VANIK’S MONTHLY MAGAZINE A Pandemic That Is Out Of Control India is suffering the world’s worst Covid-19 crisis. The current situation in India — call it a nightmare, a challenge, mayhem, a carnage, or an apocalypse — will end someday after destroying millions of lives and livelihoods. On May 1 this year, India’s daily COVID-19 case tally hit a grim global record with 4,01,993 fresh infections in the last 24 hours and 3,523 deaths reported. The third phase of the world’s largest vaccination drive also started on May 1 amid chaos as several states have flagged a shortage. India recorded over four lakh cases for the first time after reporting 3 lakh daily infections for nine straight days. When cases started declining, people just broke out of the protocol of wearing a face mask, washing hands regularly and maintaining social-physical distance. Gatherings began becoming large particularly January 2021 onwards. Rules were relaxed. Penalties were not enforced. The pattern was seen across the country allowing the novel coronavirus to create a second and possibly stronger wave. The political class is guilty of holding huge political rallies in the middle of a raging pandemic. The current outbreak of COVID-19 that has gripped Maharashtra started immediately after intensive local campaigning for Panchayat elections across the state throughout January 2021. West Bengal is already showing a huge spike in the number of fresh cases following huge rallies by various political parties. The queues outside polling booths and gatherings at the election rallies of all the parties defied Covid-19 protocol. This sent a confusing message to the public and also the grassroots-level functionaries of the government. It weakened the vigil against the pandemic. Increased testing is another reason why India is detecting more cases in the second wave of the Covid-19 pandemic. In mid-February, our daily caseload was at its lowest, fewer than 11,000 per day. But mutant viruses were already circulating at low levels before then. Sequencing data now tells us that what we’re calling the Double Mutant variant — the technical name is B.1.617 — was already seen in December, but it was very minor and nobody really paid attention to it. That, and the introduction of the U.K. variant (B.1.1.7) into India in January, finally caught up with us and led to the surge that started from about the third week of February. In Punjab almost 80% the virus circulating is the U.K. variant. And it’s the same is in Haryana, the neighboring state. But in Delhi, we have the U.K. variant and the Double Mutant, both. In Maharashtra, there’s more of the Double Mutant, up from 15% to 20% in February to roughly 35% to 60% now, depending upon where you look. The provisions of the Epidemic Act are still in force throughout the country, and there are restrictions on mass gatherings in most states. However, the restrictions have been repeatedly, blatantly and publicly violated. The health system has broken down, with scarcities in everything from hospital beds to oxygen. Hopefully, the situation will be under control with supply bottlenecks being addressed, and also importing oxygen concentrators from abroad. However, the progress in vaccinations needs to be ramped up significantly if we have to win the fight against COVID-19. In Mumbai, only 1 out of 4 vaccination centres open (37 open, 95 shut) due to shortage of vaccine. This does not bode well. Mass vaccination is the only safe and reliable method to end the pandemic without significant mortality. All those above the age of 18 will be eligible to get vaccinated. This will cover an approximate populace of 84 crore. To get them vaccinated with two doses (most vaccines in world are two doses) we need to have 168 crore doses. The vaccination in India started on January 16 this year. So far we have administered around 14 crore doses (12 crore first doses and 2 crore second doses). At this pace, it will take years for India to get vaccinated. This is a national disaster and the national government should drive the initiative. So far, we have vaccinated only 2% with both doses. Let's put our best foot forward and ensure that a reasonably large proportion of our eligible population gets vaccinated by August 15th, so that from the ramparts of Red Fort, we can declare our independence from COVID-19. Plot-1441, Opp. IOCL Petrol Pump, CRP Square, Bhubaneswar-751015 Ph. : (0674) 6556677, 8093556677. Web : www.vanik.org, E-mail : [email protected] VANIK’S MONTHLY MAGAZINE ECONOMY RBI RBI keeps repo rate unchanged at 4% The six-member monetary policy committee of the Reserve Bank of India (RBI) headed by Governor Shaktikanta Das, has decided