Let’s all make our procedures simple, our facilities better, our standards common and our paper workless burdensome.

India will now give business visa for 3-5 years for SAARC. Let’s make it even easier for our businesses through a SAARC Business Traveller Card.

Excellencies, India has a huge trade surplus with SAARC countries. I believe that this neither right nor sustainable.

We will address your concerns and give you a level playing field in India. But, I encourage you to attract Indian investments to produce for the Indian market and create jobs for your youth.

I also look to a future when your companies can easily raise funds in India for investments at home; and, when we have cross-border industrial corridors, so that we can take advantage of the natural synergies and connected lives in our Border States.

I also believe that if we can light up each other’s towns and villages, we can build a brighter tomorrow for our region.

Or, face a future when someone looks down at us from Space, and says that this is world’s darkest corner.

Let us treat electricity as a commodity like any other that we invest and trade in. India will fully support these initiatives in the region.

We should also think with ambition to use solar energy and micro grids to quickly provide clean power to villages across the region.

Our relations become stronger when we connect the lives of the ordinary citizens of our countries. That is why connectivity and services by rail and road are so important. We should also connect ourselves more by air.

We will not only make a difference to the lives of our people, but also promote tourism in the region.

We should use the strength of shared heritage and our diversity to encourage tourism within our region, and present South Asia to the world. We could begin with the Buddhist circuit, but we don’t have to stop there.

            As we seek to build bridges to prosperity, we must not lose sight of our responsibility to the millions living through SAARC or outside it.

    Among us or some of us.

    We can all choose our paths to our destinations. But when we join our hands and walk in step, the path becomes easier, the journey quicker and the destination closer.

    I say this as much to my government and people, I say to you.

    We are meeting in the lap of himalaya, which has nurtured us ages. Today, it is calling us to act.

    Let us work to change cynicism into optimism.

    Let us turn South Asia of flowering hope into a rich field of peace and prosperity.

(Courtesy: Nepalnews and MEA, India)

summary of Second Tax Administration Reform Commission

The Tax Administration Reform Commission or TARC is committee appointed by the Government of India for giving recommendations for reviewing the public Tax Administration system of India.

After submitting its first Report in June 2014 , the Tax Administration Reform Commission (TARC) headed by Dr. Parthasarathi Shome, submitted its second report to the Government on 26 September 2014. In its first report, TARC had provided suggestions mainly concerning review of taxpayer services, structure and governance, dispute resolution, Information & Communication Technology (ICT).

Second report of TARC, submitted on 26 September 2014, emphasizes on the two major areas of Indian Tax administration i.e. “capacity building in Customs administration” and “strengthening of database and inter-agency information sharing”.

Capacity building in Customs

• ► Key reasons highlighted by the Report for emphasizing the need of capacity building in Customs are the rapid growth in global trade, complex nature of supply chains, aspects of security, growing e-commerce trade amongst others.
• ► The report has also thrown light on some of the important distinguishing factors between Indian Customs administration and corresponding global practices such as revenue collection mechanism, protection of economic interests of domestic industry, protection of society, economic development etc.
• ► The shift of traditional based approach of Customs administration to international best practices will require a strategic restructuring of Customs and a change in the prevailing transactional and administrative mindset.
• ► TARC in its report suggested that Customs should not excessively focus on revenue generation and it should play a more proactive and prominent role in trade facilitation. Customs should adopt trust-based approach with the taxpayers and promote voluntary compliance
• ►Development of the Advanced Passenger Information System (APIS), in active co-operation with the Bureau of Immigration
• ► Trade facilitation and co-ordinated border management with a “single window” approach
• ► Measures for implementation of World customs Organisation’s (WCO) SAFE Framework of Standards and Authorised Economic Operator Programme (AEO)
• ► Harnessing ICT and other Technologies
• ► Investments in Non-intrusive Inspection Systems such as container scanners

 Information Exchange

• ► The report has pointed out that, so far, CBDT, CBEC, as well as other Revenue agencies have been generating and collecting information separately for own purposes and no substantial efforts have been made to integrate such information. However, in advanced tax administrations across the world, collaborative and collective mechanism is prevailing for exchange of information across agencies, for compliance and enforcement.
• ► To reduce the time as well as costs involved in duplicating efforts of collecting and processing information, TARC has recommended creation of common database following “one data, many users approach”.
• ► Key recommendations given by TARC for information exchange are as follows:
• ► Instituting a robust common framework for data and information exchange
• ► To create mutual trust, openness and willingness to share amongst
• participating agencies
• ► Common standards and taxonomy for data exchange

Other important recommenadations:

Greater capacity needs to be built in customs to counter trade based money laundering by greater use of analytics and strong co-ordination among the DRI, RMD, FIU and Directorate of Enforcement. (Section VIII.4.c)

Customs should leverage the adoption of the emerging “internet of things” by the logistics industry to real-time tracking of movement of goods across the supply chain, including to CFSs, ICDs, SEZs etc. and eliminate dilatory, costly and unreliable paper based processes. (Section VIII.4.l)

A robust audit and accountability policy must be developed to address the purpose and scope of information sharing, roles and responsibilities of dedicated teams, authorisation layers access to data, review of the safeguards put in place by an agency receiving information and the secure storage, disposal and confidentiality of the data and information.

