The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, June 5, 2012
RBI hints at rate cuts ahead of policy review
RBI unlikely to act on CRR, repo; may look at SLR: BoI
With the upcoming Reserve Bank policy right around the corner, expectations have started building up for some action on cash reserve ratio front from the central bank. Executive Director of Bank of India , N Seshadri, however feels that the RBI is unlikely to move on either CRR or repo rates.............
Read.......
Read.......
No, Subbarao won’t be able to clean UPA’s garbage dump
........The predicament of the RBI was best explained in a recent column titled Seeking Divine Intervention, written by Rajeev Malik, an economist at CLSA. He said: “There are three institutions that keep India running: the Supreme Court, the Election Commission and the Reserve Bank of India (RBI). To be sure, most of the economic mess in India has the government behind it. And often the RBI is called in as a vacuum cleaner. But even the world’s best vacuum cleaner cannot be successfully used to clean up a garbage dump.”
Lower Rates? No Way
The conventional wisdom was that monetary easing was in the offing. With inflation expected to ease and a stimulus required to revive flagging growth, the pundits predicted that the Reserve Bank of India (RBI) would cut interest rates. Sure enough, on April 17 the RBI cut the repo and reverse repo rates by 50 basis points (bps). But there’s a fly in the ointment............
RBI drops hint about rate cut
Mumbai: A fortnight before the mid-quarter policy review, Reserve Bank of India (RBI) Deputy Governor Subir Gokarn hinted at a possible rate cut, prompting a rise in bond and share prices as the markets responded positively to the signal. Adding to optimism was the prospect of a normal monsoon, with the first rains of the season expected to make landfall in Kerala by 6 June. “Growth is somewhat lower than expectations and that may have (a) positive, moderating impact on core inflation. Two, oil prices have come off somewhat more than expected. Those are the two factors that suggest more room (for monetary policy),” PTI reported Gokarn as saying on the sidelines of an event in the city................
Is RBI using wrong tools to fix economy’s problems?
.....RBI’s moves go in the wrong direction. How do we ensure that the price on a financial market is driven by fundamentals? The answer: We must have a deep and liquid market, and a broad array of sophisticated speculators. RBI’s actions are going in the exact opposite direction. They are trying to make the market illiquid. But it is in an illiquid market that we will get market inefficiencies and weird behaviour of the price. They are increasing the chance that something nutty happens on the rupee. This circular is also a reminder about poor legal process at RBI. Every action by a regulator must articulate a rationale. Financial regulations are motivated by exactly two possibilities – consumer protection or micro-prudential regulation. The government agency that wields the power of financial regulation must show the clear rationale, describing what is the market failure that this regulation is seeking to address. The government agency must show the cost-benefit analysis, explaining why the costs of this action outweigh the benefits. As is typical of financial regulators in India today, RBI’s documents show no rationale.........
Facts about official figures : Sujan Hajra
......the public in general and financial market participants in particular are more sensitive to the first data release rather than the subsequent revisions. Keeping such psychological factors in mind, there seems to be an attempt by official agencies to scale down the real extent of economic deterioration during periods of major economic slowdown at the time of the first release of major macro data. Official agencies are entrusted with the responsibility to accurately report the underlying economic conditions. Deliberate attempts to conceal the real picture can lead to wrong decisions and turn a bad situation worse. It also discredits official statistical agencies.
The author is chief economist at AnandRathi Group and has served as Director of Economic Research and Policy in the Reserve Bank of India
PM to review infrastructure development tomorrow
....Another key concern is funding. Almost all the industries have complained that the cost of domestic funds is too high and external assistance hard to get. Keeping this in mind, the Government is likely to advise the Reserve Bank of India (RBI) to take the necessary steps to reduce the cost of funds. The RBI is slated to review monetary policy on June 18.........
Indian banks need huge capital infusion in next 4-5 years
......Though RBI didn’t quote an estimate, it did guide that capital requirements for growth as well as transitioning towards Basel-III are very high. RBI is mindful of the pressure that is likely to put on government finances, especially when it is walking a tightrope with respect to its fiscal state. RBI was categorical that capital requirements are unlikely to be relaxed and the government either has to pare down its stake in government-owned banks (considering that it has 58%-plus stake now in many government-owned banks) or think of a holding-company structure to manage the banks’ capital needs.....
No FII debt threat
A Reserve Bank of India (RBI)-appointed panel has quite rightly called for creating conditions that enable greater participation by foreign institutional investors (FII) in the Government securities or G-Sec market. True, there has been an enormous expansion in the domestic G-Sec market, with annual trade volumes more than doubling to about Rs 31 lakh crore in the last eight years. But much of this is only courtesy a rise in the stock of G-Secs issued.............
