India's Subbarao contrasts Fed and ECB's roles during financial crisis

Reserve Bank of India (RBI) Governor Duvvuri Subbarao said on April 9 how the co-ordinated international response to the current financial crisis comes in stark contrast to the un-co-ordinated actions during the Great Depression of the 1920s and 1930s, when the "animosities of the inter-war period prevented a co-ordinated policy response". But Subbarao added during the opening address of the Fourth PR Brahmananda Memorial Lecture in Mumbai, that ..........

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RBI may consider easing forex trading curbs: Deputy governor

…….The Reserve Bank of India will consider gradually relaxing curbs on intra-day position limits in the forex market that were imposed in December to curb speculative bets on the rupee, a deputy governor said. The central bank will consider such measures "within the overarching prerequisite of facilitating genuine hedging needs of the customers," H.R. Khan said in a speech at a foreign exchange dealers' conference in Zurich, which was put up on the RBI website on Wednesday………

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RBI holds meet on currency management

PATNA: The 13th high-power meeting of the Standing Committee on Currency Management (SCCM) for Jharkhand state, falling under the jurisdiction of RBI Patna issue circle, was held on Monday here to discuss issues relating to currency management, including implementation of clean note policy, customer services, availability and retail distribution of notes and coins, detection-impounding-reporting of fake Indian currency notes and movement of treasure. Regional director, Bihar and Jharkhand, Mohit Kumar Singh chaired the meeting. The meeting was attended by SP, CID (EOW) S Tabrez, senior officers from the department of posts, controlling heads/senior officers from major banks in Jharkhand and officers from the issue department, RBI, Patna. SCCM is the apex forum in the state set up to bring together commercial banks and other government agencies on a common platform to discuss and sort out issues/challenges in areas of currency management, keeping in view the broad policy framework and customer satisfaction.

TOI

Obituary

M. SOMASUNDARAM, Aged 82 Retd Staff Officer Grade-B RBI, expired on 10-4-2012 at his residence in Ayanavaram.  9884027739/9840837739

The Hindu

Business correspondents serving other banks' customers will help expand financial inclusion

.....Technological compatibility is another issue. The RBI says that the technology available with the bank, which has appointed the BC, should support carrying out such operations with other banks. The RBI had mandated that transactions and authentications should be carried out online on a core banking software platform.......

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Moderation in FDI flow worries Reserve Bank

....The Reserve Bank of India (RBI) is concerned over a significant moderation in the flow of foreign direct investment (FDI) into the country in 2010-11. This moderation in FDI flow must be read in the context of other emerging market economies in Asia and Latin America receiving large FDI inflows.

According a study by the apex bank, the moderation in investment flows in India despite a faster recovery from the crisis period “appears somewhat inexplicable”......

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Low-cost bank branches under lens

TELLER TALES

* Performance parameters like opening of new accounts, deposits and advances and loan recovery would be examined

* Move to ensure financial inclusion drive is not restricted to meeting branch opening targets

* Customers at low-cost branches are to be serviced by banking correspondents, doing cash transactions where the population lives

* In 2006, banks were first allowed to adopt the BC model for delivery of services in unbanked and under-banked areas

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Mahesh Bank to expand operations in west

..... “We have already obtained approval from the Reserve Bank of India (RBI) to expand our area of operation to the entire states of Maharashtra, Rajasthan and Gujarat. We will be opening a branch each at Surat in Gujarat and Bhilwara in Rajasthan and two in the twin cities of Hyderabad and Secunderabad this year,”........

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CRR: A monetary policy or liquidity tool?

........ Following the CRR cut in January, and then in February, yields on the 10-year benchmark government bonds eased on the hope that interest rates have peaked and a rate cut is around the corner. RBI, however, disappointed the street by holding the rates during the mid-quarter review in March and sounded a hawkish note. The RBI's March statement, along with the high government borrowing numbers announced during the Budget, hardened bond yields. However, there is also a view that CRR should not be seen as either of the tools.

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RBI monetary review: Banking sector focussed on performance

.....Recently, a Reserve Bank of India (RBI) committee under former Union Bank chairman M.V. Nair had proposed that half of all agricultural credit should go to small and marginal farmers. The discussion with bankers will be based on a report prepared by the National Bank for Agriculture and Rural Development (Nabard) and RBI’s College of Agricultural Banking. Nabard officials were not immediately available for comment. Nabard and the RBI wing reviewed the existing credit delivery mechanism to farmers and suggested ways to improve the credit cover.......

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What to expect from RBI on April 17?

.... A combination of economic woes and monetary tightening through tight liquidity and high cost of liquidity has killed investor sentiment and consumer confidence; both considered critical for economic development. The downtrend in growth momentum is sharp (into 6%) against a very ambitious FY13 target of 7.6% while inflation is expected to stay below 7% with support from consolidation in crude oil price and rupee. It is high time for RBI to shift into pro-growth monetary stance; considered critical at this stage to address economic woes relating to growth and fiscal deficit.........

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RBI unlikely to cut rates on April 17

... The banking system’s loan-deposit ratio has hit an all-time high of 78.1 per cent, with deposit growth still remaining below loan growth. Finally the sequential and year on year headline core inflation still remained too elevated to try to revive aggregate demand so soon. The inflation was not in the comfort zone which RBI would like it to be….....

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RBI's hard choice

...... This might be too hopeful, given that the RBI has consistently said that action from the government is needed to give it the space to cut rates. The government’s abdication of fiscal responsibility cannot have any other outcome but to force the RBI to zero in on controlling inflation.

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One cannot make a strong case for rate cuts: Leif Eskesen

...... I think it will be a close call for RBI next week, as one cannot make a strong case for rate cuts. There hasn’t been a substantial shift from inflation risks to growth risks since the last monetary policy meeting. Domestically, in terms of economic activity, there has been some moderation in overall growth. The inflation risks that RBI highlighted........

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Defaulters delay Prudential Bank liquidation

………Officials said Reserve Bank of India's clearance was required for revival of the bank as a society or again to start banking operations. However before that, the liquidation process has to be completed by clearing all outstanding dues. "The proposal of allowing the bank to operate as a society is being examined by the state government. But before giving permission, the amount to DICGC should be cleared," Prudential Bank liquidator and deputy registrar of the department of cooperation B Nanda Kishore told…….

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RBI implements web-based bidding for G-Sec primary auctions

.... Reserve Bank on Wednesday said it implemented its web-based online bidding in primary auctions of government securities. The module on web-based negotiated dealing system auction will allow internet-based direct participation of gilt account holders.......

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Lavasa plays infra card to get RBI leeway on debt recast

.... Now, lenders have approached the RBI, requesting to treat a part of the loan to Lavasa project as infrastructure funding. Till date, banks had categorised loans to Lavasa as exposure to commercial real estate. This, according to the central bank, is a sensitive sector. The banks' exposure to commercial real estate has higher risk weight, which means lenders have to set aside higher capital......

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Banks asked to roll out new farm loan products

.....Recently, a Reserve Bank of India (RBI) committee under former Union Bank chairman M.V. Nair had proposed that half of all agricultural credit should go to small and marginal farmers. The discussion with bankers will be based on a report prepared by the National Bank for Agriculture and Rural Development (Nabard) and RBI’s College of Agricultural Banking. Nabard officials were not immediately available for comment. Nabard and the RBI wing reviewed the existing credit delivery mechanism to farmers and suggested ways to improve the credit cover.......

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Govt plans to regulate pyramid marketing

...MLM schemes are mostly a state subject, according to CEIB. They come under RBI scrutiny if the entities running them function as non-banking financial companies, and under Sebi if listed......

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