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After weeks of worrying rhetoric, the US is sending over one of its top diplomats in an effort to calm the nerves of policymakers in New Delhi and provide an assurance that India will not face sanctions over its business and military ties to Russia, sources in the know told Moneycontrol.

US assistant secretary of state for South Asian affairs Donald Lu will be in India on Tuesday on a one-day visit. Lu’s visit gains significance against the backdrop of the Russia-Ukraine war, which has seen India and the US take opposing diplomatic stances. Incidentally, Lu is the same US official who had been in the news for saying earlier this month that India’s defence deals with Russia remain plausible ground for sanctions and that US President Joe Biden was still considering his options.

India has faced flak from US lawmakers, both Republicans and Democrats, for choosing to abstain from multiple votes at the United Nations condemning Russia’s unilateral attack on Ukraine. The Biden administration has also been irked by India’s refusal to stop trade with Russia nearly a month after the invasion began.

Speaking at the Business Roundtable’s CEO Quarterly Meeting at the White House on March 21, Biden said that while some members of the Quadrilateral Security Dialogue (Quad) like Japan and Australia have responded to Russia’s aggression strongly, India has been “somewhat shaky” on some of the issues, ANI reported.

However, multiple diplomatic sources said Lu is expected to convey to the ministry of external affairs (MEA) that the bilateral strategic partnership and business ties between the US and India trump other diplomatic positions.

“There has been a lot of mudslinging between New Delhi and Washington, DC, with politicians making unwarranted comments. The leaders have been restrained till now but they are also beholden to the political mood at home. We feel a clean break is in order at this point,” a senior US diplomat said.

Lu had told members of the US Senate Foreign Relations Subcommittee on the Near East, South Asia, Central Asia, and Counter-terrorism on March 9 that it was for Biden to decide whether to apply or waive sanctions on India. He had also stressed that while the Biden administration will fully follow and implement the Countering America’s Adversaries Through Sanctions Act (CAATSA) law, India remained an extremely important security partner of the US.

“Lu is expected to repeat the same in Delhi. However, the US has continued to ask all partners, including India, to reduce ties with Russia, while India has maintained it will take independent decisions based on national security,” an MEA official said.

CAATSA scare

Signed by President Donald Trump in 2017, CAATSA “seeks to counter Russian influence in Europe and curb Iran’s ballistic missile program and targets the rogue regime in North Korea”, according to the US Congress. While it has been a major force in diplomatic negotiations, the legislation has not been used till now against any other country.

However, the Russian invasion of Ukraine has seen calls from the US Congress to tighten CAATSA further and cut off Russia’s ability to export its weapons. Beyond this, Washington, DC, is now making sure that it becomes very hard for any country to buy major weapons systems from Russia as a result of the sanctions in place on Russian banks.

Significantly for India, CAATSA has provisions to impose economic and financial sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors.

Enacted in response to Russia’s annexation of Crimea in 2014, and its alleged meddling in the 2016 US presidential elections, it authorises the US administration to impose sanctions on countries that purchase major defence hardware from Russia.

India has repeatedly run afoul of the rule owing to its existing deep defence ties with Russia but the US has not gone beyond the occasional rebuke, choosing to settle matters in private.

After CAATSA kicked in, India inked a $5.43-billion deal with Russia to procure four S-400 Triumf surface-to-air missile defence systems in October 2018.

The same year, it also purchased significant amounts of crude oil from Iran. However, after being prodded by the US, the government has since moved away from Iranian crude. After reaching a high of $12.3 billion worth of imports in 2018-19, the import of crude oil from Iran plummeted to $1 billion in 2019-20 and completely stopped thereafter.

With regards to Indian defence acquisitions from Russia, Lu had also told the US Congress that India had cancelled large orders of MiG-29 fighter jets, Russian helicopters and anti-tank weapons. India has, however, not officially confirmed this. “The government is studying whether the fighter jets order can be redirected to domestic players in the spirit of Make in India. No further decision has been taken,” a senior official said.

SoftBank-backed cab aggregator Ola, which was planning to list on the public markets this year, now plans to raise a new round of funding at a lower valuation, according to people familiar with the development.

