K R Kamath tipped to become RBI dy guv

K R Kamath, currently the Chairman & Managing Director at Punjab National Bank (PNB), is tipped to move to Mumbai’s Mint Road as a Deputy Governor at the Reserve Bank of India. Kamath’s move to the central bank is being talked about to fill a probable vacancy that could arise if K C Chakarabarty, one of the DGs at RBI, moves to Manila as an Executive Director at the Asian Development Bank. One DG position at the central bank is always filled with a person from the commercial banking space, usually by a chief of PSU bank. Incidentally, prior to joining RBI as a DG in June 2009, Chakrabarty also served as the CMD of Delhi-headquartered PNB.

 

TOI

Forget Mussoorie, hold meets at HQ: FM to PSBs

State-run bank executives are the first victims of a fresh round of austerity drive that finance minister Pranab Mukherjee warned about in Parliament last week. His ministry has sent a circular to all public sector banks, directing them to hold their board meetings at their headquarters and not at tourist destinations. "It was brought to our notice that banks hold their meetings in tourist destinations such as Goa or at hill stations on the pretext of interacting with the local staff," said a finance ministry official.

Interestingly, the diktat to state-run banks comes at a time when the board of the Reserve Bank of India is meeting at Mussoorie..........

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An RTI test looms for a regulator

.....The Reserve Bank of India (RBI) has challenged an order by the Central Information Commission (CIC) asking the central bank to disclose names of the top 100 industrialists who have defaulted on loan repayments. In a writ petition to the Delhi high court, which is scheduled to be heard on 29 May, the central bank has argued that provisions of the RBI Act, 1934, prohibit disclosing credit information relating to bank customers and that doing so will violate confidentiality. RBI has asked the court to quash the order...........

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Central Vigilance Commission reconstitutes advisory board to check commercial frauds

....The board will have a tenure of two years. It would form part of the organisational infrastructure of the CBI and the Reserve Bank of India, providing the required investigative and secretarial services. "The Board's jurisdiction would be confined to those cases where, in disagreement or dispute with the Bank, Public Sector Undertakings or financial institution, the CBI desires to register a Regular Case or Preliminary Investigation in respect of an allegation of a fraud," an order said. Besides, it may also advise on any other technical matter referred to it by the CBI or the CVC. The board, under the chairmanship of former Deputy Governor of RBI Shyamala Gopinath, will be based in Mumbai but it can meet anywhere in the country at its convenience........ 

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India's macro-eco situation has suddenly worsened: Assocham

....This would be catastrophic and depress the demand in the manufacturing sector, the largest employment source after agriculture and services, it said. However, the chamber hoped that RBI will take a balanced view when it reviews the credit policy next month.......

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RBI taking steps to check rupee slide: Pranab

....Mr. Mukherjee said the RBI was taking steps to check the depreciation in the Indian currency from time to time.RBI recently indicated that it may sell dollars directly to oil companies to ease pressure on the currency. Besides, it has already taken steps to curb speculation in the forex market and increase the inflow of foreign currency...........

Read - The Hindu

Half-hearted efforts

This refers to “Reforms not put on the backburner: Bansal” and “Rupee fall continues, hits 56 to a dollar” (Business Line, May 24). On the reforms front, the Government is so used to rollbacks, that it prefers to bring in half-baked measures to show that it is doing something and project that the coalition partners and opposition parties are the stumbling block. On fuel prices, the Government should have arrived at an auto-linkage formula vis-a-vis the crude oil basket's price. On the rupee front, the RBI is inching forward in uncertain times, especially because the economy is so interlinked with foreign markets that no monetary or forex measure can stand the test on its own. The RBI's firmness appears to be the right stance at this stage.

- K.U. Mada Mumbai (HBL)

NRIs beware: Best time to remit cash ending?

.....However, recent moves like hiking the petrol prices by the government and the sale of dollars by the RBI at least show intent by Indian authorities to do something about the rut. While this in itself may not be enough, the fact that the rupee has already depreciated by more than a quarter in less than 10 months, and that the Indian economy is still growing, albeit slower than before, may help support the rupee at current levels................

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On a downhill course

.....Amidst all these, there have been very few explanations from the Reserve Bank of India and the government, which can be considered original. It is this apparent helplessness as much as the actual fall that is truly baffling. One must remember that the recent rupee-dollar movements are being dictated by market forces and not induced by any RBI action. Recent declines, unprecedented as they are, have left policymakers nonplussed and scrambling for rational explanations. Failure to identify specific causes, in turn, suggests that countervailing policy measures, even if feasible at all, cannot be effectively targeted within a given time span.........

