Discussions on with RBI over digital currency: FM
New Delhi: Finance Minister Nirmala Sitharaman on Monday said discussions with regard to central bank-backed digital currency have been going on with the Reserve Bank and a decision will be taken after due deliberations.
Sitharaman in her Budget speech on February 1 had announced that Digital Rupee or Central Bank Digital Currency (CBDC) would be issued by the RBI in the coming fiscal year. She had also announced the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.
Replying to questions after addressing the RBI's Central Board of Directors here on Monday, Sitharaman said the central bank and the government are on board regarding digital currencies. She said the discussions with the RBI regarding the CBDC were going on prior to the Budget announcement, and they are continuing.
RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government. "Whatever points we have we discuss with the government," he added.
CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency.
Moreover, the Finance Minister defended five years taken to file the first fraud complaint in the Rs 22,842 loan default by Gujarat-based ABG Shipyard, saying the time taken to detect the fraud was less than normal.
She said the loans were given under the Congress-led UPA regime and the account became a non-performing asset (NPA) in November 2013 and the debt was restructured in March 2014 by all lenders but it could not be recused.
Opposition Congress has accused those sitting in the highest echelons of power in the Narendra Modi government of complicity, collusion and connivance in what it described as "India's biggest bank fraud" - Rs 22,842 crore being bigger than the Rs 14,000 crore PNB scam by Nirav Modi and his uncle Mehul Choksi.
Asserting that a bank follows a certain process to declare an account fraud, Sitharaman said banks almost take 52-54 months to complete intensive work before a decision is taken.
"In this particular case (ABG Shipyard)...I should say to the credit to the banks, they've taken lesser than what is normally an average time to detect these kinds of frauds...Normally, it takes I said 56 months and off-late it is taking far lesser time to detect such things," she said after customary post Budget address to RBI board members here.
State Bank of India (SBI) in a statement on Sunday stated that the loans given to ABG Shipyard had become NPA on November 30, 2013, but after a failed debt restructuring, it was "classified as NPA in July 2016 with backdated effect from November 30, 2013."
Congress has questioned why the government took five years after the liquidation proceedings of ABG Shipyard to lodge an FIR in connection with the alleged duping of 28 banks.
According to SBI, the first complaint was filed with CBI in November 2019 and "a fresh and comprehensive second complaint was filed in December 2020." E&Y was appointed as forensic auditor by lenders in April 2018 and they submitted their report in January 2019. E&Y report was placed before the Fraud Identification Committee of 18 lenders in 2019.