The down round and delay in IPO signify a sharp reversal in fortune for startups, after a record 2021 that saw sky-high valuations in the public and private markets. This will likely be the first down round of a large Indian unicorn after the boom last year.

"It may raise $150-$200 million at a valuation of $5 Billion compared to its last round that happened at $7 Billion as its IPO plans are delayed", one of the persons cited above said.

A second source said Ola may go down this route as it was also yet to receive the $500 million loan that it raised from investors late last year.

"While the money has been wired from investors, it is sitting in an entity abroad. Ola hasn't been able to get the money transferred to India because of pending approvals from RBI. But it has already started making interest payments on this, and has paid $10 million interest so far," the person said.

While Moneycontrol could not ascertain the nature of these regulatory approvals, sources said these could be related to ECB (external commercial borrowings) and FEMA (Foreign Exchange Management Act) guidelines.

The company did not respond to queries sent on Monday.

Ola was last valued at $7.3 billion when it raised $139 million in its Series J round, led by Edelweiss PE, IIFL and Sunil Munjal-led Hero Enterprises, in what seemed like the last round of funding before its IPO. Before the $139 million, it raised $500 million from Warburg Pincus and Temasek, giving early backers Tiger and Matrix a part exit in the company.

Founder and CEO Bhavish Aggarwal had said that Ola plans to go public in the first half of 2022 at a Reuters Next conference in December last year.

Aggarwal also outlined plans to create a super app that would offer not just mobility but also loans and microinsurance. Ola has also been investing heavily in its instant grocery delivery business, Ola Dash, as it seeks to build services beyond ride-hailing, which took a hit post-pandemic. Global rival Uber, for instance, earns more from food delivery than its core rides business.

To be sure, Ola is not the only company that is pushing out its IPO due to the current market environment. Two other SoftBank-backed firms: Delhivery and Oyo have also deferred listing plans, as technology stocks in India and US have taken a beating, leading investors to wonder whether the epic bull run and a party fueled by low-interest rates may be ending.

This is also not the first time that Ola will be raising funds at a lower valuation than its previous round. In early 2017, it raised $330 million at a valuation of $3.5 Billion, compared to the $5 Billion it raised in its previous round.

The company has witnessed a spate of exits in recent months, including its Chief Financial Officer Swayam Saurabh, Chief Operating Officer Gaurav Porwal, HR head Rohit Munjal and General Counsel Sandeep Chowdhury,

Aggarwal is the founder of two unicorns- the ride-hailing business Ola and Ola Electric, which has ambitious plans to disrupt the electric two-wheeler market. It had started the deliveries of its electric scooters in December last year, a delay from its initial plans of an October delivery timeline.

While COVID-induced lockdowns battered its ride-hailing business in the last year, it has been making a recovery of late as India has opened up significantly in the last few months.

"Over the last 12 months, we have made our ride-hailing business more robust, resilient, and efficient. With a strong recovery post lockdown and shift in consumer preferences away from public transportation, we are well-positioned to capitalize on the various urban mobility needs of our customers," Bhavish Aggarwal, who is the group CEO for Ola, said in a statement in July 2021.

In September, he tweeted stating that the gross merchandise volume (GMV) for Ola crossed pre-Covid levels, adding that the recovery from the second wave of Covid19 has been three times as fast compared with the first wave.

Also Read:- Fitch hacks India's FY23 GDP growth forecast to 8.5% on higher energy prices

Fitch Ratings has cut its GDP growth forecast for India for 2022-23 by a massive 180 basis points to 8.5 percent on the back of soaring global energy prices.

 For FY22, however, the ratings agency has raised its outlook to 8.7 percent - 60 basis points above its December estimate. The hike in the FY22 GDP growth estimate comes after the Indian economy rode out the Omicron variant-led third COVID-19 wave "with little damage", Fitch noted.

The revised growth forecast for FY23 is still higher than what is expected by the Reserve Bank of India (RBI). The central bank sees India's GDP growing 7.8 percent next financial year, with the statistics ministry predicting an 8.9 percent growth for this year.