to keep key lending rates unchanged for the fifth consecutive time, in its April 2021 policy review meeting held between April 5 to 7, 2021. The policy rates are as follows: Repo rate : 4 % Reverse repo rate : 3.35 % Marginal Standing Facility (MSF) Rate : 4.25 % Bank Rate : 4.25 % CRR : 3.50 % SLR : 18.00 % Meanwhile, the GDP growth of India is projected at 10.5 % in financial year 2021-22. RBI deputy governor BP Kanungo retired Reserve Bank of India’s (RBI) Deputy Governor BP Kanungo has stepped down as his term ended on 2 April 2021. His term was set to expire in April 2020 but was given a one-year extension with effect from 3 April 2020. Reserve Bank of India (RBI): Governor: Shaktikanta Das Deputy Governors: MK Jain, MD Patra, and M Rajeshwar Rao RBI issues guidelines for appointment of statutory auditors of banks, NBFCs The Reserve Bank of India issued guidelines for appointment of statutory auditors of banks and non-banking finance companies (NBFCs), including housing finance companies. It will be applicable for financial year 2021-22 and onwards. However, non-deposit taking NBFCs with asset size below Rs 1,000 crore have the option to continue with their extant procedure. Banks and UCBs will be required to take prior approval of Reserve Bank of India (RBI) for appointment/reappointment of SCAs/SAs, on an annual basis. For entities with an asset size of Rs 15,000 crore and above as at the end of previous year, statutory audit should be conducted under joint audit of a minimum of two audit firms. All other entities should appoint a minimum of one audit firm for conducting statutory audit. Reserve Bank of India (RBI) Headquarters: Mumbai, Maharashtra Formation: 1 April 1935 Governor: Shaktikanta Das Deputy Governors: MK Jain, MD Patra, M Rajeshwar Rao. Subsidiaries: Deposit Insurance and Credit Guarantee Corporation (DICGC), Bharatiya Reserve Bank Note Mudran (BRBNM) Reserve Bank of India caps tenure of private bank CEOs at 15 years RBI has issued instructions on governance for banks. The instructions are meant for private sector banks, small finance banks (SFBs) and wholly owned subsidiaries of foreign banks. Foreign banks operating as branches in India will not come under the instructions issued by RBI. The instructions have come into effect from the date of issue of the circular. But, banks have been allowed to comply with instructions by October 01, 2021. As per RBI, the same incumbent cannot hold the post of MD & CEO or whole time director for more than 15 years. MD & CEO or whole time director who is also a promoter/ major shareholder cannot hold posts for more than 12 years. RBI has said that individuals will be eligible for reappointment on the post of MD & CEO or whole time director after a minimum gap of three years. Individuals will be eligible for reappointment if the board considers the reappointment necessary and desirable. RBI has allowed the upper age limit for MD & CEO and whole time director to continue at 70 years. Boards of banks can prescribe a lower retirement age for MD & CEO and whole time director. Plot-1441, Opp. IOCL Petrol Pump, CRP Square, Bhubaneswar-751015 Ph. : (0674) 6556677, 8093556677. Web : www.vanik.org, E-mail : [email protected] VANIK’S MONTHLY MAGAZINE RBI imposed Rs 40 lakh penalty on Himachal Pradesh State Cooperative Bank The Reserve Bank of India (RBI) has imposed a penalty of 40 lakhs on Himachal Pradesh State Cooperative Bank, Shimla, for non-compliance with certain regulatory directions issued by NABARD (National Bank for Agriculture and Rural Development). The penalty has been imposed for non-compliance with regulatory directions issued by NABARD contained in ‘Review of Frauds – Guidelines on Monitoring and Reporting System’. RBI cancelled licence of Bhagyodaya Friends Urban Co-operative Bank Limited due to inadequate capital The Reserve Bank of India (RBI) has cancelled the licence of Maharashtra-based Bhagyodaya Friends Urban Co- operative Bank Limited due to inadequate capital. On liquidation, every depositor is entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakhs from the DICGC subject to the provisions of the DICGC Act, 1961. RBI allows commercial banks to pay up to 50% of pre-Covid dividends The Reserve Bank of India (RBI) relaxed the dividend payout norms of commercial banks and allowed them to pay up to 50 per cent of what they paid before Covid from the profits for the fiscal ended March 31, 2021. For FY20, the RBI had asked banks not to make any dividend payment on equity shares from the profits in view of the ongoing stress and heightened uncertainty on account of Covid-19. For co-operative banks, all the restrictions on dividends have been removed.