Money & Banking
First MPC Minutes: External members relatively dovish, RBI nominees guarded
The Reserve Bank of India (RBI) released Minutes of the Monetary Policy Committee (MPC) meeting held on 3rd and 4th October 2016. As per the minutes and individual statements, external members on the Committee appear relatively dovish, while those from RBI seems to be guarded on the inflation front, which is more or less expected from the central bank members, says a report.
In a research note, Religare Capital Markets Ltd, says, "A unique aspect of the minutes was that individual member views were communicated separately. However, there was no explicit guidance on their future stance or any commentary on real neutral policy rate that they would seek and the timeline to meet the medium term consumer price index (CPI) inflation target of 4%. The MPC members expect growth to pick-up with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission’s award."
The six-member committee has RBI Governor Urjit Patel as chairman and the central bank's Deputy Governor R Gandhi and Executive Director Michael Patra, as the institution's representatives. The three outside experts are Dr Chetan Ghate, Professor at Indian Statistical Institute; Dr Pami Dua, Director at the Delhi School of Economics; and Ravindra Dholakia, Professor at the Indian Institute of Management, Ahmedabad.
During the MPC meeting, all members unanimously decided to cut repo rate by 25 basis points (bps).
According to Religare, the members from outside RBI were relatively dovish, which is evident from their individual statements, in the minutes.
Dr Ghate indicated that both cyclical and structural risks to the March 2017 CPI inflation target had abated on the back of a good monsoon, decline in food inflation and better food supply management by the government, even as he highlighted concerns around the persistence of core inflation. He stated, “inflation expectations, based on the Survey of Professional Forecasters, were closer to the inflation target, which was expected to contribute to low and stable inflation.” 
Dr Dua also highlighted that inflation expectations were anchored based on the Survey of Professional Forecasters. She said that the RBI’s Industrial Outlook Survey suggests some increase in input price pressures in the manufacturing sector in the short term, though this is not expected to transmit to higher selling prices.
Dr Dholakia from IIM-A observed that upside risks to inflation arising out the 7th Central Pay Commission (CPC) payout were largely statistical and there is a good chance for inflation to ease further substantially, benefiting from a good monsoon, the government’s supply management measures, and ongoing reforms gaining traction in terms of reducing costs and improving output response.
On the other hand, Religare says, the nominees from RBI were relatively guarded on the inflation front, which was more or less expected from them. Dr Patra stated that although inflation momentum had collapsed, particularly in essential food items and the Q4FY17 target seems to be achievable, it was crucial to step up vigil around the upturn in inflation projected in Q4FY17. 
Dr Gandhi viewed significant comfort on the food inflation front, coming from a sharp rise in pulses output. However, he believed that government supply response and supply management will remain critically important to influence the space for monetary policy actions. 
The RBI governor Dr Patel also explicitly stated that the inflation target of 5% for Q4FY17 is likely to be achieved, even as upside risks persist.
Religare says it expect inflation to undershoot RBI's projection for FY2017. Given this and the tweaks in parameters instituted by the new RBI governor and the MPC in the October Monetary Policy meeting, Religare believes that there is room for another 25bps cut in the remaining part of FY17. 
"However," it added, "we believe medium-term upside risks to inflation remain and the journey to the RBI’s Q4FY18 estimate of 4.5% would be a difficult one. It would be affected by the implementation of the housing allowances portion of the 7th CPC, GST implementation , rising global commodity and oil prices, stickiness in core inflation and  the US Fed’s rate hike timeline and financial and currency market response, and the impact on imported inflation via currency depreciation."



Govinda Warrier

4 months ago

MPC has come into being to relieve RBI Governor from individual responsibility of taking monetary policy decisions. As the responsibility of chasing inflation target still remains with RBI, naturally there will be some weightage for the inputs from RBI in MPC deliberations. Fixing MPC members as Hawks or Doves, may add spices to analyses. Individual members may not be amenable to such classifications, as the expert body progresses.


Anil Kumar

In Reply to Govinda Warrier 4 months ago

Govinda, good point.

