K C Chakrabarty may get 2-yr extension as RBI dy governor

The government is likely to extend K.C. Chakrabarty’s tenure as Deputy  Governor of the Reserve Bank of India (RBI) by two years. Chakrabarty, appointed Deputy Governor in June 2009, was given a three-year term that ends on June 14. The other three deputy governors are Subir Gokarn, Anand Sinha and H R Khan. A Deputy Governor in the central bank can be appointed for five years and the retirement age is 62 — the age limit is 60 for other RBI officials. A candidate has to be younger than 60 to be eligible. An exception to this rule was made during the re-appointment of Shyamala Gopinath in 2009..............

Read.........

RBI signs MoU with Central Bank of Bahrain

Mumbai: The Reserve Bank has signed a Memorandum of Understanding (MoU) with the Central Bank of Bahrain (CBB) to promote greater co-operation and sharing of supervisory information between the two regulators. The MoU was signed by RBI Executive Director P Vijaya Bhaskar and Khalid Hammad A Rahman, Executive Director of CBB, on May 29, the Reserve Bank said in a statement Thursday...............

Read.......... 

RBI: Accounting and accountability

.......Part of the explanation for the failure of RBI may have to do with its misguided monetarist economic mode. That there are plenty of such arcane models floating around can be illustrated with reference to the current debate on the rapid depreciation of the rupee, and what to do about it. Some argue that if RBI wants to prevent its currency from depreciating, and/or depreciating so rapidly, then it should increase interest rates. This analysis was not even appropriate in a fixed exchange rate world, and that world disappeared fully 40 years ago in 1971. For decades now, capital flows, and exchange rates, respond to prospects for economic growth and not to changes in interest rates. That some analysts still peddle this snake oil thesis is surprising..........

Read.........

'India can get up to $90 bn in 2 years'

....During the roadshows, the finance ministry would highlight the changes that had been brought in the QFI regime, the liberalisation of the external commercial borrowings (ECB) norms and measures taken to deepen India’s bond market. Officials from the Ministry of External Affairs, Securities and Exchange Board of India, Reserve Bank of India (RBI), Bombay Stock Exchange and National Stock Exchange would also be participating in the campaign named - India as an incredible investment destination...................

Read..........

E-mail lottery fraud: Accused denied bail

...............He had received an e-mail on September 29, 2011 which said he had won a lottery of one million pounds. He also received phone calls from Patel asking him to deposit money in different bank accounts in the name of "fee, anti-terrorist and anti-drug abuse clearance from UNO, transfer charges to RBI and revenue to the government of United Kingdom"...................

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

Now, public sector banks on ‘USB' drive

‘Ultra-Small Branches' will help improve financial inclusion, says RBI

.........Recently, an RBI circular noted the need for having an intermediate brick and mortar structure (ultra-small branch) between the present base branch and BC locations. The circular suggested that these USBs could be either newly set up or by conversion of the BC outlets. Such USBs should have minimum infrastructure, such as a core banking solution terminal linked to a pass book printer and a safe for cash retention for operating large customer transactions....

Read.........

Mumbai body seeks PI Patil's suspension

..The Maharashtra police team returning to Mumbai after escorting RBI cash containers was intercepted by the Pernem police on March 15 at Patradevi and 10 officials of Maharashtra police, which included PI Shivaji Raut, were detained. According to the notice served by the advocates of the organization, friendship between PI Patil and the arrested PI let the offenders go scot free.............

Read..........

RBI’s Chakrabarty explores financial education in emerging markets

Kamalesh Chandra Chakrabarty, a Deputy Governor of the Reserve Bank of India, delivered a speech on June 5 that explored the benefits of extending financial education in emerging markets. Speaking at a literacy forum in Mumbai, Chakrabarty said that financial education "essentially involves two elements, one of access and the other of literacy". He explained that financial education should commence at school level, so students could act as "ambassadors" to spread financial knowledge to the wider community.................

Read.........

