RBI to pack in additional stringent steps for banks

In an interview to CNBC-TV18, Anand Sinha, RBI deputy governor, shared his view on the initiative taken by the regulator in the banking space.


Below is the edited transcript of his interview to CNBC-TV18............

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3 pvt banks to insist on minimum balance every month

The top three private sector banks have tightened their minimum savings bank deposit balance norm. Against the normal practice of maintaining minimum average quarterly balance, these banks want customers to maintain minimum balance on a monthly basis. What this means is that customers will have to keep higher balances. The move to get customers to maintain minimum balance on a monthly basis follows the Reserve Bank of India deregulating the savings bank deposit rate in October 2011. The RBI has not stipulated any minimum balance to be maintained in savings accounts to any bank. The RBI guidelines only state that accountholders should get from their banks a month's notice on any change in the minimum balance norm........

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Slowdown in growth likely to continue

The worst of the economic slowdown could still be ahead of us, according to a new RBI working paper. The paper ‘‘Evidence of Interest Rate Channel of Monetary Policy Transmission in India'', has suggested that an increase in policy interest rates is associated with a fall in real GDP growth rate. The maximum decline in GDP growth occurs with a lag of two quarters with the overall impact continuing through six-eight quarters ahead...............

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Textile, finance ministries to meet next week

The textile and finance ministries are expected to meet next week to discuss restructuring of loans for the textile sector, according to sources. Representatives of the Reserve Bank of India may also attend the meeting. The textile industry, ..............

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My View on 'The paradox of forex reserves'

It is a fact that our Forex Reserves Management has not been getting the attention it deserved, as it depended on borrowed expertise and RBI’s own priorities hovered more around internal debt management and monetary policy concerns. It is comforting to see that RBI governor is focusing on the components of forex reserves and their vulnerabilities. As the returns on forex investments were not encouraging, there has been some complacency in augmenting the reserves position, resulting in the reserves stagnating around $300 billion for quite sometime now. On the part of GOI/RBI, it was a late decision in the last quarter of 2009 to increase the gold component in the country’s forex reserves by about 200 tonnes, by a purchase from the International Monetary Fund. In the context of improving the country's image as one with a decent net-worth, it is important to manage the domestic gold-holdings outside the forex portfolio also and make them visible and available as part of nation’s resources. Let us no forget the 1991 episode when solid gold had to be carried abroad for pledging and borrowing. Such shameful experiences can be avoided in future, if a part of domestic stock of the estimated 18,000 tonnes of gold is made tradeable and part of the ‘stock’ of standard gold.

- M.G.Warrier

India's forex reserves drop by $1.80 billion

....Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.74 billion to $256.11 billion during the week ended May 18, according to the Reserve Bank of India's weekly statistical supplement. The RBI did not provide any reasons for the change in foreign currency assets...........

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Rupee fall: Reserve Bank of India can do little to help

.....More than the magnitude of the rupee's depreciation, it is the speed of the decline that is troubling RBI. The recent slide has not caught the central bank unawares . Last year, when the greenback gained, the exchange rate reached 54.305 rupees to the dollar on December 15, 2011. This was an all-time low for the rupee, which had hit a year's low of 43.855 on July 27 - a 23.83 per cent drop in 91 trading days..........

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Does the Indian economy have a 1991 crisis feel?

...Last month, in a panel discussion (attended by the prime minister, Manmohan Singh who was the finance minister in '91), RBI governor D Subbarao pointed to macro numbers which were approaching '91 levels. "That is quite a disturbing picture," he said (as quoted by Reuters). "Nevertheless, I would still argue that in 1991 an implosion was imminent, in 2012, an implosion is not." ....................

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Rupee may Rebound to 52-levels in 6 months: Barclays Capital

.......Barclays Capital said the RBI may eventually opt to float dollar denominated bonds through public sector banks (like State Bank of India) for non-resident Indian (NRI) investors. If well designed and executed, we think, such a scheme could trigger $12-15 billion of inflows in a relatively short amount of time, the report added. While we expect the RBI to cut repo rate by a further 50-75 basis points by March 2013, we think it is likely to maintain a more neutral bias in the next one or two policy meetings after the larger-than-expected 50 basis points cut in April.

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Bank trade unions threaten to go on 2-day stir in July

.....GD Nadaf, Convenor of United Forum for Bank Unions (UFBU) said the central government offices and RBI were working five days a week and asked why banking industry cannot be brought on the same pattern. “An avoidable expenditure towards fuel, water, energy are incurred for half a day work on Saturday. Instead, one-hour working hour may be increased for five days in a week,” ...............

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This summer, reap the benefits of travel cards

...........Pre-paid travel/forex cards score over the other options. When you load your card locally, you lock into the exchange rate prevalent on the day you buy the card. With the US dollar being a widely accepted currency across the world, at no time does this proposition make more sense than now. Swiping your credit card when the rupee is depreciating will make you shell out more for every dollar..............

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Samajwadi Party toes Mamata line on UPA support

.....He has asked Mukherjee to direct RBI governor D. Subbarao to get NABARD release the amount. The UP chief minister has also written to the RBI governor in this regard and has marked a copy to agriculture minister Sharad Pawar as well.....

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