QNet: Hyderabad Police arrests Michael Ferreira & three others; ED questions Boman Irani’s son
Tough times for Michael Ferreira, former world billiard champion and three others arrested in the QNet scam case in Mumbai continue. All four have now been arrested by the Central Crime Station (CCS), a wing of Hyderabad Police in the multi-crore QNet scam case, even while their remand period in Mumbai is not completed. Last week, a special team from Hyderabad Police had submitted an application to a Court in Mumbai seeking custody of Ferreira, Magaral Balaji, Srinivas Vanka and Malcolm Desai. These main accused in the QNet scam were brought to Hyderabad from Mumbai on a prisoner transit warrant. "They have been brought here as part of further investigation and will be interrogated," a senior police officer from the CCS had said.
Meanwhile according to a report from India Today, the Enforcement Directorate (ED) had questioned Danesh Irani in Mumbai for at least four hours on Tuesday and recorded his statements under the Prevention of Money Laundering Act (PMLA). Danesh is the son of Bollywood actor Boman Irani. But more about it later. 
In September 2016, Hyderabad City Police arrested four independent representatives (IRs) of QNet for cheating about 200 people under the pretext of giving a job and collecting around Rs2 to Rs3 crore. In a release, the Hyderabad Police stated that cracking QNet case, they arrested four accused Sreenath Konda, Prasanna Kumar Reddy, Kanchana Vobbilichetty and Beemarthi Dhan Raj, who hatched plan to grab money from the innocent people on the name of providing job in e-commerce business through their websites, and 
Earlier this month, Ferreira, and two others surrendered before a Special Court following orders from the Bombay High Court. Last month, the HC had asked five prime accused, including the four, who are now in Hyderabad Police custody, and Suresh Thimiri, director of Transview Enterprises India Pvt Ltd to surrender as per the directions passed by the Supreme Court in the QNet scam case.
Ferreira owns 80% stake in Vihaan Direct Selling (India) Pvt Ltd, which is franchisee of QNet while Desai holds the rest. Magaral Balaji and Vanka are directors of Vihaan. Last month, all the five prime accused had approached the Bombay HC seeking to quash the first information report (FIR) filed by Gurupreet Singh Anand as well as a stay on coercive action against them by the authorities. A division bench headed by Justice Abhay Oka, while refusing to grant any relief, asked the five to surrender before authorities as per directions from the apex court.
Last month, the Supreme Court, while accepting Maharashtra's standing council Nishant Khatneshwarkar's argument that the accused have failed to join the investigation and the charges are serious, had directed the five to surrender within a week.
Earlier in May, the Bombay High Court had also rejected bail plea of these five associates of QNet. While rejecting anticipatory bail applications of five accused the HC had observed that "the deceit and fraud is camouflaged under the name of e-marketing and business". This scheme is undoubtedly a multi-level marketing (MLM) activity and a pyramid structure of such scheme is prepared so that the members are promised to get money on purchase and sale of products, the Court had said.
In a hard-hitting order on 6 May 2016, Justice Mridula Bhatkar of the Bombay HC had said, "The motto of the company (QNet) 'sell more, earn more' appears very attractive and innocuous. However, this motto is fully camouflaged. The company stands on a basic statement that people can be fooled. Thus, the true motto is 'sell more earn more' by fooling people. In fact it is a chain where a person is fooled and then he is trained to fool others to earn money. For that purpose, workshops are conducted where study and business material is provided with a jugglery of words, promises and dreams. Thus, the deceit and fraud is camouflaged under the name of e-­marketing and business."
"It has very grave and serious impact on the economic status and mental health of the people on a large scale. On considering parameters of section 438 of the Code of Criminal Procedure, I am not inclined to protect the accused. It won't be out of place to mention that such circulation is required to be stopped. It is necessary for the prosecution to take injunctive steps against this business activity, which is prima facie, illegal. Though by stopping this business, a large group of people may get financially affected, however, it will save larger groups of people from becoming prey of this activity," the Bombay HC said. 
"I have gone through the plan which is given by QNet to every individual representative (IR)," Justice Bhatkar had said. "I have gone through the statements of many witnesses, who claimed that they have been cheated under the scheme launched by QNet. I have also considered the conclusive report of Serious Fraud Investigation Agency (SFIO) under the Company Act) SFIO Prima facie, there is material to hold that the business conducted by Qnet is covered under PCMC Act and also under Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954."
"However," the Bench added, "the things are not as straight as they are perceived on the surface. Assuming that the scheme was launched with a noble object to give benefit to maximum people to make money quickly and easily by selling products of the company, however, after going through the material placed before me including the statements of the witnesses, I am of the view that in the mid­way, the intention of the applicants/ accused, who are the directors and shareholders of the company, became dubious. They had knowledge that more members are suffering financial losses and they are not satisfied with the products. The claim that the wellness products i.e., Biodisk and Chi Pendent are medicinal and spiritual products, are after all, a matter of faith. However, the applicants/ accused have launched these wellness products with ulterior motive and with correct judgment of vulnerability of the people. The holiday packages, which were sold or offered, without any choice left to the buyers. The entire business was Internet based and, therefore, the persons who are responsible i.e., the top brass i.e., the applicants/ accused, were not approachable to the persons who were aggrieved. The nature of the business was knitted in the interest of the Directors and shareholders in such a manner that the persons who are at the lower level of the pyramid cannot get any access to put up their grievances. The manner in which the persons were contacted, incentives offered, the workshops were conducted, are best examples of inducement."
Earlier in May 2016, Gurupreet Singh Anand, the original complainant in the QNet multi-level marketing (MLM) scam had demanded a detailed probe of the role played by Bollywood stars like Shah Rukh Khan, Aamir Khan, Anil Kapoor, Boman Irani and Pooja Hegde, in promoting the company. He had filed a complaint against Bollywood actor Boman Irani and his son for allegedly aiding and abetting the scam in India. In his complaint, Anand had provided details like training conducted by Mr Irani at Khandala. (Read more QNet: Complaint filed against actor Boman Irani and his son) Anand also highlighted the involvement of another actor Pooja Hegde in the QNet scam. Pooja is daughter of Latha and Manjunath (MS) Hegde and was featured in the Hrithik Roshan starrer Mohenje Daro, released this year. In August 2013, the EOW had arrested Bandra-based Manjunath Hedge for cheating in the QNet case. 
Before that in February 2016, the special Maharashtra Protection of Interest of Depositors (MPID) Court had also rejected anticipatory bail applications of these five. The Economic Offences Wing (EOW) of Mumbai Police, which is probing the case, had invoked the stringent MPID Act against controversial multi-level marketing (MLM) company QNet, which has denied any wrongdoing on its part.
Gurupreet Singh Anand, a computer consultant from Lokhandawala, Andheri in his first information report (FIR) stated that his wife was duped for Rs30,000 by some people who had introduced themselves as the independent representatives (IRs) of QNet. 
While arguing before the HC in person, he had contended that the illegal money circulation scheme is being conducted in India by changing names from GoldQuest to QuestNet to the current QNet.
Earlier, the SFIO in its detailed ‘secret’ report on GoldQuest International Pvt Ltd and Quest Enterprises India Pvt Ltd has called multi-level marketing (MLM) schemes run by overseas operators as “a potential threat to national security”. 
QNet, the controversial, Hong Kong-based operator uses multiple names for its MLM scheme and GoldQuest, QuestNet, QNet, QI Ltd and QI group are some of its better known names.
In February 2014, the ED registered a case under the prevention of money laundering act (PMLA) against QNet, Vihaan Direct Selling, Ferreira and QNet founder Vijay Eswaran and three other independent representatives (IRs) of the MLM operator.
According to Anand, the MLM scam may have cost the country about Rs7,000 crore since the money is being remitted abroad.




