Right to Information
RBI cannot withhold information under RTI citing ‘fiduciary relations’: SC
“The RBI as a Watch Dog should have been more dedicated towards disclosing information to the general public under the Right to Information Act,” remarked the SC judges 
 
In a landmark judgement, the Supreme Court on Wednesday said, the Reserve Bank of India cannot withhold information citing 'fiduciary relations' under the Right to Information (RTI) Act.  The apex court also said, the Central Information Commission (CIC) has considered elaborately the information sought for and passed orders which in its opinion do not suffer from any error of law, irrationality or arbitrariness.
 
Hearing a set of transferred cases, a Division Bench of Justice MY Eqbal and Justice C Nagappan said, "From the past we have also come across financial institutions which have tried to defraud the public. These acts are neither in the best interests of the Country nor in the interests of citizens. To our surprise, the RBI as a Watch Dog should have been more dedicated towards disclosing information to the general public under the Right to Information Act. We also understand that the RBI cannot be put in a fix, by making it accountable to every action taken by it. However, in the instant case the RBI is accountable and as such it has to provide information to the information seekers under Section 10(1) of the RTI Act."
 
"In the instant case, the RBI does not place itself in a fiduciary relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional 'fiduciary' label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect," the Bench said.
 
Coming down heavily on the Reserve Bank the apex court said, RBI is supposed to uphold public interest and not the interest of individual banks. It said, "RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein."
 
"It had long since come to our attention that the Public Information Officers (PIO) under the guise of one of the exceptions given under Section 8 of RTI Act, have evaded the general public from getting their hands on the rightful information that they are entitled to.”
 
“And in this case the RBI and the Banks have sidestepped the General public’s demand to give the requisite information on the pretext of 'Fiduciary relationship' and 'Economic Interest'. This attitude of the RBI will only attract more suspicion and disbelief in them. RBI as a regulatory authority should work to make the Banks accountable to their actions," the SC Bench observed.
 
The Counsel for RBI has argued that the central bank carries out inspections of banks and financial institutions on regular basis and the inspection reports prepared by it contain a wide range of information that is collected in a fiduciary capacity. TR Andhyarujina, the senior counsel for RBI contented that, under the Banking Regulation Act, 1949, the Reserve Bank of India has a right to obtain information from the banks under Section 27. He said, “These information can only be in its discretion published in such consolidated form as RBI deems fit. Likewise under Section 34A production of documents of confidential nature cannot be compelled. Under sub-section (5) of Section 35, the Reserve Bank of India may carry out inspection of any bank but its report can only be disclosed if the Central Government orders the publishing of the report of the Reserve Bank of India when it appears necessary."
 
Rejecting the contentions of RBI, the Bench said, "The baseless and unsubstantiated argument of the RBI that the disclosure would hurt the economic interest of the country is totally misconceived. In the impugned order, the Central Information Commission (CIC) has given several reasons to state why the disclosure of the information sought by the respondents would hugely serve public interest, and non-disclosure would be significantly detrimental to public interest and not in the economic interest of India. RBI’s argument that if people, who are sovereign, are made aware of the irregularities being committed by the banks then the country’s economic security would be endangered, is not only absurd but is equally misconceived and baseless."
 
"The exemption contained in Section 8(1)(e) applies to exceptional cases and only with regard to certain pieces of information, for which disclosure is unwarranted or undesirable. If information is available with a regulatory agency not in fiduciary relationship, there is no reason to withhold the disclosure of the same. However, where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship. As in the instant case, the Financial institutions have an obligation to provide all the information to the RBI and such an information shared under an obligation/ duty cannot be considered to come under the purview of being shared in fiduciary relationship. One of the main characteristic of a Fiduciary relationship is 'Trust and Confidence'. Something that RBI and the Banks lack between them," the Divisional Bench said in its order.
 
While denying the information sought by respondents, the banks have cited Section 8(1)(a)(d) and (e) of the RTI Act. 
 
“8. Exemption from disclosure of information.—
(1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,—
(a) information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence;
(b) information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court; 
(c) information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature;
(d) information including commercial confidence, trade secrets or intellectual property, the disclosure of which
would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;
(e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;
 
The Supreme Court said, section 2(f) of the RTI Act, clearly provides that the inspection reports, and documents fall under the purview of "Information” which is obtained by the public authority (RBI) from a private body. 
 