The cut in next year's growth forecast for India is part of a downward revision on a global scale, with the projection for global growth in 2022 lowered to 3.5 percent from 4.2 percent. The global economy is also seen growing at a slower rate of 2.8 percent in 2023 as against 3 percent forecast earlier.

Global inflation is back with a vengeance after an absence of at least two decades. This is starting to feel like an inflation regime-change moment," warned Brian Coulton, the chief economist at Fitch.

Global commodity prices, particularly those of energy, have been on the rise since Russia launched its assault on Ukraine late last month.

"A potentially huge global supply shock that will reduce growth and push up inflation is hitting the post-COVID-19 pandemic recovery. Russia's invasion of Ukraine and the economic sanctions on Russia that have followed have put global energy supplies at risk. Sanctions seem unlikely to be rescinded any time soon," Fitch said.

As per the latest forecasts, Fitch expects the Russian economy to shrink by 8 percent in 2022 followed by another 0.2 percent contraction in 2023.

"This forecast drop in activity is comparable to that during the country's 1998 financial crisis, and then in the global financial crisis. The sanctions-related shock looks much larger in many respects – and will certainly last longer – but high oil prices, military spending and the pre-war current account surplus could provide some cushion," Fitch said.

The agency expects global oil prices to remain elevated for a while. It has forecast an average price of $100 per barrel for 2022 - up from $70 - and $80 per barrel for 2023.

Fitch has, consequently, set the inflation estimate sharply higher. For the US, retail inflation is seen averaging 7 percent in 2022, up from 4.5 percent forecast in December. For the Eurozone, Fitch expects inflation to average 5 percent this calendar year, nearly twice that of its previous forecast of 2.6 percent.

In India, the Consumer Price Index (CPI) inflation is seen at 4.6 percent at the end of FY23 and 5 percent at the end of FY24. According to Fitch, the monetary policy normalisation by the RBI has been "very shallow" so far.

"The Reserve Bank of India has prioritised the economic recovery over tackling inflation amid a still-large output gap. We still expect the repo rate to rise to 4.75 percent by December, from 4 percent. The reverse repo rate – which has become the effective driver of money market rates since the start of the pandemic – is likely to be increased by a larger amount," Fitch said.

Reserve Bank Governor Shaktikanta Das on Monday said the RBI will continue to ensure adequate liquidity to support the economy, which is facing many headwinds in the form of soaring crude oil and key commodity prices following the Russian invasion of Ukraine.

Das, while addressing an industry meet organised by CII here this evening, said since the pandemic-hit the economy in March 2020, the central bank has pumped in a whopping Rs 17 lakh crore into the economy and assured the industry that the RBI will continue to ensure that the economy is well oiled with funds.

The governor further said banks at the system level are in better health now with the capital adequacy ratio at 16 per cent, and gross NPAs falling to a record low of 6.5 per cent.

He said despite the headwinds arising from the Russia-Ukraine war, the economy is better placed given the high forex reserves and low current account gap.

"We are comfortably placed to deal with any challenges with regard to financing the CAD, and the RBI stands committed to deal with any challenges on this front," he said.

A Chinese passenger plane with 132 people on board crashed in the southern Guangxi Zhuang Autonomous Region on Monday, the regional emergency management department said.

The Boeing 737 aircraft of China Eastern Airlines, which flew from Kunming to Guangzhou, crashed in Tengxian County in the city of Wuzhou, causing a mountain fire, the department was quoted as saying by the state-run Xinhua news agency.

The 132 people included 123 passengers and nine crew members, the Civil Aviation Administration of China said on its website.

The number of casualties is not clear yet, the report said.

Rescuers have been assembled and are approaching the site.

According to news portal The Paper, a staff member at Guangzhou's Baiyun International Airport said that flight MU5735 from Kunming to Guangzhou has not arrived at its destined time, the Hong Kong-based South China Morning Post reported.

The domestic flight was scheduled to take off from Kunming at 1.10 pm (local time) and arrive at Guangzhou at 2.52 pm (local time) and is now marked out of reach on Baiyun airport's app.