Along with the policy, sound processes are required to facilitate the implementation of the policy. These audits must be conducted by dedicated teams who should report the findings of the audit to the DG (Systems) of the two Boards for course correction. (Section IX.5.l)

The CEIB will work under the Governing Council, recommended in the first report, to play a strategic oversight advisory role to the Governing Council on data or information exchange. The Governing Council would thus play a key role in data and information exchange between the CBDT, CBEC, FIU, CEIB, SEBI and banks, and develop strategies to reduce the incidence of non-compliance and reduce the tax gap. (Section IX.6.i)

RBI and its functions

The central bank of our country is the Reserve Bank of India (RBI). It was established in 1935 (by the RBI Act, 1934) on the basis of recommendation of Hilton Young commission as a private shareholders’ bank with a paid up capital of rupees five crores. Starting as a private shareholders’ bank, the Reserve Bank of India was nationalised in 1949 and emerged as the central banking body of India.

The functions of the Reserve Bank today can be categorised as follows:

• Monetary and Credit policy
• Foreign exchange management
• Currency management
• Banker to banks & Lender of the last resort
• Banker to the Central and State Governments
• Central clearing house of payment and settlement systems
• Performing developmental and promotional functions

Monetary and Credit Policy

One of the most important functions of central banks is formulation and execution of monetary policy. Over time, the objectives of monetary policy in India have evolved to include maintaining price stability, ensuring adequate flow of credit to productive sectors of the economy for supporting economic growth, and achieving financial stability. The policy by which desired level of money flow and its demand is regulated is known as monetary and credit policy.

The Governor of the Reserve Bank announces the Monetary Policy in April every year for the financial year that ends in the following March. This is followed by three quarterly reviews in July, October and January. However, depending on the evolving situation, the Reserve Bank may announce monetary measures at any point of time. There are many tools by which RBI regulates the desired kind of credit and monetary policy- CRR, SLR, Bank Rate, Repo Rate, Reverse Repo Rate (explained later).

Currency management

Under Section 22 of the RBI Act, the bank has the sole right to issue bank notes of all denomination.

The Indian Currency is called the Indian Rupee and its sub-denomination the Paisa. The printing of Re.1 and Rs.2 denominations has been discontinued. However, notes in these denominations issued earlier are still valid and in circulation. Coins up to 50 paisa are called “small coins” and coins of Rupee one and above are called “Rupee coins”.

The RBI Act requires that the Reserve Bank’s affairs relating to note issue and its general banking business be conducted through two separate departments – the Issue Department and the Banking Department. RBI issues currency on the basis of Minimum Reserve System under which it keeps a minimal backing of 200 crores; out of which 115cr worth of Gold and 85cr worth of securities and Bonds of foreign governments.

Foreign exchange management

The Reserve Bank, as the custodian of the country’s foreign exchange reserves, is vested with the responsibility of managing their investment. The basic parameters of the Reserve Bank’s policies for foreign exchange reserves management are safety, liquidity and returns. While safety and liquidity continue to be the twin-pillars of reserves management, return optimisation has become an embedded strategy within this framework.

Within this framework, the Reserve Bank focuses on:

a) Maintaining market’s confidence in monetary and exchange rate policies.

b) Enhancing RBI intervention in stabilising foreign exchange markets.

c) Limiting external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis, including national disasters or emergencies.

The foreign exchange reserves include foreign currency assets (FCA), Special Drawing Rights (SDRs) and gold. SDRs are held by the Government of India. The foreign currency assets are managed following the principles of portfolio management.

Banker to banks & Lender of the last resort

Banks are required to maintain a portion of their demand and time liabilities as cash reserves with the Reserve Bank, thus necessitating a need for maintaining accounts with the Bank. In order to facilitate a smooth inter-bank transfer of funds, or to make payments and to receive funds on their behalf, banks need a common banker. In order to meet the above objectives, in India, the Reserve Bank provides banks with the facility of opening accounts with itself. This is the ‘Banker to Banks’ function of the Reserve Bank.