3 weeks ago

QNET VICTIMS please beware of this shady character one Mr. Rafiq whose posing as an "High Court Advocate & RTI Activist" at various online web sites.

This guy is a sweet talker and will promise you refund from QNET if you appoint him as an advocate, he is doing nothing but cheating your is his modus operandi...

He also claims to be behind several actions that have been taken place by mumbai police and FFVA but the FACT remains that he has nothing to do with any of these actions being taken all over India.

He will convince victims to appoint him as an ADVOCATE and thereafter tell victims to deposit Rs 50,000 in various bank accounts to show that he has been apponited.

He will promise that he will return back the money after showing that to QNET office but the FACT remains that after the money is transferred he will stop recieving your calls and vanish .

We have recieved multiple complaints against this FRAUD, please BEWARE you all have already been cheated dont get cheated again.

For your REFUNDS only follow the correct and LEGAL way to get your refunds along with compensation, for more info do drop us a email at

FFVA i.e Financial Frauds Victims Association has been formed to help and provide legal aid to victims of QNET SCAM.

Please stay away from crooks and fight for your legal rights in correct and proper way.


Ajit Duge

4 months ago

It is indeed unfortunate that Farreira got involved in this.. I still have great admiration for his Billiards game.. But then the Law is Law.....


4 months ago

Michael, vijay eswaran, all celebrities who are involved ....should be hanged till death. All are playing with words and emotions of common people who have actually made them the celebrities. These people are not only looting people, but damaging the social, cultural and financial health of people and country India.


