India Insight

RBI puts the brakes on the bitcoin train in India

By Abhiram Nandakumar and Ratnika Maruvada

Enthusiasm over bitcoins has dampened in India after the country’s central bank cautioned investors to be wary of using virtual currency because of the associated security, financial and legal risks.

Bitcoin, which was introduced in 2009 by a developer known as Satoshi Nakamoto (the developer’s real name or names is unknown), is an online currency created by users, also called miners, by solving complicated math problems on the Internet. The currency is designed in a way that will produce 21 million coins that can be traded or, increasingly, used to buy things. (For a detailed explanation, visit bitcoin.org)

The Reserve Bank of India’s advisory on Dec. 24 prompted some Indian bitcoin traders to suspend their operations, even as regulators seek clarity on digital currencies and ways to regulate them. The RBI’s worries include taxation, security risks, losses due to the volatility and money laundering.

While regulators have not deemed virtual currencies illegal, India’s law enforcement agency, the Enforcement Directorate, raided the offices of a few companies that operate bitcoin trading websites. While this might slow the adoption of bitcoins as a method of exchange, some see it as a necessary step in the currency’s evolution.

“This is not an attack on bitcoins, but one of its outcomes. They (regulators) want to prevent money laundering and if you want to stop someone from using it in an illegal fashion, they seem to be going down the right path,” said Benson Samuel, a bitcoin developer who runs coinsecure.in. He added that RBI’s advisory may slow down the adoption of virtual currencies in India.

India’s debit card safety rule boosts sales of payment processing firms

Companies that help in processing card payments look set to benefit from rising demand for portable card swipe machines after the Reserve Bank of India adopted new rules to prevent fraud and enhance security.

Merchants in India usually swipe cards through a reader to generate receipts that customers sign, but the new rule, effective Dec. 1, adds another layer of security by making debit card holders enter their personal identification numbers to validate transactions via these machines, also referred to as point-of-sale (POS) terminals.

Businesses such as fuel stations, hotels and restaurants that normally keep their card machines out of the customer’s reach will have to buy the portable, GPRS-enabled devices to offer convenience to clients.

India no angel in dangerous neighbourhood

By Annie Banerji

Perhaps the finger-pointing at neighbouring Pakistan and the talk of Afghan militancy destabilising the region that New Delhi so often rolls out should be reconsidered. The neighbourhood may well be dangerous, but India is no model pupil.

According to the 2011 Global Peace Index, an initiative of the Institute of Economics and Peace, which evaluates 153 countries based on the level of ongoing conflict, safety and security and militarisation, India is the world’s 135th most peaceful country, falling seven positions from last year.

This year’s rankings, which indicated a decline in the levels of peace for the third consecutive year overall, placed Iceland in the top spot as the most peaceful country and Somalia as the world’s least.

Diplomatic disaster deja vu for incensed India

“Once is happenstance. Twice is coincidence. The third time it’s enemy action,” so wrote Ian Fleming in his James Bond thriller Goldfinger.

With the reported frisking of Indian U.N. representative Hardeep Puri at a U.S. airport coming just days after a similar incident involving a senior Indian diplomat, the outraged Indian foreign ministry may well be considering the third option.
A passenger is scanned using "backscatter x-ray technology" at a security check-point at Logan Airport in Boston, Massachusetts November 22, 2010.  REUTERS/Brian Snyder
After expressing its anger at the pat-down of Indian Ambassador to Washington Meera Shankar on Thursday, the emergence of Puri’s incident has India feeling unfairly victimised.

Protests have been lodged and strong words issued out of New Delhi. In response, a review of protocol has been promised by Washington.

from Pakistan: Now or Never?:

Between the lines: Obama’s comments on Kashmir

nubra reducedPresident Barack Obama's words on relations with Pakistan were always going to be carefully scripted during his visit to India, where even to say the word "Kashmir"  aloud in public can raise jitters about U.S. interference in what New Delhi sees as a bilateral dispute.

