- 25bps cut both in repo rate and CRR
- 25 bps cut in repo rate , no CRR cut
- No repo rate cut, 50bps cut in CRR
- 25bps cut in repo rate, 50bps cut in CRR
- No change in rates or CRR
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.
Saturday, June 16, 2012
RBI’s rate cut dilemma: Five possible outcomes on 18 June
‘RBI has to be sensitive to poor'
....Reserve Bank of India Governor, Duvvuri Subba Rao on Tuesday said that inflation could not be controlled without sacrificing growth and stressed that the Central Bank must be sensitive to the silent voice of millions of poor while deciding on interest rates. Delivering a memorial lecture on “Reserve Bank of India—making a difference in everyday life” organised to mark the fifth death anniversary of former IAS officer, K. Obayya, he referred to the demand of corporates to reduce high interest rates and to the criticism that RBI's tightening did not reduce inflation but ended up stifling growth......
Non-Andhra Pradesh microfinance institutions exhibiting signs of recovery: Microfinance Insitutions Network
Two years after the Andhra Pradesh microfinance crisis brought the microfinance sector to its knees, microfinance institutions (MFIs), especially those based outside Andhra Pradesh are showing signs of recovery, a report put out by Microfinance Insitutions Network (MFIN), a self-regulatory body of 46 RBI registered NBFC-MFIs, has claimed...................
Business correspondent model at near-zero cost may fail with deep negative impact
....Hence, any servicing by the BC and/or their agents mandatorily requires a good financial literacy component as well. This aspect of financial literacy is also a necessity now given what happened in Indian micro-finance over the last few years and is perhaps in keeping with RBI’s drive for greater financial literacy and transparency at the grass-roots......
Monetary policy
........The repeated concerns expressed by the RBI Governor and analysts about inadequacy of supportive fiscal measures from the Government to make monetary policy fructify have all been ignored under the plea of ‘coalition compulsions'. But when it comes to issue of ‘diktat' to Mint Road, even on matters which come well within the mandated powers of the RBI, North Block is very liberal.
My View on "RBI, the favourite whipping boy : S S Tarapore"
There is no comparison between Pranab Mukerji of 1982 with the Pranab Mukerji of 2102 as he is now out and out a politician!! Finance Minister has not only blamed the Governor, according to SST, for the present economic situation but has been allowing his officials to undermine the authority of the Governor by expressing views on interest rates. As I had earlier commented, it is to the credit of the Governor that he is entirely guided by his own reasoning and analysis of the situation and has not bothered about the views of the officials of the Government. SST has cleverly avoided criticising the Deputy Governor( Dr.KCB) for commenting on matters which legitimatley pertain to the Deputy Governor( Dr. Subir Gokarn).SST could be very critical if needed and one wonders why he has chosen to be diplomatic in his observations on the remarks of the Deputy Governors. While he was in service, the other Deputy Governors did not go public on matters which are his responsibility and if they had done it, would he not have taken his protest to the Governor?- A.Chandramouliswaran
Today's economic crisis is not a repeat of 1991, says RBI chief
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Should Subbarao now build warehouses?
..Every time the government goes wrong with its policy measures, it looks for quick fix solutions. More often than not the RBI is expected to use its monetary tools to set things right. Inflation, oil prices, rupee depreciation. The RBI is supposed to have solutions for each of these. Despite Dr Subbarao hardly mincing words with regard to the government's ineptness in handling inflation, his views have found no takers. Other governors with the Reserve Bank of India (RBI) have also cited marginal room for interest rate cuts. Quite understandably since the government's wasteful spending has gone to gargantuan proportions. But once again, all eyes are fixed on the upcoming policy review that could ease liquidity further. That would ease growth pressures, albeit temporarily. But we will not be surprised if this time a prudent Dr Subbarao should propose building the warehouses too! After all, our government does not seem to realize that the best solution to tackle inflation is ensuring better storage of food grains. On one hand the government is allowing surplus produce to rot in the open during monsoons. There is also a proposal to offer wheat at dirt cheap prices to industries. On the other hand, high MSPs (Minimum Support Prices) are being doled out to appease farmers. All of this if tackled with better warehouses and logistics could solve the inflation problem for good. And that would leave the RBI with more time to look into crucial matters, rather than quarter on quarter inflation control. Well, if the government remains tongue tied and paralyzed, it would eventually be pertinent for the more hands-on regulators to take some radical steps.......
Stock market bets on Greece polls and RBI rate cut
Key benchmark indices, on Friday, surged to attain their highest closing level in over 6 weeks as traders seem to have strong hope that central banks worldwide, including RBI, are likely to take concerted steps to contain damages in case Greece exits Euro zone................
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Bond traders gear up for key RBI decision
....Federal bond prices inched lower on Friday as investors turned more cautious ahead of a key Reserve Bank of India (RBI) policy review, though expectations are still for at least a 25 basis point cut in interest rates. The RBI reviews its policy stance on Monday with markets also expecting a potential cut in the cash reserve ratio, or the money lenders must park with the central bank. However, some of the expectations for more aggressive rate cuts were left in doubt after the central bank governor said inflation cannot be controlled without sacrificing growth in the near-term.......