Section 2(f), reads thus:
“information” means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force; 
 
The Bench said, from reading of the above section it can be inferred that the Legislature’s intent was to make available to the general public such information which had been obtained by the public authorities from the private body. Had it been the case where only information related to public authorities was to be provided, the Legislature would not have included the word “private body”. As in this case, the RBI is liable to provide information regarding inspection report and other documents to the general public, the Bench said.
 
The apex court said, "Even if we were to consider that RBI and the Financial Institutions shared a 'Fiduciary Relationship', Section 2(f) would still make the information shared between them to be accessible by the public. The facts reveal that Banks are trying to cover up their underhand actions, they are even more liable to be subjected to public scrutiny."
 
"We have surmised that many Financial Institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny. It is the responsibility of the RBI to take rigid action against those Banks which have been practicing disreputable business practices," the Supreme Court said, while upholding the decisions given by CIC.
 
"...given our anxious consideration to the matter and came to the conclusion that the Central Information Commissioner has passed the impugned orders giving valid reasons and the said orders, therefore, need no interference by this Court," the Bench concluded.
 

In most of the transferred cases, Shailesh Gandhi, former Central Information Commissioner, while directing the RBI to provide information sought by applicants, has rejected the central bank's contention of 'fiduciary relation' for denying information.

 

Here is the link to the RTI Judgement Series based on orders passed by Mr Gandhi as Central Information Commissioner.

 

All India Bank Employees Association (AIBEA) has welcomed the SC decision about asking RBI and banks to provide full information under the RTI Act.

In a statement, Vishwas Utagi, Senior Vice President, AIBEA, said, "It is a landmark judgement in favor of common man. We salute Shailesh Gandhi, former CIC who directed RBI to publish list of wilful loan defaulters. We from AIBEA defied RBI in last 20 years and published the list by holding the press conference and demanded wilful loan default be treated as cognizable offence under Indian Penal Code (IPC) to break banker- borrower nexus. AIBEA has always stood for the right of the depositors in India, to know the end use of their money in banks lending and investments which is greatly defaulted in recent years which is virtually a public loot by top corporates."

 

Similarly, the Indian National Bank Employees' Federation (INBEF) also welcomed the apex court judgement.

Subhash S Sawant, General Secretary of INBEF, in a statement said, "On behalf of the struggling bank employees throughout the country, we heartily welcome and salute the timely observation of the Supreme Court that the RBI is under the purview of the overarching RTI Act and hence bound to divulge business details of all banks, including the financial regulator's audit reports and list of defaulters."

"No doubt, the historical judgement given by Justice MY Eqbal and Justice C Nagappan if implemented, will fetch relief to the country's economy which is reeling under the menace of huge non-performing assets (NPAs) and may cry a halt to the looting of public funds by some unscrupulous businessmen," he added.

 

Here are some of the decisions, annouced by Mr Gandhi, while serving as Central Information Commissioner under the RTI Act, and upheld by the Supreme Court...

 

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COMMENTS

Gopalakrishnan T V

1 year ago

Transparency is essential but what is required to be made transparent definitely calls for discretion and should serve the purpose.The Supreme Court's ruling to make the Reserve Bank to provide information under RTI Act without reservations weakens RBI, RBI Act 1934, BR Act 1949 and does not necessarily strengthen the RTI Actas such.It dalso does not serve any purpose particularly in understanding the weaknesses in the Regulation and Supervision of banks and the reasons behind the ever increasing bad debts of banks particularly in the Public Sector Banks. The Reserve Bank has a unique role and responsibility in maintaining the stability of the Financial system and the rupee value which essentially calls for the continued maintenance of trusts among the saving community in the banking and financial system which cannot be disturbed by the actions coming out of certain hasty moves. While the need to have the details of all defaulting borrowers is understandable and this in fact is available with the CIBIL, why the RBI should disclose the names and findings of Inspection reports is not understandable.Many of the borrowers turn bad and the reasons if any for such a state of affairs are the requirements under RTI act, the banks and the Government Directors on the Banks Boards who are having the information can be compelled to disclose the information under RTI Act. The RBI can at best be asked to provide as to why the credit portfolio is becoming weak and the role of banks Boards and the role of Government and other individual nominees in weakening the credit portfolio.

REPLY

MG Warrier

In Reply to Gopalakrishnan T V 1 year ago

Please allow me to share my response to an article in Business Standard on questions under RTI answered by PMO:
With reference to Nivedita Mookerji's article, "Off day doesn't figure in Modi's lexicon" (Business Standard, December 19), the approach of the Prime Minister's Office to questions raised under the Right to Information (RTI) Act, as listed in the article, deserves appreciation.