Bank boards asked to take stock of unclaimed deposits

........In a circular to all banks, RBI has said that lenders should put in place a board approved policy on classification of unclaimed deposits; grievance redressal mechanism for quick resolution of complaints, record keeping and periodic review of such accounts. Four years back in August 2008 RBI had asked banks find the whereabouts of the customers and their legal heirs. At that time RBI had said that banks should review accounts every years wherever there are no transactions. The circular has defined an inactive/inoperative account as one where there has not been any transaction in the account for over a period of two years. Banks have also been directed to reactivate inoperative account without any charge. However, despite these instructions the number of inoperative accounts had only grown. This has compelled the central bank to come out with fresh directives on these funds.

Read........

RBI asks banks to set up financial literacy centres

.According to the RBI study, since the counselling centres were set up by banks themselves, there was a fear among borrowers that they might turn into debt collection units. Under the new scheme, FLCCs would continue to function with renewed focus on financial literacy. However, most of the responsibility has now been passed on to banks. This will lead to opening of 630-plus FLCs in all the districts throughout the country. Further, financial literacy activities will also be undertaken by all the rural branches of commercial banks and regional rural banks. RBI has said that it will prepare financial literacy material on its own and distribute it to banks.

Read..........

Will a change of government give a new direction to economy?

The whole economy is in shambles. The RBI and the central government will have to put their heads together by taking the right steps to boost growth

The present foreign exchange imbroglio and economic crisis faced by our country brings back to memory the near disaster faced in 1991, when the country had to airlift 67 tonnes of gold to pledge with Bank of England and Union Bank of Switzerland to raise $605 million of foreign exchange loan to avert a default in international payments. In January 1991, the foreign exchange reserves of our country had reached a precarious position ..............

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

Case for a 75 basis points’ cut

With GDP growth sharply decelerating to 5.3% in the last quarter of 2011-12, RBI Governor D Subbbarao’s job becomes quite easy during the mid-June quarterly review of monetary policy. The bias of the central bank will more pronouncedly shift in favour of propping growth, especially with the latest data set showing a negative growth in manufacturing during January-March 2012................

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

The stickiness of interest rates

....While SBI may be comfortable with its liquidity, it’s quite another story for the sector. After two rounds of cash reserve ratio cuts, banks are still borrowing Rs.70,000 crore to Rs.1 trillion under the Reserve Bank of India’s (RBI’s) liquidity adjustment facility. Not only that, banks have had to turn to alternative sources of financing such as certificates of deposit (CDs). Is it any wonder then that three-month, six-month and even one-year CD rates remain near their January highs?........

Read......

FinMin seeks rate cut by RBI to spur ecomomic growth

Following its commerce counterpart, the finance ministry, too, has pitched for a cut in policy rates by the Reserve Bank of India (RBI) in its policy review scheduled for June 18. This, the ministry said, would spur economic growth, which slipped to a nine-year low of 6.5 per cent in 2011-12. On what the government felt on the interest rate scenario, Economic Affairs Secretary R Gopalan said, “We see a possibility of growth picking up if the interest rates are reasonable.” He said RBI would take into account the inflationary situation as well as external factors, while deciding on its interest rate stance in the policy review.............

Read......

De - Jargoned | Monetary policy and its implications

Hopes in the financial markets are getting built around the expected rate cut in the mid-quarter review of the monetary policy on 18 June. But why are markets watching its review so closely?

Read..........

JP Morgan Economist: RBI Should Relook Currency Strategy

India's central bank needs to have another look at the way in which it intervenes in the currency markets because its recent dollar sales haven't been able to stop the rupee's slide, a senior economist said Wednesday. "Intervention is a legitimate instrument, but the Reserve Bank of India didn't do it the right way," said Jahangir Aziz, J.P. Morgan senior Asia economist. "The RBI could have intervened in a more strategic manner when the market was willing to accept it as a signal that the RBI is coming out and defending the currency."...................

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

Cabinet approves Rs632 crore capital infusion in regional rural banks

....Following recommendations of Reserve Bank of India (RBI) deputy governor Dr KC Chakrabarty, the government had initiated recapitalisation process in 2009-10 for 40 financially weak RRBs, which mainly provide credit to rural and agriculture sectors......

Read..........