Did you know Reserve Bank of India once printed currency for Pakistan? State Bank of Pakistan acknowledged by..., UAE, Oman also...
Reserve Bank of India
New Delhi: The Radcliffe Line refers to the boundary drawn by British lawyer Sir Cyril Radcliffe during the 1947 partition of British India. This line divided the provinces of Punjab and Bengal into two separate territories: India and Pakistan. The partition was a result of the Indian Independence Act of 1947, which aimed to create two independent nations, India and Pakistan, based on religious lines.
But did this Radcliffe Line actually provide the resources both countries truly needed? In fact, the British man who drew this line, Radcliffe, had never even visited India. After the partition, Pakistan especially lacked essential resources. In such a situation, it was India that extended full support.
Since 1947, India has provided a slew of assistance to bankrupt Pakistan. The Reserve Bank of India even printed currency notes for its neighboring country between August 1947 and September 1948. At the time of Partition, Pakistan had no infrastructure.
According to a media report quoting Quora.com, current affairs commentator Aamir Khokhar wrote that Pakistan was unable to establish a central bank. It was then decided that the Reserve Bank would function as the state bank for both India and Pakistan. Since the Reserve Bank already existed in India, it helped Pakistan without any hesitation. State Bank of Pakistan Acknowledged the Role
It is important to note that the official website of the State Bank of Pakistan has acknowledged the services of the Reserve Bank of India. In 1947, during the India-Pakistan partition, the Reserve Bank of India acted as the central bank for both countries. Soon after the partition, the Reserve Bank of India took the responsibility of currency circulation since establishing a central bank in Pakistan was not an easy task.
According to media reports, the State Bank of Pakistan states that the Governor-General of undivided India issued the 'Pakistan (Monetary System and Reserve Bank) Order, 1947' on 14 August 1947. This order stated that until a central bank was established in Pakistan, the RBI would handle all currency-related matters.
Until September 30, 1948, the Reserve Bank was made the common authority for both India and Pakistan. In this way, until 30 September 1948, the RBI fulfilled all of Pakistan's financial needs and managed its monetary system. RBI Printed Notes for These Countries Too
The Reserve Bank of India not only printed notes for Pakistan but also for several Gulf countries like the UAE, Oman, and Bahrain. This practice continued until 1967, and until then, the Gulf countries used the Indian Rupee.
It is also recorded in the history of the RBI that it printed currency notes for Pakistan for nearly a year. At that time, the Reserve Bank had an office in Lahore, which was later closed down.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hans India
an hour ago
- Hans India
Trade Setup for June 6: Nifty eyes RBI cue to breakout towards 25,000+
Indian equities saw a volatile but rangebound session on June 5, with the Nifty 50 closing at 24,751, up 131 points. Despite midday gains of nearly 200 points, the index gave up most of them before ending higher. Support at 24,500 remains strong, keeping the bullish bias intact. 🔑 Key Technical Levels Support: 24,500 Immediate Resistance: 24,900 Breakout Trigger: Sustained close above 24,900 could open doors to 25,000+ 🏦 Eyes on RBI Markets are pricing in a 25 bps repo rate cut by the RBI on June 6 — the third cut this year. A deeper cut could spark bullish sentiment and push Nifty past its current ceiling. 💹 Sector & Stock Highlights Outperformers: Realty, Pharma, Healthcare Underperformers: PSU Banks, Auto, Media Top Gainers: Eicher Motors, Trent, Dr Reddy's Top Laggards: IndusInd Bank, Tata Consumer, Axis Bank Buzzing Stocks: Reliance Industries (+1%) on JPMorgan upgrade DLF, Godrej Properties on continued realty rally Hindustan Zinc (+6%) amid record silver prices 📊 Broader Market Trends Nifty Midcap 100: +0.53% Nifty Smallcap 100: +0.96% (4-month high) 📉 Analyst Views Golden crossover on Nifty's daily chart hints at short-term uptrend (Rupak De) Base formation near 24,500 supports bullish continuation (Devarsh Vakil) Watch for a decisive break above 24,900 for momentum to pick up (Om Mehra) Strategy for Traders: Long bias if Nifty holds above 24,500 and breaks past 24,900 Cautious near resistance if RBI outcome disappoints Watch rate-sensitive sectors (Realty, Banks, Auto) closely post-policy
The Hindu
an hour ago
- The Hindu
Is IBC an effective resolution tool?