The RTI Act has been a milestone in the democratic process of governance in India. Next only to Question Hour in legislatures, the Act has helped improve transparency in the working of government and other organisations.

But last week's Supreme Court verdict that affects the Reserve Bank of India and some other banks, and Mookerji's report, which gives an idea about the kind of questions that are raised under RTI, make one feel that there is little clarity in the minds of people, who use the powers of the Act. A couple of issues need further debate.

While citizens' right to information has to be protected at any cost, this right cannot override laws enacted before and after Independence. I am referring to the impression being created after the top court's verdict about making public information obtained by regulators and supervisors of institutions. In such cases, the provisions relating to secrecy in statutes should be revisited.

The extent to which such information is shared, the manner in which it is shared and with whom should be clarified. This should not be confused with provisions of the RTI Act or powers of the central information commissioner (CIC).

The type of questions under the RTI that the PMO has had to field borders on abuse of provisions of the Act. To arrest this trend, the CIC could consider allowing government departments and statutory bodies to transfer questions, which prima facie are of a probing nature and have no direct relevance to their working, to the CIC. The CIC may screen such questions in a time-bound manner and send back the questions that need to be answered to the departments.

M G Warrier Mumbai

Meenal Mamdani

In Reply to MG Warrier 1 year ago

Thank you Mr. Warrier.
Your replies are comprehensive and stated in a language devoid of jargon.
I am so glad that knowledgeable people like you take the trouble to write in a public forum.
All of us who like to spout our wisdom or lack thereof can learn a lot from you.

Subramani P K

1 year ago

The apex court by this judgement has made it clear that the public should get all the information & transparency is of paramount importance in banking business. As a regulatory authority RBI should have clear & perfect control on the monetary transactions of all banks private/public as a safe guard for public funds against any fraud. This will curtail the clandestine transactions of banks and ensure safety of public investments.

Mahesh S Bhatt

1 year ago

Congratulations to Shailesh Gandhi & all team for getting this landmark judgement.

Hope our banking system withstands this information jolts.

Merry Teri Christmas & Happy New Year 2016.

Mahesh

REPLY

Mahesh Khanna

In Reply to Mahesh S Bhatt 1 year ago

Shailesh has done a marvelous job resulting in lifting of veil. I hope RBI will also provide the inspection reports of its own departments which has been denied under the fiduciary clause to escape revealing malpractices in the Apex bank.

Zakir Hussein Inamdar

1 year ago

Great, hats off to all the people who fought for this cause more particularly AIBEA and the present era Shailesh Gandhi and the H'ble Judges for this brave and finest judgment, but RBI and Banks certainly try to find holes in the judgement, I am afraid the co-operative banks (most of these banks are already in financial bungling)are not covered under RTI will escape some thing should be done.

MG Warrier

1 year ago

Please also see today's (December 18)Economic Times editorial on the subject. My response copied below:
December 18, 2015
RTI and RBI
This refers to ET editorial “Why Turn the RTI Heat on the RBI?” (December 18). The short editorial excellently brings out the implications of the ‘landmark’ judgment of the Apex Court mainly affecting RBI’s role as regulator and supervisor of the financial sector. Though it is for the government and enlightened citizens to interpret and use the judgment in the right spirit, in public interest, reading too much into the rights ignoring the statutory responsibilities vested in institutions can be hazardous. The Supreme Court’s observations like, “The facts reveal that as banks are trying to cover up their underhand actions, they are even more liable to be subjected to public scrutiny” should open the eyes of both government and the institutions and they should, by infusing transparency in transactions, avoid similar indictments in future.
Our legal framework, which has British origin and has not yet been ‘democratised’, insulates masters against action by servants and institutions (both in private and public sector) from litigations by clientele in several situations. Beyond citizen’s right to information, transparency issues in the conduct of statutory bodies and government departments which enjoy certain rights and privileges because of the nature of responsibilities entrusted to them need to be addressed.
The temptation on the part of government to bring in ‘ownership rights’ or on the part of regulators and supervisors to take shelter under provisions of the statute book meant to protect institutions and their clientele from embarrassment in exceptional situations, in a routine manner, should be avoided.
The observations of the Apex Court goes much beyond the issue of parting with information under RTI Act. Without fighting this from a mere legal or prestige angle to protect the image, by falling back on the secrecy clauses, RBI and other institutions need to go by the spirit of the observations by the highest court.
A quick gesture could be to initiate measures to make public, information the central bank comes into possession and considers useful for banks’ clientele in deciding their relationship with individual banks. The suggestion is not to make public all information collected during the inspection of banks, but to keep depositors and borrowers informed about the health of banks and educate them about the practices and procedures followed by individual banks which can result in erosion of the trust their clientele repose in them keeping the control the central bank has over their operations. If legal provisions stand in the way, they should be got amended, as ‘ease to do business’ include information about the profile of the institution with which a customer deals.
M G WARRIER, Mumbai