Following the accident, videos and pictures purporting to come from the scene started circulating on social media showing smoke billowing from a hillside and wreckage on the ground.

China Eastern is one of China's three major air carriers.

China's airlines had recorded over 100 million continuous hours of safe flight as of February 19, according to Zhu Tao, an official with the Civil Aviation Administration, the Post reported.

The last domestic fatal incident was in 2010, when a plane crashed in Yichun, Heilongjiang province, killing 42 people.

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The government is in the midst of roadshows "to assess the investors' interest before the Expression of Interest" for the strategic disinvestment of IDBI Bank, Minister of State for Finance Bhagwat Kishanrao Karad said in response to a question in Lok Sabha on March 21.

The strategic disinvestment of the government and Life Insurance Corp of India's (LIC) stakes in IDBI Bank was approved by the Cabinet Committee on Economic Affairs on May 5, 2021.

While the government has a 45.48 percent stake in IDBI Bank, LIC owns 49.24 percent of the lender. The extent to which the two stakes will be divested will be decided "at the time of structuring of transaction in consultation with RBI", the government had said last year.

The roadshows for IDBI Bank's disinvestment comes amid delays for LIC's own initial public offering. The insurance giant filed its draft red herring prospectus over a month ago. However, financial markets have been in turmoil ever since Russia invaded Ukraine in late February, leading to speculation that the listing may be delayed. Reports have emerged that the IPO could be pushed to FY23.

IDBI Bank is an associate company of LIC. In its IPO papers filed with the Securities and Exchange Board of India, LIC had said that while IDBI Bank "does not need to raise further capital at the moment, we may be required to infuse additional funds into IDBI Bank in the future".

"However, if IDBI Bank requires additional capital prior to the expiry of the applicable five-year period and it is unable to raise capital, we would be required to infuse additional funds into IDBI Bank, which may have an adverse effect on our financial condition and results of operations," the prospectus had added.

Regulations also require that only one associate company of LIC can be engaged in housing finance activity. This means one of IDBI Bank and LIC Housing Finance Limited would have to get out of home financing by November 2, 2023, should IDBI Bank remain the insurance behemoth's associate company even then.

"The impact of complying with this requirement of the RBI may have an adverse effect on our financial condition, results of operations and cash flows," LIC had further cautioned in its prospectus.

A panel of experts constituted by the Supreme Court of India to study the three farm acts claimed 86 per cent of organisations representing more than 3 crore farmers supported the laws the central government repealed last year after months-long protests.

The high powered panel, whose recommendations are of little consequence now, advocated retaining the three acts and suggested that states may be allowed flexibility in implementing and designing them with the central government’s approval.

It said that repealing or suspending of the controversial farm acts would be "unfair" to the silent majority who supported the laws.

The Supreme Court set up the panel in January 2020 while staying the implementation of the three laws. It initially had four members: agriculture economist Ashok Gulati, Shetkari Sanghatana (Maharashtra) president Anil Ghanwat, International Food Policy Research Institute's Pramod Kumar Joshi and Bhupinder Singh Mann, president of a faction of the Bhartiya Kisan Union.

Mann later recused himself from the panel.

The panel’s report said that some alternative mechanisms for dispute settlement--through civil courts or arbitration mechanisms such as farmer courts--may be provided to the stakeholders. The panel’s report is expected to be made public soon.

The panel recommended a mechanism to strengthen agricultural infrastructure through cooperatives and Farmer Producer organizations (FPOs), while an agriculture marketing council with all states and UTs as members may be formed for implementation of the acts.

Farmers protests

After the three acts were implemented through ordinances in June 2020, protests against them broke out in several parts of Punjab, Haryana and western Uttar Pradesh—regions that are the grain bowl of the country.

The agitation that started as stray protests in some villages of Punjab gathered steam over time and spread to Haryana, western Uttar Pradesh and Rajasthan.

The chief demand of the agitating farmers has been repeal of the three acts along with a legal guarantee on Minimum Support Price (MSP).

The protests reached a crescendo when thousands of farmers from Punjab and elsewhere marched towards the capital Delhi in 2020 and decided to block the main entry points once they were denied entry.