With inflation untamed, will RBI act freely?
...........Not only the economist and stock market veteran are pitching for the rate cut but industry body like Assocham has also sought immediate cut in the short term lending rate and CRR by at least 100 basis points. Department of Financial Services Secretary D K Mittal, too batted for a CRR cut. The country's largest bank, SBI, too requested RBI for a one percent CRR cut and favours CRR cut over repo rate cut.
Repo rate cut by RBI would be ineffective: HSBC
.....NEW DELHI: A cut in India's repo rate would be "ineffective" given the liquidity deficit in the country, and would be "the wrong medicine" to boost growth, HSBC said in a note on Friday. "We think deeper structural reforms are needed instead, and soon," HSBC wrote......
Leg room for rate cut: Kaushik Basu
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No shortcuts for RBI
....There is little RBI can do about those. Debt flows respond to differences in the domestic and foreign interest rates. Cutting rates at this juncture would make India a less attractive destination for debt flows. From RBI’s point of view, if it wishes to pursue the stability of the rupee as an objective of monetary policy, cutting interest rates could increase the pressure on the rupee to depreciate.....
Slowdown vs inflation: RBI will be in 50:50 mindset on rate cut
........The odds are even of a rate cut beyond 25 basis points, in this scenario. A lot, of course, depends the political pressure on the RBI to cut rates.
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RBI won't ease significantly for 2 qtrs: Franklin Templeton
Markets are closely watching the Reserve Bank of India’s move in the upcoming monetary policy on June18. As per consensus estimates, the central bank would announce a 25bps repo rate cut at least.
However, given the inflationary pressure and widening fiscal deficit R Sukumar of Franklin Templeton Investments believes that the market should not expect a very sharp sustained fall in interest rates from the current level in the next two quarters..............
There is legroom for rate cut
New Delhi, Jun 15: The Finance Ministry sees scope for a policy rate cut by the Reserve Bank of India at the monetary policy review meeting on Monday. With core inflation holding where it was, there is a legroom indeed for a rate cut, Dr Kaushik Basu, Chief Economic Advisor in the Finance Ministry, told reporters here. He highlighted that although inflation had gone up quite a bit, core inflation had in fact gone down only a tiny bit. “Usually monetary policy is directed towards core inflation,” Dr Basu pointed out. He said that RBI had a very tough act to undertake three days from now. This is because inflation had not gone down quite as much, while growth has gone down a lot.
HBL
May drop lending rates further if RBI cuts 50bps: SBI
Pratip Chaudhuri, Chairman, State Bank of India said that the latest round of cuts are different from the cuts undertaken in May. If the RBI announces a 50 bps rate cut, then the bank is willing to drop lending rates first, informed Chaudhuri. He further added that lending rates are conditional on CRR cut and therefore, he is not committing a base rate cut at this point......
SBI cuts SME, agri loan rates by 50-350 bps
..........“The cost of deposits have not come down as deposit rates are still at higher levels. We would take a call on both the base rate and deposit rate after the monetary policy review (by RBI) on Monday.”.........
'Banks to see moderate growth in FY13'
....We maintain our view that FY13 will be another tough year for the banking sector. The macro environment is likely to remain difficult, particularly in contrast to the sharp recovery of FY10,” it said.
Overall credit and deposit growth will remain sluggish, with deposits at 16 per cent and credit at 17 per cent. It will be on account of low investment activity as well as tight interest rates, the report said, adding RBI will continue to fight inflation which is heading north........
Emerging Entrepreneurs
Bangalore, June 15: Polaris Financial Technology Ltd has announced that it has won the HP AllianceONE Partner of the Year Award in the Converged Infrastructure Solutions category. The company in a release said that this was in recognition for the Central Bank Core Banking Solution implemented at the Reserve Bank of India. Mr K. Srinivasan, Executive Vice-President, Polaris, said: “Intellect CBS for central banks is the first integrated money and securities solution that comes with depository and security settlement with DVP-3 (delivery versus payment) capability.’’
HBL
ICICI Bank has evolved from corporate to day-to-day bank: Chanda Kochhar
....."There have been two big changes on the corporate side of our business. In the past, we were mainly focused on large-ticket deals, whereas today we are in the day-to-day banking business and a lot of this is executed through branches," Kochhar said. "On the retail side, our focus was through the outside structure but now business is done through the branches. Over and above that deposit taking and regular servicing is conducted through branches. Basically, we have transitioned," Kochhar said in an interview published by global investment banking major Morgan Stanley......
NABARD offers more funds to Rajasthan
.......The NABARD chief found the godown facilities in Rajasthan weak and offered Rs.250-350 crore for construction of storage spaces. “We are willing to provide loans at a reduced rate of 9 per cent and an additional incentive of 2.5 per cent for timely repayment,” Dr. Bakshi said. He offered a separate line of credit to the Rajasthan State Cooperative Bank for financing the primary agriculture cooperative societies in Tonk district in the wake of RBI taking control of the bank. He advised the cooperative banks in the State to adopt core banking maximum by March 31, 2013.
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