The story so far: More than eight years have passed since the enactment of India's Insolvency and Bankruptcy Code (IBC). According to data from the Insolvency and Bankruptcy Board of India (IBBI), creditors have realised ₹3.89 lakh crore under the framework, with a recovery rate of over 32.8% against admitted claims. Why was the IBC enacted? India enacted the IBC, its first comprehensive bankruptcy law, in 2016 to improve the overall corporate insolvency resolution process. Shifting control from debtors to creditors, the IBC introduced a time-bound resolution mechanism to streamline bankruptcy proceedings, reduce judicial delays, and improve creditor recoveries. According to current provisions, a maximum timeline of 330 days is allowed to find a resolution for a company admitted into the insolvency resolution process. Otherwise, the company goes into liquidation. So far, the Code has rescued 1,194 companies through resolution plans. Is IBC a preferred route for debt recovery? As per the Reserve Bank of India report on Trend and Progress of Banking in India released in December 2024, the IBC emerged as the dominant recovery route, accounting for 48% of all recoveries made by banks followed by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act (32%), Debt Recovery Tribunals (17%), and Lok Adalats (3%) in the Financial Year 2023-24. The realisation under IBC is more than 170.1% as against the liquidation value. Resolution plans, on average, are yielding 93.41% of the fair value of the Corporate Debtors (CDs), IBBI said. Further, 1,276 cases have been settled through appeal, review, or settlement, and 1,154 cases have been withdrawn under section 12A. The Code has referred 2,758 companies for liquidation, as per IBBI data. Nearly 10 companies are being resolved against five going into liquidation. Has IBC been an effective recovery mechanism? Akshat Khetan, Founder, AU Corporate Advisory and Legal Services, pointed out that IBC has changed the underlying credit culture. As the Supreme Court once observed, 'the defaulter's paradise is lost' and the Code has created a credible threat that ensures timely repayment. On the recovery rate of 32.8%, Mr. Khetan pointed out that it must be interpreted in light of the distressed nature of the assets that come into the IBC process, often after years of erosion. As the National Company Law Appellate Tribunal has rightly remarked in one of its rulings, 'IBC is not a recovery mechanism; it is a resolution framework.' Compared to legacy systems, where recovery rates were often below 20% with timelines extending into decades, a 32.8% realisation is a leap forward, he said. Mr. Khetan also stated that the statistic does not capture qualitative gains, such as job preservation, improved enterprise value, and restored investor confidence. In a framework designed to balance resolution over liquidation, the broader economic impact of IBC far outweighs numerical recovery alone, he said. The provisions of the IBC have prompted debtors to take early action in distress situations, marking a shift in their behaviour. National Company Law Tribunal (NCLT) data show that 30,310 cases were settled prior to admission, covering underlying defaults worth ₹13.78 lakh crore till December 2024. A study by the Indian Institute of Management, Bangalore, submitted to IBBI, said IBC has injected discipline in the credit allocation process and has prompted borrowers to adhere to stipulated payment schedules. The gross non-performing assets of the scheduled commercial banks have declined from a peak of 11.2% in March 2018 to 2.8% in March 2024. A part of that reduction is attributable to resolution processes enabled under IBC, it said. The study also indicated a 3% reduction in the cost of debt for distressed firms post-IBC, compared to non-distressed firms , indicating an improved credit environment for distressed firms. The IBC has had a positive impact on corporate governance, reflected in the increased proportion of independent directors on the boards of companies resolved under the Code. What are the major challenges? In a recent report, India Ratings and Research said that judicial delays and post-resolution uncertainties continue to affect confidence in the IBC framework. Even when resolution applicants are ready and the Committee of Creditors has granted approval, delays at the NCLT continue to push recovery timelines. In several cases, such delays result in extended litigation or failed implementation, increasing the risk of liquidation for a viable asset that requires timely execution, it said. The future insolvencies also raise questions about the Code's readiness to handle non-traditional enterprise defaults. While the IBC is