RBI dy guv Chakrabarty may be India rep at ADB: Sources

..........Come July, the RBI could be on the hunt for a new Deputy Governor. According to sources in the finance ministry and RBI, Chakrabarty could be headed for a bigger and better role as the Indian representative at the Asian Development Bank pending government approval..................... 

Watch the video.................

RBI announces SAARC swap arrangement

.........With a view to strengthening regional financial and economic cooperation, Governor Dr. D. Subbarao announced in the 24th SAARCFINANCE Governors’ Meeting, in Pokhara, Nepal, that the Reserve Bank of India will offer Swap Arrangement of US$2bn both in foreign currency and Indian rupee. The facility will be available to all SAARC member countries, viz., Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. With launching of this facility, member countries can now approach Reserve Bank of India for availing of the facility...................

Read........... 

‘We're already geared to meet proposed norms'

What recommendations of the Usha Thorat Committee will be implemented, in your opinion?

Higher capital requirement for NBFCs (12 per cent tier-1 capital) will surely be implemented. Recognition of non-performing loans after 90-day due, instead of 180 days, may also be implemented. Directionally, the RBI is saying that NBFCs should be more prudent in the way risk capital is being provided. While we would like the RBI to govern us more we would also like to be given a level playing field. The RBI shouldn't worry that credit to NBFCs is going up.............

Read...............

As policymakers, we can’t... tell markets how to behave: D SUBBARAO

.....“God does not play dice.” Less well known perhaps is the retort of his friend and mentor Niels Bohr who said: “Albert, stop telling God what he can or cannot do.” Similarly, it is possibly the case that all market signals are not objective. But as policymakers, we cannot presume to tell markets how to behave..........

Read - Indian Express

36 districts in Bihar lack proper banking facilities: Sushil Modi

.....Modi said that there was one bank branch in the state per 21,358 population which was far lower than the national average of 14000 people per branch. Efforts were on to set up ultra small branches in the state as per the RBI guidelines, he said........

Read.................

Mobile — A game changer for financial access

...........The Government and the RBI have been emphasising on financial inclusion and enabling basic banking and financial services to reach the vast majority of the population. Conventional banking, in the form of retail outlet branches and ATMs, is still too expensive to be cost-efficient in many areas. Hence under the three-year financial inclusion drive, banks were tasked to cover all villages with population more than 2,000 by March and are working towards reaching out to all villages in a time-bound manner. ............

Read................

Axis Bank, Airtel tie up to offer mobile banking

.........However, KC Chakrabarty, Deputy Governor of Reserve Bank of India (RBI), who spoke at the event said, “I caution that such tie-ups should not be to just provide remittances. Financial inclusion is also about providing deposits, advances, and all other banking products to customers. You may capture a customer on the basis of remittances but provide him with all products.”.......

Read...............

Electronic payments up, but cheque transactions higher

Cheques are still the preferred mode for making high value transactions in the country, RBI data shows. Use of electronic payment systems gained traction in 2011-12, but the volume and value of transactions was far less than cheque payments......................

Read.................

Watch out for insider trading

The Reserve Bank of India (RBI) intervenes in the foreign exchange market through the medium of commercial banks to stabilise rates. We are living in times of instant communication and real-time processing of information. Are enough checks and balances in place, either before or after the transaction, to prevent insider trading, directly or indirectly, by those with advance knowledge of the matter? Should we wait for another scam to break out before thinking of such preventive steps? The central banks in the West, South East Asia, Japan and Israel intervene directly in the market without any intermediary. Can the RBI follow this procedure so that the number of people privy to the transactions is at a minimum? What is the merit of the current procedure? There is only an enlargement of the risk. There is also a conflict of interest when an authorised dealer is entrusted with market intervention.

- A Seshan, Mumbai (BS)

Government securities scam comes back to haunt central cooperative banks

......NAGPUR: A decade after it rocked the state's cooperative banking sector, government securities (g-secs) scam is now threatening the very existence of a couple of banks in the region. However, it is expected RBI may ensure that the depositors' interests are safeguarded even if the banks face action......

Read............ 

RBI seeks forex conversion data

Even a week after the Reserve Bank of India (RBI) asked Exchange Earners Foreign Currency (EEFC) account holders to convert half their dollar funds into rupees, the measure has not yielded the desired results. This has prompted the central bank to seek data from banks on how much individual companies have converted till now. Such account holders had been given 15 days to meet the requirement...........

Read........

Use of forex reserves

Use of forex reserves to arrest slide of rupee is a short term measure, which will be resorted to by the central bank in emergent situations. Perhaps, eminent economists and statesmen should use their clout to persuade GOI to take long term austerity measures(austerity is a bad word for the rich and the powerful and the beneficiaries of their magnanimity) like having some control on import of luxury articles including aeroplanes and cars as also celebrations involving forex where there is no corresponding 'inflow' benefit. A recent report indicated that import of gold was 4 to 5 times of the average export of gold products including jewellery. Despite having a handsome domestic stock of over 18,000 tonnes(according to World Gold Council estimates, which must be conservative) at least a sizeable portion of which could be exploited, given the will, gold is being imported in large quantities, year after year.

M G WARRIER

RBI can’t save the rupee

.....Intervention can be useful only when the pressure on the currency is transitory. RBI has already spent more than $20 billion this year until two months ago in defending the rupee. Reducing day-to-day volatility and smoothing out currency depreciation has few known benefits. Further, the current pressure on the rupee is not caused by temporary factors......

Read...........

RBI to curb rupee volatility, not support value: DG

As the rupee dipped to its all time-low of 54.46 to a dollar today, leading to increasing calls for arresting its fall at any cost, RBI Deputy Governor K C Chakrabarty said the Reserve Bank intervenes in the forex market only to curb volatility and not the slide........................

Read.......

Wobbly Re complicates RBI efforts

The rupee fall has complicated the efforts of the Reserve Bank of India on the monetary front. At a time when the industrial production growth declined by 3.5 per cent and inflation surged to 7.23 per cent, the 9 per cent fall in the currency in the current fiscal is set to add to inflation and inflationary expectations and slow down the central bank’s initiative to kickstart growth and bring down interest rates..........

Read - Indian Express

RBI officials resigned to weaker rupee

The Reserve Bank of India (RBI) accepts that it is fighting a losing battle in trying to stem a fall in the rupee, a slide that has mirrored the slump in the once high-flying emerging market. The force of dollar demand is such that the Reserve Bank of India can do little to check the fall, central bank officials say. "We may prop the rupee for sometime by this way or that, but it is not enough," said a senior RBI official directly involved in currency management.......................

Read.............

Rupee's fall partly due to global factors: RBI

The sharp fall in the rupee to a record low on Wednesday is partly because of global factors, HR Khan, a Deputy Governor at the Reserve Bank of India, said. "The RBI is aware of the situation. We have taken steps and will take further steps if necessary," he said at the sidelines of a summit of South Asian Association for Regional Cooperation in Nepal. The rupee slid to a record low of 54.46 to a dollar, succumbing to the steep risk aversion hitting global markets and highlighting the vulnerabilities of a country facing challenging fiscal and economic outlooks.

http://www.moneycontrol.com/news/commodities/rupees-fall-partly-due-to-global-factors-rbi_705096.html 

RBI digs deep but rupee sinks further

..........“Apart from weak domestic economic fundamentals, the global conditions are not strong either. The downside to the rupee from here essentially depends on the strength of the measures taken by the RBI and the government. Clearly, only intervention in the foreign exchange market is not enough to arrest the fall,” ...............

Read............