'RRBs should not be ignored'
.... As per the directions of RBI and NABARD and Syndicate Bank, the bank plans to provide banking facilities to habitations having a population of less than 1,000 using appropriate technologies under Ultra small Branch Concept along with 50 additional regular branches in different areas said Reddy........
NPAs of Urban Coop Banks more than double in Gujarat
....."We expect this to be a step in right direction for the UCBs in Gujarat. Management of NPAs is a major concern for banks and such facility would provide ample room to select investor, thereby yielding better value for the asset. This is a new concept and banks should adopt it," said Jyotindra Mehta, chairman, GUCBF. According to RBI guidelines, a credit account will be classified as NPA if it is out of order for more than 90 days. After the introduction of grading methodology, UCBs have been asked to keep their net NPAs below 10 per cent. Nationally, the gross NPAs of UCBs stood at 10.1 per cent in 2009-10, while it fell in 2010-11 to 8.5 per cent. The loan amounts have increased over the years and the profitability of UCBs too have improved. This resulted in increased provisioning for bad loans over the years.
First posting in rural area may become mandatory at public sector banks
First posting at rural branches or offices after recruitment may become mandatory at public sector banks (PSBs). Banks might rework the compensation structure to make rural postings attractive. At present, the pay package has a definite tilt in favour of city and metropolitan areas. These emerged from a brainstorming top managers – chairman and managing directors and executive directors – had over the weekend to position PSBs for today’s highly competitive business environment. They also dwelt on expectation profile, talent building, succession planning, compensation packages, and information technology infrastructure. The two-day conclave was organised by Bank of India. With a thrust on financial inclusion and huge funding for villages under various programme, business opportunities will grow manifold in the rural sector. The ground work for it has to be done now, said the CMD of Mumbai-based bank..................
Mumbai's Zoroastrian Cooperative Bank acquires Surat-based City Coop Bank
Mumbai-based urban cooperative bank, Zoroastrian Co-operative Bank Limited (ZCBL) has acquired Surat-based City Co-operative Bank Limited making the former a multi-state scheduled urban cooperative bank. The ZCBL has been authorised by the statutory authorities to acquire the Surat-based City Co-operative Bank. The acquisition brings six branches of City Cooperative Bank under ZCBL, which currently has 12 branches located in parts of Mumbai and Pune. Currently, ZCBL has about 45,000 to 50,000 accounts with a total business of Rs 1,100 crore as on March 31, 2012 and its net worth is nearing Rs 100 crore. The bank maintains the Capital Adequacy Ratio (CAR) in excess of 14 per cent, as against the requirement of 9 per cent set by the Reserve Bank of India (RBI)...........
RBI cancels Madhavpura Mercantile's banking licence
.....“RBI has cancelled the licence of MMCB on Monday evening as we were not able to make recovery.” Total recovery pending is over Rs 1,100 crore and NPAs have touched 99.9 per cent of total deposits," .....
Read......
Read......
PNB reworks deal with MetLife to fit regulatory bill
....According to the deal, all PNB branches (more than 5,600) will sell MetLife’s insurance products. The bank will earn a fee for selling those products. The new proposal has been submitted to the regulator for approval. Interestingly, the former proposal was approved by the Reserve Bank of India but hit a roadblock with the Insurance Regulatory and Development Authority (Irda) over the valuation......
Bank Business Correspondents: Miles before the idea works
.....Other major problems encountered are non-operation of accounts; making manual payments using the department's E pay-order to banks, multiple accounts to the same person, not carrying out biometrics based de-duplication, Non establishment of customer complaint centers and non supply of transaction data for monitoring by the department.” All of these and similar issues need the attention of the Reserve Bank of India (RBI) and other regulators, especially when the bid is extremely low cost!..................
Read.............
Read.............
Bank branches go high-tech
....The revolution in mobile technology will do a lot for banks. It enables customers to carry out transactions via cellphones or tablets. The Reserve Bank of India is revising a few norms around mobile banking, and this is expected to give a fillip to the category..............
Sri Lanka to have India trade show in August
......In South Asia, economic nationalism and trade barriers were partly triggered by global currency weakness of the post World War II failed Bretton Woods unstable peg system, though global trade barriers also rose during the Great Depression. Until the middle of the last century exchange rates between the two countries were fixed one-for-one through a currency board in Sri Lanka. Even after the creation of the Reserve Bank of India in the 1930s the Indian rupee remained strong and stable as the RBI was restrained by a gold standard. But after independence from British rule, the central banks of the two countries raced with each other to weaken their currencies by printing money to finance budget deficits, a battle which was eventually won by Sri Lanka............
Subscribe to:
Posts (Atom)