The Centre, on its part, held 11 rounds of discussions with the protesting farmers and even offered to amend some of provisions without much success, as the protestors struck to their main demand of repeal of the acts.

The violent events of January 26 2021, when scores of agitating farmers deviated from a fixed tractor rally route and forced entry into the main thoroughfares, leading to pitched battles with the police, was seen as a big setback for the stir but the forced eviction of Bhartiya Kisan Union leader Rakesh Tikait and his emotional outburst revived the sagging morale of the agitators.

And within days, western Uttar Pradesh became the new epicenter of the protests, which shifted from Punjab and Haryana.

In between, the Supreme Court intervened and decided to constitute a high-powered panel of experts to study the three laws and suggest a way forward.

The panel was rejected by the protesting farmers as it consisted of people known to have favoured the laws in some forum or the other.

After almost a year of protests, Prime Minister Narendra Modi in a televised address to the nation on the occasion of Guru Nanak Jayanti, announced to repeal all the three laws.

Panel’s recommendations

*Recommendation regarding farmers produce trade and commerce (promotion and facilitation) Act 2020*

*Development of price information and market intelligence system to facilitate efficient 'price discovery' and strengthen the bargaining power of the farmers.

* Terms of reference of CACP can be expanded to collate, analyze and disseminate price information.

* Convert existing APMCs to revenue generating entities by making them hubs of agri-business.

Recommendations related to Farmers (empowerment and protection) Agreement on price assurance and farm services Act, 2020

* A model contract agreement should be formulated and shared on the website with all stakeholders to remove various glitches in implementation.

* A major communication exercise needs to be undertaken to clear apprehension the land of farmers would be usurped under this Act.

* To lend security to the contract for both parties, the contract agreement should be signed by two

witness from farmer's as well as contractors’ side.

* Provision in the farming agreement should be made in case market prices increase than the contracted prices.

Recommendations related to essential commodities (amendment) Act (ECA), 2020*

* Consider completely abolishing the ECA Act, 1995.

* The price triggers, at 100% for perishables and 50% non-perishables in the Act, may be reviewed and enhanced to 200% and 75% respectively.

* Quantity of stock limits, if imposed, should be reviewed on a fortnightly basis.

* The reference period for price rise may be reduced to the last 3 years.

* Export bans need to be rationalized and should be imposed in an objective manner based on similar price triggers as envisaged in this Act.

Recommendations related to agricultural price policies

*Open ended procurement policy needs to be discontinued as it is distorting the composition of agricultural output in certain states with its adjunct environmental consequences.

* Supports the approach of NFAED in carrying out procurement operations in pulses and oilseeds under the Price support scheme.

* Procurement of crops at a declared MSP can be the prerogative of the States as per their specific agricultural policy priorities. These states can provide for a legal backing for such procurements at their own cost- as the recent Punjab amendment Act.

Also Read:- Trading 'queen' and mystery guru: Strange tale engulfs NSE in scandal

Around the National Stock Exchange of India, Chitra Ramkrishna was practically her own institution. A founding member of the bourse, she helped shape it into the world’s largest derivatives exchange, opening trading to a growing middle class and serving as its first female chief. In 2016, she stepped down to high praise for her “sterling contribution.”

But the reputation of the woman nicknamed “Queen of the Bourse,” along with the multi-billion dollar exchange, took a shocking tumble last month. Indian authorities accused Ramkrishna of crimes ranging from evading taxes to, more bizarrely, leaking confidential information for years to an unnamed spiritual guru living in the mountains.

The strange tale of mysticism-meets-technology reveals what could be a complete breakdown of security and best practices at the nation’s largest bourse. With the overhang of a messy investigation, bankers in India said the new allegations may not just delay the exchange’s much-awaited initial public offering, but also hurt its growing clout in the global equity market.

ALSO READ: NSE co-location case: CBI court sends Chitra Ramkrishna to jail for 14 days

Over several tumultuous weeks, the authorities arrested Ramkrishna, 59, and Anand Subramanian, her former colleague, who has also been accused of criminal misconduct. Tax authorities searched their homes. This month, Ramkrishna’s successor and the exchange’s current chief executive, Vikram Limaye, said he would step down when his term ends over the summer. The NSE has invited applications through March 25 for a new leader.