As Banker to Banks, the Reserve Bank provides short-term loans and advances to select banks, when necessary, to facilitate lending to specific sectors and for specific purposes. The Reserve Bank also acts as the ‘lender of last resort’. It can come to the rescue of a bank that is solvent but faces temporary liquidity problems by supplying it with much needed liquidity when no one else is willing to extend credit to that bank.

Banker to the Central and State Governments

The Reserve Bank of India Act, 1934 requires the Central Government to entrust the Reserve Bank with all its money, remittance, exchange and banking transactions in India and the management of its public debt. The Reserve Bank may also, by agreement, act as the banker to a State Government. Currently, the Reserve Bank acts as banker to all the State Governments in India, except Jammu & Kashmir and Sikkim.

The Reserve Bank also undertakes to float loans and manage them on behalf of the Governments. It also provides Ways and Means Advances – a short-term interest bearing advance – to the Governments, to meet the temporary mismatches in their receipts and payments. It also acts as adviser to Government, whenever called upon to do so, on monetary and banking related matters.

Central clearing house of payment and settlement systems

The increasing monetisation in the economy, the country’s large geographic expanse, people’s preference for paper-based instruments and rapid changes in technology are among factors that make this task a formidable one.

The various initiatives taken by RBI are:

• Computerisation
• Pre-paid payment instruments
• Cheque Truncation System (CTS)
• Electronic Clearing Service (ECS)
• National Electronic Clearing Service (NECS)
• Electronic Funds Transfer (EFT)
• The Real Time Gross Settlement (RTGS) system

Performing developmental and promotional functions

The Reserve Bank’s developmental role includes ensuring credit to productive sectors of the economy, creating institutions to build financial infrastructure, and expanding access to affordable financial services. It also plays an active role in encouraging efficient customer service throughout the banking industry, as well as extension of banking service to all, through the thrust on financial inclusion. Towards this goal, which has evolved over many years, the Reserve Bank has taken various initiatives like Priority Sector Lending, Lead Bank Scheme, Kisan Credit Cards, Differential Interest Rate Scheme, setting up of various institutions like SIDBI, NABARD.

Functions of HRM

Globalization, the process of integrating a business's operations and strategies across a wide array of cultures, products and ideas, is having an impact on the role of human resource managers. Once concerned with the impact of local issues on employees, human resources must now consider the effects of workforce diversity, legal restrictions and the interdependence between training and professional development on the organization. As such, the five main functions of global human resource management are vital concepts to the strategic operation of a business.

Recruitment

Attracting, hiring and retaining a skilled workforce is perhaps the most basic of the human resources functions. There are several elements to this task including developing a job description, interviewing candidates, making offers and negotiating salaries and benefits. Companies that recognize the value of their people place a significant amount of stock in the recruitment function of HR. There is good reason for this -- having a solid team of employees can raise the company's profile, help it to achieve profitability and keep it running effectively and efficiently.

Training

Even when an organization hires skilled employees, there is normally some level of on-the-job training that the human resources department is responsible for providing. This is because every organization performs tasks in a slightly different way. One company might use computer software differently from another, or it may have a different timekeeping method. Whatever the specific processes of the organization, human resources has a main function in providing this training to the staff. The training function is amplified when the organization is running global operations in a number of different locations. Having streamlined processes across those locations makes communication and the sharing of resources a much more manageable task.

Professional Development

Closely related to training is HR's function in professional development. But whereas training needs are centered around the organization's processes and procedures, professional development is about providing employees with opportunities for growth and education on an individual basis. Many human resource departments offer professional development opportunities to their employees by sponsoring them to visit conferences, external skills training days or trade shows. The result is a win-win: it helps the employee feel like she is a vital and cared-for part of the team and the organization benefits from the employee's added skill set and motivation.

Benefits and Compensation

While the management of benefits and compensation is a given for human resources, the globalization of companies in the twenty-first century has meant that HR must now adapt to new ways of providing benefits to an organization's employees. Non-traditional benefits such as flexible working hours, paternity leave, extended vacation time and telecommuting are ways to motivate existing employees and to attract and retain new skilled employees. Balancing compensation and benefits for the organization's workforce is an important HR function because it requires a sensitivity to the wants and needs of a diverse group of people.

Ensuring Legal Compliance

The final function of human resource management is perhaps the least glamorous but arguably of utmost importance. Ensuring legal compliance with labor and tax law is a vital part of ensuring the organization's continued existence. The federal government as well as the state and local government where the business operates impose mandates on companies regarding the working hours of employees, tax allowances, required break times and working hours, minimum wage amounts and policies on discrimination. Being aware of these laws and policies and working to keep the organization completely legal at all times is an essential role of human resources.