RBI to relax policy norms to encourage banking in Uttarakhand

....."The Reserve Bank and the government, as the case may be, will relax the policy guidelines to see that there is greater penetration of banking system in the hilly areas," RBI Governor D Subbarao told reporters after the central bank's board meeting here........

 

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

Reserve Bank's G. Gopalakrishna: 'We Have No Target for the Rupee'

The Indian rupee has been falling very sharply in recent months. G. Gopalakrishna, Executive Director of the Reserve Bank of India (RBI), says that the central bank's principal job is to monitor volatility, not value. Gopalakrishna has been a central banker all his working life; he joined the RBI in 1980. He is currently executive director of the Deposit Insurance & Guarantee Corporation, an RBI affiliate. On a related issue, he says that full convertibility of the rupee is not on the horizon.

An edited transcript of the conversation follows...............

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

Real time gross settlement delays payment of Nagpur Municipal Corporators contractors

....If you use the RTGS route, the money goes through RBI. Even if there is a minor mistake in the form describing the work and payment, it gets rejected. That is why we are advising the contractors to open an account with us. Then there would be no formalities involved.".....

Read..........

Tender exact change, govt tells shopkeepers in Meghalaya

.....It has been observed that shopkeepers are offering chocolates in lieu of the balance money/exchange that they have to return to customers, East Khasi Hills deputy commissioner Sanjay Goyal said. Violation of the instruction shall invite stern action which may go up to the extend of imposing penalties on the shops under relevant provision of the laws, he said. Goyal said the shopkeepers are responsible to tender exact changes to customers as the Reserve Bank of India has clarified that there is no shortage of coins.

Read............. 

RBI, finance ministry differ over rural bank branches

The Reserve Bank of India, RBI, and the finance ministry seem to have differences on the way banks should go about ensuring financial inclusion. While both the regulator and the ministry are passionate about providing banking services at low cost to the disadvantaged, a difference of opinion between the two has confused bankers...................

Read.....

A road India needs to travel

India has had a long history of initiatives to bring about financial inclusion since 1947. The Reserve Bank of India (RBI) and the ministry of finance have been striving to achieve financial inclusion through a series of programmes starting with nationalisation of the Imperial Bank to State Bank of India in 1955, introduction of cooperative banks, State takeover of major banks in the 1960s, opening of regional rural banks, priority sector lending programme, banking correspondent model, the no-frills account etc. However, all these initiatives have met with limited success..........

Read - Hindustan Times

The forex problem

This refers to my article “Ways to handle forex crisis” (Business Line, May 24). Inter alia, I have proposed that the Reserve Bank of India (RBI) open a refinance window for foreign exchange loans issued by commercial banks. When the bank intervenes in the market to stabilise the exchange rate, it sells dollars absorbing rupees, thus causing a shortage of liquidity, apart from a decline in reserves. To offset the shortage, it has to engage in a debt buyback operation. If the suggestion on a refinance window is adopted, the problem of rupee liquidity will not arise as the transactions will be in forex. The reserves lent will return to the bank when repayments are made, apart from the RBI earning a better yield than what it is now.

- A.Seshan (HBL)

Rupee slide: Why is the RBI not doing anything?

..........The inter-bank forex market would immediately drop within the said band. Why is RBI not taking such a step? Possibly, the RBI is a little uncertain that such an action would deplete forex reserves of the country (hovering around $290 billion) with the belief that authorised dealers would be on a dollar-buying spree at the rate of Rs 49.40. Such a belief is unfounded. India continues to be a highly-regulated forex market. Authorised dealers have to be square or near square in respect of their forex positions as at the close of business hours each day. RBI also prescribes overnight limit of forex position for each bank. No authorised dealer can buy forex from RBI and offload it in the international forex market...........

Read..........

RBI cracks down on exporters, banks Rs sees sharp rebound

The Reserve Bank of India (RBI) on Thursday threatened exporters and banks with penal action if they were found violating its instructions on converting dollar funds into the domestic currency in a fortnight.

The central bank’s move came on a day the rupee saw sharp swings —

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

Spate of regulations change face of financial sector

....Removal of priority sector status for gold financing firms, loan-to-value (LTV) cap of 60% on gold loans, guidelines on securitization, recommendations for PSL and Usha Thorat committee recommendations for NBFCs intend to bridge the regulatory gap and strengthen balance sheets.............

Read............. 

Subbarao indicates more interventions over Re slide

.....The rupee has been falling for the last three-four months, especially after some appreciation in January-February. The RBI has taken action to improve current flows and curb speculation. The rupee movement is a function of external factors, the capital account and other factors like balance of payments. Some structural changes are necessary for improvement in the current account,” .......

Read.......

Watch the video.......

Declining value of rupee a heartburn for all

...“The fall in the value of rupee is a gain for exporters. But it is not good for the economy. The government, the RBI, and the finance ministry have to take steps to see that rupee does not fall further. Ultimately, all losses will have to be borne by the common man,”........

Read.........

Surge in April inflation a surprise: Subbarao

...We noted that inflation has been a surprise upside for month of April...We will consider how the inflation scenario has evolved. We will take into account the growth statistics and take a decision," RBI Governor D Subbarao said while addressing a press conference after the board meeting...........

Read......... 

It’s not just about depreciating R

.....The government and RBI need to avoid this trap. The Chairman of the Prime Minister’s Advisory Council, Dr Rangarajan, has been constantly communicating on the exchange rate in the past two weeks. About a week ago he said RBI should not allow temporary ebbs in the capital flows to unduly impact the exchange rate. That gave the impression that RBI would defend the currency by selling dollars in the market. Indeed, RBI did sell dollars in the market on several occasions to counter the speculators. However, the expectation was that RBI will come down with a sledgehammer if the exchange rate weakened beyond R54-55. Those levels have got breached now, creating a further scare in the market. Some feel RBI has been a bit half-hearted.......

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

RBI to take steps to arrest rupee fall: Subbarao

Dehradun : "RBI will do whatever is necessary. Some structural changes are necessary for improvement in current account. Meanwhile, the RBI is monitoring the situation and we will do whatever is necessary, consistent with our policy," RBI Governor D Subbarao said while addressing a press conference after a meeting of the central bank board here.................

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

Running on empty: Why 8-9% growth isn’t coming back

.......As RBI Governor D Subbarao has repeatedly pointed out, it is these supply-side constraints that have kept inflation unsustainably high, despite extraordinarily high interest rates last year, which in turn choked off yet more growth.......

Read.......