Archive for April 5th, 2017

Where is the currency going? Why are ATMs dry?

April 5, 2017

The cash crunch is back. There are again news of bank branches/ATMs showing no cash option. Though, as cash moved into deposits during the demon, banking system liquidity is high. It is all so ironical.

Coming back to cah crunch, Sucheta Dalal wonders what is going on?

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Richmond Fed President Jeff Lacker resigns over leaking sensitive Fed information…(brain fade moment?)

April 5, 2017

It was shocking to read this early morning. Richmond Fed President Lacker resigned over leaking sensitive information to a private player:

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From being world leader in economic surveys, India is now facing a serious data problem…

April 5, 2017

I was just reading this piece by Abhijit Banerjee on decline of higher quality education in India. Though it is on general education, much of is related to economics education in India.

Whereas in the 1950s and 60s good teaching jobs were scarce, and many talented people had to settle for ill-paying part-time jobs in obscure private colleges, finding competent teachers is a major problem these days, and very few places even aspire to attract world-class talent. Even prestigious institutions like the Delhi School of Economics have many unfilled slots.
It is tempting to blame the explosion of institutions. There are of course many more colleges, universities and institutes, which is why places like Presidency University (the erstwhile Presidency College) are now struggling. In 1959 they used to have the pick of the talent; now they have to compete for them against upstarts that are often able to pay much more (more about that later) and offer better working conditions.
But if you think about it, this cannot explain why the entire system is short of talent. After all, the fact that we have so many more institutions also means that we are producing vastly more graduates and each such person is a potential academic, a possible Nobel Prize winner in the making. The same factors that increased the demand for higher education should, in principle, also increase the supply of outstanding researcher-teachers? Why haven’t they?

In another article (HT: Niranjan), Prof Banerjee along with three more economists deplores the decline in statistics systems in India:

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What happened to Pakistan based Banks (West and East) during the Partition in 1947?

April 5, 2017

This question has fascinated me for a while.

During India’s partition, there were mainly two parallel forces at work. One was that of partition of India into two countries. Second was integration of British Indian Union with Princely States. These political fores partition impacted economic and financial developments as well. This blog is more interested in financial history/developments as there is hardly any emphasis on the same.

In terms of integration with princely states, the issue was of State Associate Banks. This blog looked at fascinating history of these State Banks which were 54 in number! How government and RBI integrated these banks which had varied structure is quite something.Out of 54 banks, just five remained. These banks were lately in news for their merger with SBI. With them goes the fascinating history as well. In case of Hyderabad, the integration also involved a monetary union of sorts as the State had its own currency (will blog about the exchange ratio soon).

Let us now look at the partition side of the story. Here, the case was of division of banks’ assets and liabilities.

There were two types of banks here:

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