“Our credibility is at stake,” Sanjeev Aggarwal, a judge, said this month at a court hearing in New Delhi. “Who will invest in India if scams like this happen?”

The NSE did not respond to requests for comment. In a statement, the exchange said it was cooperating with investigators and had made management changes in recent years. Lawyers for Ramkrishna and Subramanian did not return messages and calls seeking comment.

The pair have denied wrongdoing in court. Ramkrishna told regulators that nothing untoward happened with the guru, likening their conversations to “informal counsel from coaches, mentors or other seniors in this industry.”

The drama intensified in February, when the Securities and Exchange Board of India released a 190-page regulatory order disclosing that Ramkrishna had sent sensitive information to an outsider described as a yogi in the Himalayas.

In an interview for that report, Ramkrishna said the figure guided her hand as chief executive, a role she served in from 2013 to 2016. The yogi was non-corporeal, she said, but corresponded using the email address rigyajursama@outlook.com, which combines the names of three religious texts. Ramkrishna referred to the guru as “thee,” “swami ji” and “your lordship.”

SEBI alleged that the yogi had turned Ramkrishna into a “puppet,” remotely controlling finances and steering promotions. In 2013, for instance, she hired Subramanian, though, SEBI said, he had no experience in capital markets. He was later promoted to chief operating officer at the advice of the yogi, according to the report. Employees said Subramanian had enormous influence. One Indian news outlet referred to him as a “modern-day Rasputin-like figure.”

The identity of the yogi has become a key pressure point, dividing the country’s authorities and deepening the mystery of what happened behind closed doors.

Among the most touted theories is that Subramanian was actually the yogi and that he had duped Ramkrishna, a conclusion made by Ernst & Young, which was hired by the exchange to investigate. SEBI contested that claim, writing in the 190-page order that there was still “no conclusive evidence” linking Subramanian to the email address.

ALSO READ: Court refuses VIP treatment to Chitra Ramkrishna, allows prayer books

Using information from that inquiry, Indian officials have also widened another investigation potentially implicating Ramkrishna and Subramanian in facilitating unfair trading access. The incident is known locally as the “co-location scam.”

Many now wonder what regulators, NSE board members and investors did to avert malpractice, and whether issues at the exchange are more systemic than they had previously seemed.

Through a lawyer, Subramanian denied this month that he was the yogi. SEBI did not return requests for comment.

Most Powerful to Most Compromised

The National Stock Exchange was started to root out corruption among Mumbai’s brokers and bankers.

In 1992, Harshad Mehta, a high-profile stockbroker nicknamed “Big Bull,” was charged with funneling $2 billion from banks into equities at the Bombay Stock Exchange, which was founded in 1875 and became India’s premier bourse. When the scandal came to light, India’s markets tanked. Mehta died before the trial finished.

In the early 1990s, Ramkrishna, then a young employee at the Industrial Development Bank of India, was recruited to build a more modern exchange and move trading from an open-outcry ring to an electronic system. With her experience working on a blueprint for India’s capital market regulatory agency, she was selected with four others to create what would become the NSE.

The team worked out of a tiny, leased office in a part of Mumbai known for its defunct textile mills. In 1994, they launched screen-based trading using a satellite, allowing instant access to prices across India.

Ramkrishna’s career soared. In 2013, she took over as chief executive, becoming one of only three women in the world to run a bourse. She cultivated a reputation as a driven, visionary leader. In a 2015 interview with Bloomberg, Ramkrishna cited Mahatma Gandhi, the Indian independence leader, as a role model. One of her goals, she said, was to make stocks accessible to the middle class using an exchange-traded basket of securities known as ETFs.

“I’m sure even he would have bought my ETFs!” she said in the Bloomberg interview, referring to Gandhi.