REPLY

Meenal Mamdani

In Reply to MG Warrier 1 year ago

Mr. Warrier has explained the issues so well that even people like me who do not know the intricacies of the various statutes, feel that we have grasped the crux of the matter.
Thank you Mr. Warrier

Mahesh Khanna

1 year ago

Under the RTI, RBI is not providing internal audit or inspection report of the Inspections conducted by the inspection department on the grounds that the report is held in fiduciary relation. about Two years ago it was provided, but now suddenly they have come up with a novel method of denying the same under the fiduciary clause.Either the earlier CPIO who provided the reports had poor knowledge of the RTI Act or the present CPIO who has denied has poor knowledge of RTI. The earlier reports had revealed the malpractices or corruption prevailing in the said report and hence it appears RBI has started taking shelter on the grounds of the report being held in fiduciary relation and thus denying the same..

Ramesh B Mhadlekar

1 year ago

I have documents from Ministry of Finance under the RTI, where the RBI is refusing to provide all the perquisites /allowances to the GOI which is leading to delay in opening of pension options and updation of pension in RBI on the lines of Central Government and the Unions are fooling the members by stating that the Govt. is not agreeing to update pension nor agree to give another pension option to CPF employees opening of pension. Such fooling the members of union and resorting to illegal strike speaks the affairs of the Central bank of the country.
But I am shocked that the Min. of finance is requesting again and again to provide the details of the perks and allowances and the sanction authority for the said perks which is being evaded by RBI and thus can be concluded the weakness of Min. of Finance.
Hence, it is not surprising that information is denied by RBI under the RTI. They are not transparent in the mater of giving details of their foreign tours of the executives, legal expenses incurred by the bank in courts etc etc. Mr. Raghuram Rajan talks of non transparency in the country, but he himself does not believe in transparency. There is a saying that darkness is always prevalent under a lamp and the same is prevailing in RBI. They want others to be transparent but they do not believe in transparency themselves.

They do not ant their Service regulation to be statutorised which is mere an administrative circular, which if passed by the Parliament and notified in the gazette would be a clip the wings of those who abuse powers for their selfish ends.

REPLY

Suketu Shah

In Reply to Ramesh B Mhadlekar 1 year ago

Raghuram Rajan needs to go and fast.Whatever people might say,the truth is whatever Dr Swamty says is true.For India to progress Rajan has to go-long overdue.

Mahesh Khanna

In Reply to Suketu Shah 1 year ago

Mr. Warrier being an ex officer of RBI will have soft corner for RBI and defend the non transparency act of RBI,because once upon a time he was part of the Management.

MG Warrier

In Reply to Mahesh Khanna 1 year ago

Mahesh
in a way, you may be right. Still, I invite you to read my dozens of article available @moneylife.in and also visit my blog @mgwarrier.blogspot.in or access several letters at business standard website. Chances are, you may further 'qualify' your views about me. Happy to find that some readers keep track of the profile of people who post comments here. The awareness about such a possibility make us more responsible and force us to maintain consistency in our views. I was only a SEVAK in RBI.

MG Warrier

In Reply to Suketu Shah 1 year ago

Which Swamy? What did he say? Was it about RTI or transparency orabout this SC decision? Or, is this the space to list people whom one does not like, for whatever reason?

Suketu Shah

In Reply to MG Warrier 1 year ago

Dr Swamy said many months ago Rajan has to go and he is dead right.I resectfully agree to disagree incase yr views are different.

Ramesh B Mhadlekar

In Reply to Suketu Shah 1 year ago

I agree he is pretending to be transparent he comments on intolerance but he cannot tolerate seeking information against corruption of RBI officials.During his regime there is a secretive and private recruitment of class IV employees contrary to the Art.14 and 16 of the Indian constitution and decisions of Supreme Court.I agree the faster he goes it will be in the interest of country.

Peruvemba Subramanian Ramachandran

1 year ago

Atleast there is one Gandhi in India who wants satyam in the open; unlike the others who assume Gandhi'। name by deceit and therefore it is their passport to truth and therefore above truth and questioning.

