Subbarao not keen to continue after present term

.......... "Criticism is part of the game when you are making public policy. It's legitimate that people criticise. And I'm comfortable the criticism comes from both sides, which must mean we are at least partly right, that some people think we are right,".............

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Subbarao doesn’t want to be RBI governor again

Reserve Bank Governor D Subbarao, who has been having a tough time in dealing with spiralling inflation without hurting economic growth, does not want a third term at the helm of the central bank. “No,” he said when asked by the Wall Street Journal Online edition whether he would like to serve another term after his current tenure expires in September 2013............

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Karnataka Bank Launches Gift Card, Travel Card

Mangalore, Feb 22: Karnataka Bank has launched two more new technology driven and user friendly products, i.e. KBL Gift Card and KBL Travel Card for the convenience of its customers and also the general public. Usha Thorat, former Deputy Governor of RBI and director of CAFRAL launched these new products on the occasion of Founder’s Day celebration on February 18. The highlights of the Gift Card are freedom from selecting the perfect gift, card available in denominations starting from Rs 500 to Rs 25,000, Validity in India and ready to use and shop, dine and purchase online. The highlights of the Travel Card are card is available in nine currencies, safe and easy way to use and carry foreign currency, this card can be frequently reloaded as per the request, accepted worldwide at over 1.6 million ATM, 25 million merchant outlets asn websites verified by VISA, four digit PIN will help to secure all ATM transactions, signature based security for transactions at merchant outlets, 24 hour call centre support for blocking lost/stolen card and balance amount can be exchanged at identified branches.  

http://www.daijiworld.com/news/news_disp.asp?n_id=130174

Tier I capital of 12% to reduce risk for NBFCs: Usha Thorat

Director of Centre for Advanced Financial Research and Learning (CAFRAL) Usha Thorat tells CNBC-TV18 that they have recommended increasing the tier I capital of non-banking financial companies to 12% so as to reduce their risk to sensitive sectors……………………..

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XLRI meet on financial inclusion

....The event is planned to cover broadly the emerging areas of innovations in financial inclusion, social finance, insurance, and risk management for asset poor and marginalised communities. Over 60 speakers from industry, RBI, Nabard, SEBI, BSE, SBI, SIDBI, and other stake holders are to participate in the event.

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Extract: 'Emerging India' by Bimal Jalan

Bimal Jalan is one of India's well-known economists. He was Governor of the Reserve Bank of India from 1997 to 2003. He has held several top positions in the ministries of finance and industry and in the Planning Commission. He was also Chairman of the Economic Advisory Council to the Prime Minister and represented India on the boards of the IMF and the World Bank. His book 'Emerging India' was recently published by Penguin India.

Here is an extract from the book..............

ASSOCHAM reservations over Basel III

Industry body ASSOCHAM on Wednesday expressed reservation on earlier implementation of stringent Basel III draft guidelines for banks as proposed by the Reserve Bank of India (RBI) due to existing strong regulatory and provisioning norms ahead of the global benchmarks already in place………………

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Growth to improve next fiscal on rate cuts: RBI

........"...we give guidance in our quarterly policy statements in October and again in January, which is to say that the tightening has peaked, and from here onwards, it's that we've got to come down, that we have to start easing," ..............

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RBI Deputy Governor - CRR cut possible, if needed

OMOs better than CRR cuts

.... After releasing Prime Minister’s Economic Advisory Council (PMEAC)’s Review of the Economy for 2011-12, Rangarajan, who was RBI governor in 1990s, said: “In my view, OMOs are better instruments as you can calibrate and time it according to liquidity conditions. I have favoured OMOs as appropriate instrument for injecting liquidity into the system.” His comments come a day after the Reserve Bank of India deputy governor Subir Gokarn said the central bank will consider another CRR cut to infuse liquidity into the system......

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The modernization of old private banks

...... The quaint animal, ‘old generation private sector banks’, is a species created by the age-old system of the Reserve Bank of India’s (RBI) classification of Indian banks. This group comprises private sector banks that existed before a fresh set of licences were given to set up ‘new’ private banks in the early 1990s. But the current public sector banks – except the State Bank of India group – are themselves a product of nationalization of many of these old private banks. So, the remaining ‘old generation private banks’ are simply the ones that were considered unimportant for nationalization.....

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Walls and laws

.....However, in 2009, after 14 years to mull the issue, the Bombay HC upheld the Lawyers Collective’s challenge to the RBI’s permission, ruling the Advocates Act 1961 applied to litigation as well as non-litigation practice, and non-Indian nationals can enrol as advocates in India only if, reciprocally, their country allows Indian lawyers to practice in the same manner there. ......

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No spectacular turnaround in growth likely: RBI

....There is no “big difference between 6.9 per cent and 7.1 per cent or below seven per cent,” he said, adding that the country is aspiring for 8.5 per cent to 10 per cent growth. “It has definitely slowed down. Next year also we don't expect a spectacular turnaround… at least that is not seen if we continue to work the way we are working,” said Dr Chakrabarty.....

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Don't take economic growth for granted: FM

Acknowledging that growth has now slowed to less than seven per cent, Pranab says the RBI's tight money policy has impacted investment and consumption growth through high cost of credit………………

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Review of Economy 2011-12: Summary

.......Adequate safeguards needs to be taken to prevent any negative fallout of the government borrowing programme on the financing needs of the private sector. It must be incontestably demonstrated that government finances are indeed on the path of fiscal consolidation thus reinforcing the final pillar of macroeconomic stability.