On her first day as chief executive, she appointed Subramanian, an outsider who had previously worked in middle management at a leasing and repair service company. After just three years, Ramkrishna nearly tripled his salary to more than half a million dollars, according to the SEBI order. The pair used their own elevator. When Subramanian visited the trading floor, an entourage installed separate soap dispensers and hand towels for him in the restroom, the local news outlet Mint reported.

ALSO READ: I-T department raids premises of ex-NSE chief Chitra Ramkrishna

She was also deeply interested in spirituality, making many decisions after consulting astrological charts, according to the book “Absolute Power,” a chronicle of the NSE’s highs and lows written by two investigative journalists.

While in office, regulators suspected that the pair had allowed some brokers to host their servers in the same building as the NSE, providing them with faster access to the trading system. However, Ramkrishna blamed irregularities on “technical glitches,” according to the Economic Times, and has successfully appealed against penalties. Some bankers accused by regulators of helping them continue to work at the bourse, Mint reported.

After Ramkrishna stepped down in 2016, Limaye, a Wall Street veteran and graduate of the Wharton School of the University of Pennsylvania, one of the world’s most prestigious business schools, took over as chief executive. The exchange tried to improve stakeholder relationships and put in place new policies to reduce broker defaults.

The NSE continues to report strong results as the number of investors in Indian markets surges. For January, retail investment reached 287 billion rupees, far exceeding figures from December (112 billion rupees) and November (136 billion rupees), according to the latest available data.

Even so, the new involvement of the tax office and federal police in the investigations could derail progress, bankers in India said. Several foreign investors have pulled out. Exchange data show Citigroup Inc., Goldman Sachs Group Inc. and Norwest Venture Partners sold their entire stakes in the NSE in the year that ends March 31.

Shriram Subramanian, the founder and managing director of InGovern, a firm that advises investors, said it was unclear whether “this was a misdoing of the past and NSE has learned its lessons.”

The bourse needs to be aware, he said, “that all stakeholders and prospective investors will be scrutinizing the company closely.”

--With assistance from Upmanyu Trivedi, Shruti Srivastava, Vrishti Beniwal, Kai Schultz and Jeanette Rodrigues.

U.S. officials have observed an uptick in the use of digital assets to facilitate illicit finance since Russia invaded Ukraine, but the transaction volume is too small to play a big role in helping Moscow evade sweeping sanctions, a senior Treasury official said on Friday.

Nellie Liang, Treasury undersecretary for domestic finance, said the current state of digital assets would not be large enough to run an economy on, and that the ecosystem is too underdeveloped for individuals to effectively evade sanctions using such assets.

"The transaction size we've seen is fairly small," Liang told Reuters in an interview. "Of course, we recognize we may not see everything, but there is a fair amount of oversight. At this point, we just don't see that it could be used in a large-scale way to evade sanctions."

Liang said the Treasury has been studying the issue for years, and that Group of Seven advanced economies and other countries have also raised concerns about use of digital assets for illicit finance, making effective enforcement imperative.

"People are very aware of it, and paying attention to it," she said. "While it's growing because the use of crypto is growing, its share as a medium for illicit finance is not anywhere as large as just using cash."

U.S. Treasury Secretary Janet Yellen earlier this month vowed to address potential gaps in tough sanctions slapped on Russia following its Feb. 24 invasion of Ukraine, and said there were anti-money laundering laws in place to prevent members of Russia's elite from using cryptocurrencies to evade those measures.

Russia calls its actions in Ukraine a "special military operation" that is not designed to occupy territory but to destroy its neighbor's military capabilities.

Despite repeated assurances from Biden administration officials that crypto could not be used at a large scale to help Russia circumvent sanctions, several Democratic lawmakers, including Senator Elizabeth Warren, have expressed concern that Russian oligarchs could turn to digital asset platforms, having been shut out of the traditional financial system.

Warren, along with 10 other Democratic senators, introduced a bill Thursday that would enable the president to sanction foreign cryptocurrency firms doing business with sanctioned Russian entities and prevent them from transacting with U.S. customers.

Liang, who will lead Treasury's effort to implement President Joe Biden's recent executive order on cryptocurrencies, said she had not yet seen the legislation.

