RBI package to check sliding rupee

MUMBAI, Aug 20 (PTI) — Reserve Bank of India RBI today announced a package of measures including a hike in CRR and increase in repo rates to check the sliding rupee.

The ratio of cash reserves to be maintained by the bank as a percentage of their liabilities or the cash reserve ratio (CRR) has been raised by 1 per cent to 11 per cent with effect from August 29. This would suck around Rs 7000 crore of excess liquidity from the banking system.

The repo rate, another instrument introduced in November 1997 to absorb the surplus liquidity in the banking system in volumes necessary to bring order in both money and forex markets, has been raised by 3 per cent to 8 per cent.

Repo rate is the rate at which the central bank sells repurchase agreements of government bonds and also acts as a floor in the call money market.

The central bank has also withdrawn the facility of rebooking cancelled contracts for trade related transactions covering imports.

At present the importers are allowed to cancel their forward cover on their import contracts and rebook them.

The RBI also disallowed the corporates from splitting the spot and forward leg of their transactions when they cover their dollar requirements for imports, having noticed its misuse.

The foreign institutional investors have been allowed to take forward cover in equity markets to the extent of value of their investments as on June 11 1998.

FIIs were allowed to take forward cover for incremental value of their equity investments from June 11 1998.

While withdrawing rebooking of cancelled contracts for imports, the RBI has maintained the facility of roll over of forward contracts on or before maturity.

The RBI also clarified that the rebooking of cancelled contracts will continue to be available for exporters.

In addition to the present reporting of end of day position to the RBI, banks have now been advised to report at close of business every day their open position as at 10 a.m. as also their peak intra-day position.

The RBI also removed some restrictions on the export earnings foreign currency (EEFC) accounts by allowing the exporters to use the balances in these accounts for any business related payments in India and abroad at their discretion including airfare and hotel expenditure.

The exporters are at present permitted to use the balances in these accounts only to pay for current and capital account transactions abroad.

The RBI said that it will consider extension of time limit for repatriation of export proceeds by exporters in exceptional cases where the delay is caused by external circumstances.

The RBI has warned that if there is evidence of wilful delay in repatriation of export proceeds, it may on a case-by-case basis reduce the entitlement to withdraw the facility of maintaining an EEFC account.

Gill’s sentence upheld but diluted
Tribune News Service

CHANDIGARH, Aug 20 — The Punjab and Haryana High Court today upheld the conviction of former Director-General of Punjab Police, Mr K.P.S. Gill, for outraging the modesty of Mrs Rupan Deol Bajaj, a senior Punjab cadre I.A.S. officer.

Mr Justice R.L. Anand, who handed down this order, however, modified the lower court judgement releasing Mr Gill on probation for three years under the supervision of a probation officer. The judge reduced the period of probation from three years to one year and that too without the supervision of the probation officer.

Mr Justice Anand upheld the amount of compensation of Rs 2 lakh the lower court had ordered Gill to pay to Mrs Bajaj. He, however, modified the order of the Sessions Judge directing him to pay Rs 50,000 as litigation costs. Out of this a sum of Rs 25,000 was to be paid to the Chandigarh Administration and the remaining Rs 25,000 to Mr B.R. Bajaj. The judge set aside the cost of Rs 25,000 that was to be paid to Mr Bajaj.

Asked about his reaction to the High Court order, Gill said: "I do not react to judicial pronouncements. I shall contest this order in the Supreme Court."

Reacting to the high court judgement, Mrs Bajaj said: "I feel that probation without supervision is no punishment."

Seeking the judge's permission yesterday to argue her case, Mrs Bajaj had told the court that certain offences contained in the I.P.C. were "gender-specific offences". These were different from general offences and were applicable to both men and women. She told the court that there was no definition of modesty in the I.P.C. "Modesty" was defined for the first time in her case by the Supreme Court. If this offence is proved, then the punishment could not be diluted.

The incident which led to outraging of Mrs Bajaj's modesty dates back to July 18, 1988, at a party hosted by Mr S.L. Kapoor, the then Financial Commissioner (Home), Punjab, at his residence in Sector 16.

Although the high court had quashed the F.I.R. lodged by Mrs Bajaj with the Chandigarh police, the Supreme Court had on October 12, 1995, ordered Mr Gill's prosecution on the charge of outraging the modesty of Mrs Bajaj.

The case was first tried by the Chief Judicial Magistrate of Chandigarh. He had convicted the former Punjab Police Chief under Sections 354 and 509, I.P.C., and had sentenced him to undergo imprisonment for three months.

Mr Gill had contested the CJM's order before the Sessions Judge, who had upheld the conviction but had modified the sentence. He had ordered Mr Gill's release on probation for three years.