Read - The Hindu

Easing interest rates may not be an easy task for RBI

..............."Given the forex volatility and RBI interventions, liquidity has remained tight and government induced inflation pressure still remains high, so the RBI will have little room to cut rates immediately,'' ..................

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Rupee likely to slide further

....The PPP theory is based on the idea that currencies are in equilibrium when their purchasing power is the same in each of the two countries. The PPP theory suggests that a currency would appreciate or depreciate vis-à-vis another currency to the extent of the inflation differential between the two countries.........

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Rupee: depreciated tactics - Renu Kohli

.....There is little doubt that the measures the Reserve Bank of India (RBI) has taken to increase the inflow of foreign capital are remedial in nature and not really aimed at fighting a fundamental exchange rate adjustment. The central bank is more managing the pace of currency depreciation than supporting the rupee at this or that level. With foreign exchange reserves down to six months of import cover, short-term debt above 40 per cent of overall external debt and significant foreign currency liabilities due for repayment in the near term, the RBI knows better than anyone that it can only do so much and no more. The RBI also must be conscious of the fact that it did not buy any foreign currency to accrete reserves when the rupee was on the upswing since 2009. But it is now forced to sell to moderate the depreciation, which is unsustainable beyond a point as it will only deplete reserves.......

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High govt spending makes it hard for RBI to act decisively: Derrick Irwin, Portfolio Manager, Emerging Markets, Wells Fargo

..........We are worried that government paralysis will continue to act as a drag on investment spending and lead to a lower rate of growth. India faces numerous headwinds to growth, and the Reserve Bank of India (RBI) and the central government are at odds over economic policy. While RBI has room to stimulate the economy by cutting rates, we fear that profligate government spending will make it very hard for RBI to act decisively. Further, India remains ....................

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India's balance of payments: The alarm bells are ringing

.....The problem was not with services alone. As the RBI notes in its report on India's balance of payments, export growth decelerated in October-December 2011 while imports continued to rise largely due to high international commodity prices and inelastic demand for gold and silver. Here it is important to remember and the RBI reminds us that the advanced economies of the West still shape India's export-fortunes; so while the Commerce Ministry and commentators may appear innovative in seeking new markets for India's exports, the fact remains that the largest part of export earnings come from the US and Europe and other major western economies.......

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Exporters rattled as some buyers demand quotes in rupees

.....Exporters plan to approach the Reserve Bank of India (RBI) to review its recent directive requiring exporters to offload 50 per cent of their foreign currency holdings in the exchange earners' foreign currency account. Already, exporters have complied with it, bringing a gush of dollars into the market — a move that has not helped stabilise the rupee...........

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My View on "Electronic transactions"

In the case of electronic transactions, even an agency commission of Rs 12 migt leave more margin for a bank than a payment of Rs 50 for a transaction done thru  a cheque payment.It does not seem likely that a customer would not put through an Electronic transaction just to enable banks earn more commission per transaction. 

- A.Chandramouliswaran

Gold loan firms’ profit drops after RBI norms

.....Gold loans business in the country has been adversely impacted due to developments in the past few months, particularly the Reserve Bank f India (RBI) regulations that placed many restrictions on the lending practice of the companies. The RBI censured two companies – Manappuram and Muthoot Fincorp – for using their branches to accept deposits from the public unlawfully. This led to investor skepticism against the sector and resulted in drying up of borrowing sources.......................

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Rajat Gupta under ED scanner

.... A confidential report of the Reserve bank of India accessed by The Sunday Standard reveal the modus operandi of the troika. Incidentally, Gupta and Vangal are co-founders of the IT company, Scandent Solutions. Gupta and seven NRI investors led by Vangal picked up 24.93 per cent equity in TMBL with the clear understanding among themselves to acquire substantial TMBL shares and get representation on the bank’s board. “The share transfers in favour of seven foreign investors were in violation of FEMA provisions. Some of the investors have either not provided any information towards the acknowledgement process or have not responded to the specific information sought by the RBI,” states the March 2011 order of RBI Deputy Governor Anand Sinha. In Rajat Gupta’s case, the Foreign Exchange Department (FED) of RBI during the investigation revealed suspicious transfers of shares allegedly masterminded by Rajat Gupta.......

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