That executive order directed the Treasury along with the Justice Department and other agencies to study the legal and economic ramifications of creating a U.S. central bank digital currency and author reports on the role that cryptocurrencies will play in the evolving payments landscape.

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As the world economy was recovering from the COVID-19 pandemic, the Russia-Ukraine war has once jolted the entire system. The Western countries have imposed heavy economic sanctions against Russia. One of the major sanctions which attracted attention was the Western central banks asking the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system to block some Russian banks from international payments.

Finance relies immensely on flow of information, and hence the history of finance and communications go hand-in-hand. The financial sector is usually an early adopter of whichever new communication technology that promises to deliver information faster. So from pigeons or telegraph or web technology, finance is pretty much at the centre of using it. SWIFT is a similar communication technology.

In 1973, SWIFT was established in Belgium when 239 banks from 15 countries joined hands to solve a major problem of communicating about cross-border payments. SWIFT started functioning in 1977 by replacing telex with a computer-based system to transmit messages. Since then communication technology has transformed, and so has SWIFT. SWIFT is a financial co-operative used by more than 11,000 institutions across 200-plus countries and territories, and services. SWIFT transmitted 10 million messages in 1979, and crossed nearly 10 billion messages by 2020.

SWIFT is owned and controlled by 3,500 shareholders, which are mainly financial institutions. The shareholders elect a 25-member board representing banks across the world.

In 1983, the central banks became members of this network. Overtime, the central banks were not just its members but ‘overseers’ too. The G10 central banks, which governed the system, were led by the Central Bank of Belgium, and included Canada, France, Germany, Italy, Japan, The Netherlands, the United Kingdom, the United States, Switzerland, and Sweden.

In 1999, the European Central Bank was established, and was made an overseer of SWIFT. In 2012, the SWIFT Oversight Forum was established to share SWIFT-related information with other central banks. The forum included the central banks of 10 countries: Australia, China, Hong Kong, India, Korea, Russia, Saudi Arabia, Singapore, South Africa, and Turkey.

It is these G10 central banks which have asked the SWIFT to bar some Russian banks. These sanctions raise three major issues facing the world economy.

First, it is not surprising to see that the majority of the central banks which oversee the SWIFT system are from developed economies. In several ways SWIFT governance resembles the governance of the United Nations, the World Bank, the International Monetary Fund, etc. These institutions are meant to serve the global community, but are primarily run by and for developed countries. These institutions are ‘global’ for namesake as developed countries use these to serve their goals. This is evident in the ongoing Russia-Ukraine crisis as well.

Second, while Russian attacks on Ukraine are deplorable, the West is equally responsible for the ongoing war. The US and Western Europe have been pushing Ukraine to join NATO, which is a major reason for the current crisis. So should there have been sanctions on the G10 banks for their part in the conflict? If invading a country was the grounds to impose these sanctions, why haven’t such sanctions been taken against the US for its highhandedness over the past few decades?

Third, we need to think of alternatives to the SWIFT system. The sanctions are affecting every country that has trading ties with Russia, including India. In the wake of these sanctions, authorities are trying to revive a Rupee-Ruble payment line. Some countries have been experimenting with Central Bank Digital Currencies for cross-border payments. Going forward, these experiments will likely become more mainstream.

Centralisation is not limited to SWIFT payments alone. In the last 15 years, the world economy has faced three major crises: the 2008 global financial crisis, the 2020 COVID-19 pandemic, and now the Russia-Ukraine war. The three have pointed to a paradoxical aspect facing the world economy. While the technological forces should have decentralised and created more choices, we actually see more centralisation and less choices. The 2008 crisis showed the centrality of US financial system, the pandemic showed the centrality of the Chinese trading system, and the Ukraine crisis shows the centrality of SWIFT and the US Dollar in the payment systems. The centralisation of these systems has meant that when there is a crisis, it spreads like wildfire across the world economy.

At the turn of the century it was thought that humans had overcome most of the problems it faced in the 20th century. Two decades into the 21st, and it seems like a re-run of the previous century with a financial crisis, pandemic and now war. In addition to these, there is a climate crisis, which could be the mother of all crises. So much for the human hubris, but will we ever learn?

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