So first up, here's what he had to say during a news conference in New Delhi with Prime Minister Manmohan Singh in response to a question about what role the United States could play in resolving the Kashmir dispute (NDTV has the video).

"With respect to Kashmir, obviously this is a long-standing dispute between India and Pakistan; as I said yesterday, I believe that both Pakistan and India have an interest in reducing tensions between the two countries. The United States cannot impose a solution to these problems but I have indicated to Prime Minister Singh that we are happy to play any role that the parties think is appropriate in reducing these tensions. That's in the interests of the region; it is in the interests of the two countries involved and it is in the interests of the United States of America.

Going global in India’s chaotic way

Labourers walk on a flyover in front of the Jawaharlal Nehru Stadium in New Delhi September 25, 2010. REUTERS/Krishnendu Halder

India is globalising, but not the way much of the world wants.

That rather contradictory thought nagged at me one morning during the chaotic Commonwealth Games here in New Delhi.

On the road to the media venue’s gate, I trudged past a squatter’s family living in a tarpaulin. The mother was helping her son pee on my left. Rubbish, the smelly, sickly kind, lay to my right. My shoes sunk in mud from an unfinished pavement.

Hardly the stuff of a showcase international event meant to rival China. But after four years in India, the scene appeared normal. So was news during the Games that stocks had hit a near three-year high and that the Economist had predicted India’s economy would soon outpace China.

Is New Delhi working on Kashmir solution?

At least 64 people have been killed across Kashmir during anti-India demonstrations, one of the worst outbreaks of unrest since a separatist revolt against New Delhi broke out in 1989.

A Kashmiri protester throws a stone towards police during an anti-India protest in Srinagar August 30, 2010. REUTERS/Danish IsmailFrequent curfews, security lockdown and separatist strikes have kept the Muslim-majority Kashmir valley on the boil, shutting down much of the region for the past two and a half months.

New Delhi has been criticised for failing to respond to violence that has wounded hundreds, closed down schools and colleges also.

Moral brigade, media trials and law

In what is being seen as a significant judgement, India’s apex court recently dismissed all charges against south Indian actress Khushboo for her alleged remarks on pre-marital sex in a 2005 magazine interview.

KhushbooThe Supreme Court said her comments were her personal view and that she was entitled to express them.

Many in the country believe the verdict heralds a welcome but a difficult and slow change. Nevertheless, it reinforces our claim to democracy, secularism and above all freedom of speech and expression, of course with its riders.

from Afghan Journal:

The price of greater Indian involvement in Afghanistan

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U.S. Defense Secretary Robert Gates is heading to India, and one of the things Washington is looking at is how can regional players such as India do more in Afghanistan. "As we are doing more, of course we are looking at others to do more," a U.S. official said, ahead of the trip referring to the troop surge.

But this is easier said than done, and in the case of India, a bit of a minefield. While America may expect more from India, Pakistan has had enough of its bitter rival's already expanded role in Afghanistan since the fall of the Taliban in 2001. Indeed, Afghanistan is the new battleground on par with Kashmir, with many in Pakistan saying Indian involvement in Afghanistan was more than altruistic and aimed at destabilising Pakistan from the rear.  Many in India, on the other hand, point the finger at Pakistan for two deadly bomb attacks on its embassy in Kabul.

Against such a difficult backdrop, what can New Delhi possibly do without complicating things further?

26/11 – Lasting images, limited impact?

Ahead of the first anniversary of the Mumbai attacks, India’s financial hub is on heightened alert.

Metal detectors and scanners “beep” in office blocks and malls, snipers and sniffer dogs keep guard at hotels, and barricades are in place around high-profile locations. And various talking heads have made power point presentations to show the city is now safer.

In the past year, several measures have been put in place to tighten security in Mumbai, including a hub for elite commandos, and new weapons, armoured vehicles and speedboats for the police.

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