We have reached the bottom: C Rangarajan

Would you accept that inflation has become the Achilles' heel of this government?

Inflation is a phenomenon that affects a large section of the country. So, a high level of inflation is not conducive to economic growth and prosperity of the country.

Has the government failed to tackle it?

Earlier, as governor of the Reserve Bank of India, I had taken a very strong position on that and I have always regarded that the primary objective of the central bank is to tame inflation. In the last two years, we have been confronted with a situation in which the strong action to contain inflation was also viewed by some as coming in the way of faster economic growth. The first year of inflation was really food inflation. That is a totally different kind. Come the second year, the food inflation got generalised. In addition to that, there was some food inflation because of the rise in the price of vegetables. Now, any strong action on the monetary authority was viewed by some people as coming in the way of faster economic growth.

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RT Nagar heist: Police turn screws on careless banks

.....While investigating recent robberies of banks in the city, the police have found that all such incidents happened due to the negligence of banks and security agencies who are not following Reserve bank of India’s (RBI) guidelines regarding security arrangements while transporting cash. “Banks and security agencies are not following RBI guidelines because they are insured against losses. If money is stolen or robbed, banks are not bothered because they will get it reimbursed by insurance agencies,” a senior police officer said on the condition of anonymity.........

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Trams go classless as government allows quiet fare hike

..........According to transport minister Madan Mitra, the change finally came out not because of political ideology but for the sake of simple, everyday convenience. CTC was facing a lot of trouble returning change to passengers as there are very few 50 paise coins in circulation, he said. The minister has been harping on this problem for the last two months, and even asked the chief minister to write to RBI about the lack of small change. He reiterated the issue during a press conference on Friday, soon after his meeting with the chief minister, and suddenly announced a fare revision for trams and CSTC buses................ 

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Tour the rare history of currency

Misprinted notes, Satvahan century coins, rare items, old postcards and various other things that would take you on a tour to history are on display at Chatuhshrungi Seva Samiti Cultural auditorium. The exhibition organised by the Numismatic Society of Maharashtra was inaugurated on Saturday and is open till Monday............

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'Textile debt recast will not pressure banks' profitability'

.......The finance ministry will consult Reserve Bank of India for giving a two-year moratorium repayment and convert working capital eroded into term into term loans with three-five year repayment period. The government is also mulling a special provision in non-performing assets norms to avoid asset reclassification for these loans.

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Dhanlaxmi Bank Q4 operating loss widens; union demand RBI enquiry

Dhanlaxmi Bank has posted operating loss of Rs76.71 crore for the quarter ending March 2012, an increase of 110% as compared to a quarter earlier. While the results are clear indication of the poor strength of the bank, there has been no action from the regulator, the Reserve Bank of India (RBI). The bank’s union which has been raising the alarm from long time has demanded an enquiry by the RBI..................

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SBT launches month-long KYC campaign

State Bank of Travancore has launched a month-long campaign highlighting the need for updating of Know Your Customer documents. This is being done with a view to creating awareness among customers about the need to update KYC details, an SBT spokesman said here. Directives of the Reserve Bank of India and the Centre require that all bank accounts be KYC-compliant by June 30...................

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Complain to branch manager first

.....Give the bank 30 days to respond, if no solution is forthcoming you can then approach the banking ombudsman in your area. The contact details are available on the Reserve Bank of India's Web site. The banking ombudsman is a regulatory body that evaluates any complaint from a neutral standpoint and ensures that a customer's concern is addressed..........

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My View on "Are PSU banks trustworthy?":

While the concern is appreciated,let us also remember PSBs have a transparent reporting system. Beyond frauds, financial institutions both inprivate and public sector are forfeiting account-holders' money in the name of 'inoperative accounts', unclaimed deposits and so on where the amounts involved are much larger.There is no public sector-private sector or government divide in appropriating small depositors' funds.The numbers and amounts mentioned here will make sense only if comparative figures of private sector banks as also the types of clientele these banks are handling are also discussed.

- M G Warrier, Thiruvananthapuram

Widespread weakness in GDP components

The Indian elephant is limping. Which means this elephant can't dance — at least not for a while. While the poor industrial production numbers all along hinted at lacklustre economic growth, the services sector that still held the show thus far is now showing initial signs of giving in. If this trepidation is proved right in the next couple of quarters, then urgent measures may have to be taken to shake the economy out of lethargy. And such measures would have to come from the government and not just the RBI............

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India GDP shock: A gasping elephant? Or tortoise?

.......Robert Prior-Wandesforde, a senior economist at Credit Suisse, probably sums up best what all of us feel right now: “It is hard to describe India’s March quarter GDP release as anything other than shocking,” he said in an investor note. He was confident the figures will “send shivers down the spines” of senior politicians, who in turn will pressure the RBI to further slash key lending rates. (We would tend to agree, although it’s unclear whether any of those senior politicians have a spine in the first place.).......

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Falling GDP: Who’s to blame?

.......Finance minister Pranab Mukherjee has blamed the Reserve Bank for high interest rates, and while it is true the RBI has raised interest rates 13 times since October 2010, each time it has been compelled to do so with the government failing to take fiscal steps needed to meet supply side constraints. These constraints fuelled food inflation, which then spilled over to manufacturing. High interest rates of 10-13 per cent for creditworthy corporates has certainly stifled growth: margins are not large enough to absorb such high rates. Demand has also slowed, and many companies can’t utilise even 70 per cent of their capacity. The RBI needs to cut interest rates immediately by at least one per cent, if not more, for growth is as important as inflation concerns. And the RBI must remember it is not the sole guardian of inflation..............

Read - Deccan Chronicle

India must capitalise on the G20 opportunity

......Terms of lending, such as the need for collateral to obtain a loan, has excluded many households from gaining access to funds. The microfinance finance segment routed through the private sector has been mired in controversy, after severe setbacks in Andhra Pradesh. Ideally, the vital components of inclusion stressed by the Reserve Bank of India in a recent speech, would consist of ease of access to funds, particularly to vulnerable population, affordable cost of obtaining funds, and transparency in the process of fund disbursement. These objectives have not been met to a large extent by the above initiatives. In fact, India ranks 50 among 100 nations, according to a world-wide survey that measures financial inclusion with respect to the extent of bank penetration............................

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Outages, limited workforce bruise manufacturing PMI

.............As demand outpaced supply, both input and output prices rose, prompting HSBC Chief Economist for India Leif Eskesen to caution the Reserve Bank of India (RBI) against any monetary easing. RBI is slated to come up with its monetary review next month............................

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Petrol price hike impact on inflation is 10-15 bps: Gokarn

............Petrol price hike, however, may have had an impact on inflation by 10-15 basis points, he adds. Gokarn also believes that fall in oil prices has provided some relief on inflation. The rupee has been losing value against all the major currencies, especially the American dollar, since April and hit an all-time low of 56.52 yesterday. It has shed nearly 24% year-to-date...........

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Subsidies need to be cut: RBI Deputy Governor

.......Mr.Gokarn said that in a situation of increasing demand and falling supply, the depreciation of rupee was inevitable. The rupee-dollar rate had fluctuated in a non-linear fashion, as had happened in the case of several international currencies. Certain currencies were able to resist depreciation.........

Read - The Hindu

Fiscal consolidation critical for high growth

The fiscal consolidation is a critical area in India’s economy and controlling it requires abolition of subsidies, which remains a key factor, Dr Subir Gokarn, Deputy Governor, RBI has said..........

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