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RBI not to interfere in banks lending to Kingfisher

Bangalore, Feb 22: The Reserve Bank of India is not opposed to “professional decisions'' of banks like State Bank of India extending support to the liquidity-strapped Kingfisher Airlines, a top RBI official said here on Wednesday. Banks are free to lend more money to the airline if they feel the loans can be recovered, said Dr K.C. Chakrabarty, Deputy Governor, RBI, on the sidelines of his interactive session with students at a city college. Responding to a question on whether the RBI is opposed to banks extending additional loans to Kingfisher Airlines, he said, “Absolutely not”. He added that the RBI does not oppose “professional decisions of banks”.  Dr Chakrabarty pointed out that the banks were not only commercial entities, but risk-taking entities too. “If they feel that by supporting a unit, the unit can survive, they must explore that possibility,” he added. According to him, if the bank felt that by giving a little more money, it could get back the entire money, “that's what they will do”. There have been unconfirmed reports of SBI extending an additional loan to Kingfisher Airlines, despite the account turning a non-performing asset for the bank. A bank official belonging to the lending consortium told Business Line that the airline has requested for an additional short-term funding of Rs 200 crore from the consortium, adding that the banks were yet to take a call on the proposal. The 13-bank consortium has a total exposure of over Rs 7,000 crore to Kingfisher Airlines, of which over Rs 4,000 crore are in the form of term loans.

HBL

Banks undecided on lifeline to Kingfisher; airlines files new schedule

.... consortium of banks, led by State Bank of India, is looking to provide additional funds to the airline, despite some banks declaring it a non-performing asset. This despite the Deputy Governor, Reserve Bank of India, Dr K.C. Chakrabarty, telling newspersons in Bangalore that banks were free to lend more money to Kingfisher Airlines if they felt the loans could be recovered......

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MSMEs told to look for alternative funding sources

....Mr J. Meghanath, Deputy General Manager of RBI, said the apex bank had issued guidelines to banks for meeting the necessary credit requirements of the MSME sector. Banks have to achieve 20 per cent growth in MSME lending every year........

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HDFC Bank to go ahead with rollout of own ATMs

Private sector HDFC Bank does not intend to cut on its automated teller machines ( ATM) rollout plan in spite of the Reserve Bank giving an in- principle nod for white label ATMs, which will be operated by nonbanking companies. The city- headquartered lender, which presently has over 7,000 ATMs, will not cut its ATM rollout target as a result of the RBI's draft guidelines allowing nonbanking entities to set up ATMs, also called as whitelabel ATMs, HDFC Bank Head ( Direct Banking Channels) Rahul Bhagat said. Meanwhile, HDFC Bank tied- up with Visa and Monitise- promoted Movida to facilitate mobile- based transactions for its debit and credit card- holders.  

FPJ

Right facts, wrong conclusion

.....The policy of intervention and market controls was, in general, seen to be a success. But one must keep in mind the fact that the policy was a ‘success’ when RBI was not leaning against the wind. Should the policy of pegging the exchange rate involve RBI trying to influence markets in a direction opposite to that of the markets, the impact of a small intervention would be inadequate. To have a significant impact on a large, liquid market in order to defend a currency may involve much larger intervention........

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Is the rally a replay of 2010?

.... Unlike in 2010, central banks are not in the initial stages of tightening monetary policy but have instead started to loosen their purse strings. That’s a huge difference. Reserve Bank of India (RBI) deputy governor Subir Gokarn can take the credit of being one of the few who predicted this rally, when in a speech in early November 2011, he said that if a sustainable solution to the European sovereign debt problem emerged soon that would lead to global portfolio rebalancing among investors, which would mean more capital flows to India, which would result in less pressure on the rupee and, therefore, lower inflation, which would allow the interest rate cycle to turn, thus improving growth. Of course, it’s not as simple as that.....

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Economic confidence index: India at 4th

The uncertainties surrounding the world economy and a high fiscal deficit has pushed India to fourth place globally in terms of economic confidence of the people, a survey has said...............

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Indian Banking Sector: Towards the Next Orbit

Inaugural address delivered by Dr K. C. Chakrabarty, Deputy Governor, Reserve Bank of India at 9th Advanced Management Programme at IMI, Delhi on Feb 13, 2012

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RBI’s priority lending fiat to hit NBFCs

...... “There are two things which are going to impact us — the 5% cap on bank lending to NBFCs and the overall limit of 6% on spreads, or the difference between the rate at which we borrow funds from banks and the rate at which we lend. The first will restrict credit flow to NBFCs and the second will impact us because our spreads are higher than 6%.”Revankar said the NBFCs will appeal to the RBI on the two issues...............

Story

Bank robbery: Video grab gives clue to suspect

....More than 418 branches of PSU banks in the city lack even the basic surveillance facilities, not even having closed circuit television, thus pose a big security threat to their customers and staff. The Reserve Bank of India had outlined security norms, including CCTVs, burglar alarms and armed guards, for all bank branches as early as 2009. However, most PSU bank branches continue to flout these norms citing red tapism......

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‘Class A' fake notes stump officials

DUBAI: Counterfeiters are throwing up a huge challenge to authorities and money exchange houses by using increasingly sophisticated techniques to forge notes with most of the security features used in real currencies, forensic experts said. In this cat and mouse game between cops and forgers, the Indian rupee has emerged as the currency of choice, overtaking the US dollar in 2011, accounting for 10,700 pieces — or 44 per cent — of the top five fake bank notes (24,000) of different countries seized by Dubai Police last year................

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