National Current Affairs

RBI extends deadline for exchanging pre-2005 currency notes till December 2015

The Reserve Bank of India (RBI) has extended the date to exchange pre-2005 bank notes till December 31, 2015 for third time.

Earlier in December 2014, RBI had set the last date for public to exchange these notes as June 30, 2015.

RBI has urged people to deposit the old design notes in the bank accounts or exchange them at a bank branch. The apex bank also has stated that the notes can be exchanged for their full value and all such notes continue to remain legal tender.

Reasons for withdrawing pre-2005 notes from circulation:

  • Security – pre-2005 notes have fewer security features as compared to 2005 and post-2005 currency notes. Thus, lesser will be the chances of its counterfeiting newer currency notes. It will also remove fake currency notes in circulation which were being pumped in Indian economy were copies of pre-2005 notes.
  • Flushing out black money – The spillover effect of the RBI’s decision will be to flush out black money. Money has value only as long as it is a medium of exchange and store of value. It loses its value when it ceases to be a medium of exchange.
  • A disincentive for cash hoarders – With the RBI’s announcement, currency hoarders will be left with no option but to liquidate their unaccounted holdings by spending or exchanging them. Thus, this is a well thought out exercise by the RBI to capture the “money flows’’ into the system and also help flush out counterfeit notes.
  • International standard practice – It is an international standard practice to remove old series notes.

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Union Cabinet gives nod to introduction of Bureau of Indian Standards Bill, 2015

Union Cabinet meeting chaired by Prime Minister Narendra Modi has approved introduction of Bureau of Indian Standards Bill, 2015 in coming session of Parliament.

The new bill seeks to replace the existing Bureau of Indian Standards (BIS) Act, 1986 with an aim to bring in more products under the mandatory standard regime and end the inspector raj.

Facts about Bureau of Indian Standards Bill, 2015

  • Add provision for establishment of statutory Bureau of Indian standards (BIS) as the National Standards Body of India.
  • The Bureau will perform its functions through a Governing Council consisting of President and other members.
  • Standardization regime: Besides articles and processes the goods, services and systems will be brought under the mandatory standardization regime in order to ensure quality products to consumers.
  • Mandatory certification regime: Empower government to bring mandatory certification regime for articles, processes or services which it considers necessary.
  • In this case certification will be from the point of view of safety, health, security, environment, prevention of deceptive practices, etc.
  • It will help consumers to receive ISI certified products and help in prevention of import of sub-standard products.
  • Simplified conformity assessment schemes: In order to allow ease of doing business, the bill allows multiple types of simplified assessment schemes.
  • It includes Self Declaration of Conformity (SDOC) against any standard which will give multiple simplified options to manufacturers.
  • Mandatory hallmarking: provisions related to compulsory hallmarking of precious metal articles.
  • Strengthening penal provisions: It will help for better and effective compliance of law and enable compounding of offences for violations.

Implications

  • Help to promote a culture of quality of products and services with a broad objective of consumer’s welfare through mandatory and voluntary compliance with Indian standards.
  • Improve enforcement of Indian standards through the process of product certification and Certificate of Conformity.
  • Promote harmonious development of the activities of standardization including marking and quality certification of goods and services.
  • It will widen the scope of conformity assessment and also enhances the penalties by making offences compoundable.

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