Meenal Mamdani

1 year ago

Excellent judgement. We are blessed to have such justices who look after the common man and do not allow bank officials to hide behind "legalese".

D S Ranga Rao

1 year ago

Most landmark and far reaching judgement ever given by the apex court to save public interest and to checkmate the ever growing irresponsibility and unaccountability of even the nationalized banks. Congratulations to Mr. Shailesh Gandhi he has been vindicated once again by this ruling. But at this rate, how long more we should wait to see our national institutions to get proactive in public interest without getting raps on their knuckles time and again?

REPLY

Shirish Sadanand Shanbhag

In Reply to D S Ranga Rao 1 year ago

I fully agree with the views expressed by Mr. Ranga Rao.

SuchindranathAiyerS

1 year ago

Is this the Indian Supreme Court speaking? The presiding court of an edifice that covers up insouciance, incompetence, prejudice and corruption under opacity, non accountability and disregard for law, evidence, facts and laid down procedures?

MG Warrier

1 year ago

The Supreme Court’s observations quoted here are of great significance, not only because they relate to citizen’s rights, but in the context of transparency issues in the conduct of statutory bodies and government departments which enjoy certain rights and privileges because of the responsibilities entrusted to them. Right from some constitutional provisions (like the one under Article 311(2) C ) to powers to penalise institutions supervised by statutory bodies, need to be applied/exercised in a transparent manner with public interest in view. The temptation to bring in ‘ownership rights’ or to take shelter under provisions of the statute book meant to protect institutions from embarrassment in exceptional situations in a routine manner should be avoided.

REPLY

Shirish Sadanand Shanbhag

In Reply to MG Warrier 1 year ago

To penalize erring Government servants is clearly stated under Article 311, and under Article 311(2)(c), it gives full power to the President and the Governors to remove the Govt. Servants (top babus)without holding the inquiry, in the interest of the State.
Hardly this provision is used by them in our country.

MG Warrier

In Reply to Shirish Sadanand Shanbhag 1 year ago

I know cases where the provision was used to 'victimise' employees. Such things are easily forgotten, as media has no 'breaking news' value.

D S Ranga Rao

In Reply to Shirish Sadanand Shanbhag 1 year ago

Yes, the Art. 311(2)(c) is not justiciable. Though sparingly used for genuine purposes, it has been one of the most abused provisions to ease out government servants found inconvenient to the ruling establishment.

Shirish Sadanand Shanbhag

In Reply to D S Ranga Rao 1 year ago

I have not seen either President of India or any State's Governor to use Article 311(2)(c) to remove any corrupt Baboos at any time.
Then, how do you say this provision is sparingly used?

US Fed rate hike: India is prepared but not immune, says report
If the normalisation cycle of the US interest rates is accompanied by a stronger dollar, higher real rates or a bout of weak foreign sentiment, India’s unfavourable external debt profile would emerge as a source of concern
 
Markets put the odds of US rate lift-off this week at over 70%. A 25 basis points (bps) hike is thus largely priced in but guidance on the pace of normalization next year will dictate market reaction. Although, India is prepared for the possible rate hike by the US Federal Reserve (Fed), the markets are unlikely to be immune to volatility, says a research note.
 
According to a research report from DBS Bank Ltd, Indian markets were volatile back in 2013 when the US Fed signalled tapering of quantitative easing (QE) purchases. "This time around, the Fed is at the cusp of tightening policy, though at a slower pace than in the 1993-94 and 2004-06 hiking cycles. Risks of a stronger dollar accompanied by a rise in US real rates are under watch. If this materializes, India will face pressure on current account funding needs and weakened external debt profile. India’s current account balance has improved significantly but reserves remain low and debt high," the report says.
 
 
Rising FDI flows provide stable source of financing
DBS said, low commodity prices have improved India’s terms of trade, which should help keep the current account deficit below 2.0% of GDP for a third consecutive year. A past IMF study pegged India’s sustainable current account deficit at a range of 1.5-2.5% of GDP, based on assumptions.
 
In nominal terms, the deficit has shrunk to $28 billion in FY14-15 from $88 billion in FY12-13. Funding needs have accordingly moderated, with net foreign direct investment (FDI) at $33 billion in FY14-15 sufficient to fund the current account gap on its own. In other words, the basic balance of payments (current account deficit plus net FDI) continues to improve. The basic balance recovered to 1.2% of GDP in first half of 2015 from -0.2% in 2014.
 