legally broad enough to accommodate various resolution strategies, key commercial elements such as intellectual property valuation, treatment of employee dues, and tech continuity require a clearer treatment under the framework to make it future-ready, India Ratings said. To enhance its effectiveness, India must invest in strengthening tribunal infrastructure, allow for pre-packaged insolvency, and establish jurisprudential guardrails to protect bona fide commercial decisions from post-resolution uncertainty, Mr. Khetan said. While challenges persist, including process delays and recovery rates below expectations, the Code's foundational structure remains sound. As implementation matures and jurisprudence evolves, the IBC is well-positioned to overcome these hurdles and fully realise its transformative potential in India's financial ecosystem, IBBI Chairman Ravi Mital said in the recent quarterly newsletter. Does the SC verdict on Bhushan Steel pose a challenge to IBC? The recent developments in the Bhushan Power and Steel Ltd. case have reignited concerns around the finality of resolution outcomes and the predictability of the framework. While the decision upholds compliance standards, its timing and implications highlight the need for judicial clarity and faster adjudication to sustain investor confidence in the process in the long term, India Ratings said. By questioning a transaction that had been closed and operational for years, it risks unsettling the core principle of commercial certainty. If resolution applicants fear judicial reversals even after significant investment, they may hesitate to bid, undermining the IBC's very purpose. The Bhushan verdict thus underscores the need for legal sanctity once a resolution plan is approved and implemented, Mr. Khetan said. The IBC is not merely a piece of economic legislation, it is the backbone of India's credit ecosystem. Its future lies in striking a fine balance between judicial oversight and economic pragmatism. As India aspires to become a $5 trillion economy, robust and predictable insolvency mechanisms are indispensable. The Code must remain nimble, continually evolving to meet emerging realities while ensuring that commercial wisdom is not second-guessed endlessly, he said. Almost 78% of the ongoing Corporate Insolvency Resolution Process (CIRP) cases have exceeded 270 days, post-admission by the NCLT, as on March 31, 2025, ratings agency ICRA said. A sustained momentum would be needed to minimise haircuts for lenders, which remain high at 67%, it said. Nevertheless, some of the recent judgments reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and NCLT. However, such rulings may also impact investor confidence in stressed assets setting precedents that the decision made by the CoC and the NCLT may be challenged and overturned by the judicial system, thus impacting the effectiveness of the resolution process, ICRA said.
Time of India
an hour ago
- Time of India
Fintech entry cleared: Flipkart gets RBI nod for lending licence; plans for NBFC rollout still under wraps
Tired of too many ads? go ad free now has received a lending licence from the Reserve Bank of India, paving the way for direct financing to customers, though the ecommerce firm is yet to disclose operational details. The Walmart-backed company confirmed on Thursday that it had secured a Non-Banking Financial Company (NBFC) licence from the RBI, with sources indicating the approval came in March, PTI reported. While Flipkart acknowledged the development, it did not offer details on how or when the NBFC arm would be operationalised. According to sources, the licence could enable the company to offer credit services such as EMIs or instalment-based financing directly to consumers on its platform. However, specifics of product rollout remain unconfirmed. Walmart currently owns over 80% of Flipkart, having acquired a majority stake in the company in 2018. The development comes shortly after Flipkart, which is preparing for a public listing, announced in April that it plans to shift its holding company from Singapore to India. The move, Flipkart said, aligns its structure with core Indian operations and reflects long-term commitment to the domestic market. "We are inspired by the Government of India's strong vision and proactive initiatives in fostering a thriving business environment and ease of doing business, which have significantly shaped our journey," a Flipkart spokesperson said in April. "This move represents a natural evolution, aligning our holding structure with our core operations, the vast potential of the Indian economy and our technology and innovation-driven capabilities to foster digital transformation in India. "