Suketu Shah

In Reply to vimlesh 4 months ago

perfectly said.Celeb or not law shd be the same for everyone.Robbing peoples wealth is a crime .Remember Peter Graf.he was jailed for several yrs in Germany.

Monsoon ends this week, record food output likely
A "normal" monsoon and adequate water in major reservoirs nationwide, coupled with more money to agriculture, have set the stage for a record agricultural output of 270 million tonnes -- 2 per cent in excess of the government's target -- for the kharif (summer) and rabi (winter) crops of 2016.
With the southwest monsoon officially withdrawing this week, water available in 91 reservoirs nationwide is 25 per cent more than the amount available in October 2015, according to Central Water Commission data, except in Karnataka and Gujarat, which saw an 20 per cent deficit in seasonal rainfall.
Against the government target of 132 million tonnes, India is set for a kharif output of 135 million tonnes, according to preliminary government estimates; the previous highest was 131 million tonnes in 2011-12.
It also appears India will meet the rabi target of 137 million tonnes, one million tonnes more than the previous high in 2013-14.
A third of India's districts were faced with deficient rainfall in the June-August period; it now appears that Karnataka and Gujarat will be hardest hit, according to a report, 'Monsoon Granular Review' by CRISIL, a research agency.
A "double whammy" -- three successive years of deficient rainfall and poor irrigation facilities -- makes 13 districts in the two states the worst-affected in this "normal" monsoon season, the report said.
The four-month monsoon season ended within normal limits of (+/-)4 per cent of the 100-year average. The actual deficit was 3 per cent -- India received 97 per cent of normal rainfall in the June-September period -- diverging from the prediction of 6 per cent excess rainfall forecast by the India Meteorological Department (IMD) as the monsoon began.
The 91 major reservoirs monitored by the Central Water Commission are at 75 per cent capacity, equalling the average availability of the last 10 years.
"The share of distressed districts in all-India kharif production is just 1.7 per cent but the stress to agricultural household incomes could be high because a quarter of the kharif production in Karnataka and a third in Gujarat comes from the distressed districts," the CRISIL report said.
Even with Uttar Pradesh, Punjab, Haryana and Kerala getting less-than-normal rains, adequate irrigation facilities will ensure that these states are not affected as much as Karnataka and Gujarat, the report said.
With the exception of some districts in some states, the picture for India's agricultural economy looks positive due to the fact that the sowing of the summer crop has crossed the end-of-September average sowing of 102.5 million hectare to reach 107.1 million hectare.
Pulses output in the kharif season was estimated to be 8.7 million tonnes, 22 per cent more than the best of 7.1 million tonnes achieved in 2010-11, and 60 per cent more than last year's 5.5 million tonnes.
Oilseeds production is set to be 234 million tonnes, 4 per cent more than the best of 226 million tonnes produced in 2013-14.
Every monsoon -- whether it is good (above normal) or bad (below normal) -- leaves some areas inundated and some parched. In the "normal" monsoon of 2016, eight states received less than 85 per cent of normal rains.
A normal monsoon in 2013 hid 30 per cent and 23 per cent deficits in Bihar and Jharkhand, respectively.
In 2016, except for central India, the other three regions -- northwest, southern peninsular and eastern (including northeast) -- reported deficits in June-to-September rainfall.
Only four of 36 meteorological sub-divisions received more than 20 per cent above normal rainfall. Drought-stricken Marathwada and the coastal strip of Konkan in Maharashtra received 22 per cent and 21 per cent above-normal rainfall, while two divisions of Rajasthan, west and east, received 20 per cent and 32 per cent above-normal rains, respectively.
Nine divisions -- covering eight states -- of coastal and southern Karnataka, Kerala, eastern Gujarat, Punjab, Haryana, Himachal Pradesh, Assam and Meghalaya have received less than 80 per cent of the normal monsoon rain.
Twenty-three divisions-covering the whole of eastern and central India-received normal rainfall.
The north-eastern monsoon -- or the retreating monsoon, as it is called -- is set to give normal rains to Tamil Nadu, southern Karnataka, Andhra Pradesh and Orissa, according to the IMD forecast, offering relief to the distressed parts of the states.
Cotton and sugarcane, the major cash crops of India, have suffered in this season. Cotton has been planted on 83 per cent of normal cropped area, and its production is expected to be 11 per cent less than the best production of 360 lakh bales achieved in 2013-14.
Sugarcane is being cropped on 90 per cent of normal cropped area, and the season is expected to produce only 82 per cent of the best cane production of 360 million tonnes achieved till date (2011-12 and 2013-14).
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.



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