"Given the recent relaxation in FDI ceilings in insurance, banking, construction, defence and civil aviation etc., inflows are expected to strengthen. The emphasis on ease of doing business coupled with the government’s efforts to forge deeper international ties will also be a shot in the arm for investment flows," the report said.
 
"Moreover," it added, "foreign holdings of government bonds is capped at 5% of the outstanding issuance (in Indian rupee terms), limiting exposure to hot-money flows. With higher FDI providing a more stable source of financing the current account gap, reliance on short-term flows has eased. This has provided a cushion against external volatility.
 
According to DBS, the Reserve Bank of India (RBI) remains concerned about US interest rate normalization and this has prompted the central bank to focus on building a stronger foreign reserves buffer and maintain macro-stability.
 
Capitalizing on the favourable market environment, the RBI has absorbed capital inflows and rebuild its foreign reserves. Reserves bottomed at $275 billion in August 2013 at the worst point of the US taper tantrum and were up to a record high of $355 billion by June 2015. Since then, effort to contain rupee depreciation has trimmed the reserves stock by $3-4 billion. This is a modest fall compared to the nearly $80 billion increase over the past two years.
India’s import cover (reserves vs months of imports) at eight-nine months is higher than the global norm of three times and consistent with the three to seven times seen across most developing countries, the report says.
 
Higher reserves but higher liabilities too
Although foreign exchange reserves have risen, DBS said, India’s foreign debt and other liabilities has also risen. Liabilities have primarily taken the form of higher foreign portfolio investments (up $50 billion in September 2013 to June 2015) alongside increase in short-term credits and offshore borrowings. Non-resident deposits are also up another $16 billion, receiving a hand from the RBI’s concessional swap arrangement in late-2013. 
 
This has left India’s net international investment position (NIIP) in the red (Chart 5). The NIIP widened to $366 billion in March 2015 from $63 billion in March 2007. On the assets side, reserves amounted to $343 billion by March 2015. But this is counterbalanced by a sharp rise in liabilities in the form of portfolio inflows at $228 billion and short-term credits worth $83 billion.
 
 
Additionally offshore loans also climbed to $177 billion by March 2015, which cumulatively surpass the foreign reserves stock. In sum, even though authorities have focused on building buffers against external headwinds, its composition could be at risk if the global environment worsens, the report from DBS says.
 
Rupee to remain under pressure
Like most emerging market currencies, DBS feels the Indian rupee is vulnerable to higher US interest rates. 
 
"We believe the Indian rupee will follow a managed depreciation path into 2016, driven by a stronger dollar bias and domestic developments. This case is also strengthened by our long-held view that sharp Indian rupee appreciation on real basis will see the authorities tolerate bouts of rupee weakness against the dollar (Chart 7, next page). The need to preserve competitiveness and support the 'Make in India' manufacturing push will be a priority, whilst ensuring that the inflationary impact is contained," it concluded.

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NHAI to raise up to Rs1,000 crore
It can retain oversubscription of Rs9000 crore. The NHAI bonds proposed to be issued have been rated ‘IND AAA’ by IRRPL, 'CARE AAA’ by CARE,  "[ICRA] AAA” by ICRA and ‘CRISIL AAA/Stable’ by CRISIL, according to a press release from NHAI
 
National Highways Authority of India (NHAI) plans to raise funds through public issue of tax-free, secured, redeemable non-convertible bonds with the face value of Rs1,000 for an amount of Rs1,000 crore with an option to retain oversubscription of up to additional Rs9,000 crore aggregating up to a total of Rs10,000 crore, according to a press release from the company.
 
The interest income on bonds is exempted from levy of income tax in the hands of the investors as per the notification issued by the Central Board of Direct Taxes.
 
The coupon rate for Category I, Category II and Category III investors i.e. Qualified Institutional Buyers, Corporates and High Net worth Individuals will be 7.14% and 7.35% for tenures of 10 years and 15 years respectively in Series IA and series IIA.  The coupon rate for Category IV investors i.e. Retail Individual Investors will be 7.39% in Series IB and 7.60% in Series IIB for tenures of 10 years and 15 years respectively (i.e. Retail Individual Investors are being offered 0.25% more than other category of investors for bonds of corresponding tenure).
 
The bonds are proposed to be listed on the BSE Limited and NSE. The Bonds proposed to be issued have been rated ‘IND AAA’ by IRRPL, 'CARE AAA’ by CARE, "[ICRA] AAA” by ICRA and ‘CRISIL AAA/Stable’ by CRISIL.
 
The issue opens on 17 December 2015 and is scheduled to close on 31 December 2015.

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