...... "Monetary policy is the preserve of the central bank. The Reserve Bank enjoys autonomy. There are always consultations between the government and the Bank. But, we respect the autonomy.".......
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Monday, June 25, 2012
RBI has put the pressure back where it should be: Jim Walker, Asianomics
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Sliding rupee: Will New Delhi & RBI finally end the blame game?
.....Last one year's experience shows that a quid pro quo doesn't work: RBI's grim reminders about the fiscal deficit have had little impact on the government, which refused to raise diesel price or cut subsidies. The lesson from this is that the use of monetary policy - rather the non-use of it - cannot force a government to act. RBI may have successfully built an impression that it's an independent central bank, but one wonders to what extent such an exercise helped the India story.
All Eyes On The RBI Governor
.....What actually surprised me was his comment that the Reserve Bank of India (RBI) Governor would announce fresh steps to shore up confidence in the financial markets. I know for sure there is hardly anything RBI Governor D. Subbarao can do to protect the rupee from depreciating further but then nobody can rule out anything when a situation is as alarming as it has turned out for the Indian currency in the last two weeks. All eyes are now again on Subbarao to pull a rabbit out of the hat. To be fair to the bureaucrat-turned-central banker --- and a non-economist --- there is absolutely nothing left in his armoury to arrest the rupee slide against the US dollar in view of weak fundamentals back home and a strong dollar.......
Private banks geared for Basel III
With the introduction of Basel III norms, Indian banks’ minimum capital requirement, as a proportion of risk-weighted assets, is set to rise in the next six years. This could apply pressure on the return on equity of Indian banks, especially those in the public sector. Given that banks need to have core equity (shareholder funds) in excess of 8 per cent by 2018, the ability to leverage may also be limited going forward..............
What prompted RBI to stay put?
.....Many analysts were of the view that a reduction in rates was imperative in the face of a definite slowdown in investment and economic activity. However RBI has maintained status quo in its current monetary policy. Why has RBI maintained a status quo with respect to the rates?.......
CMIE says inflation to move up on rupee fall
......The continuing depreciation of the rupee is expected to fuel inflation and push the headline number to 7.3 percent for FY13, making a reduction in interest rates for borrowers unlikely in the near term, an economic think-tank has said. The Centre for Monitoring Indian Economy (CMIE) has upped its fiscal-end inflation target to 7.3 percent from the 6.7 percent and Reserve Bank's 6.5 percent, due to the slide in the rupee........
In a catch-22 situation
.....It may be arguable, but an interest rate cut would probably have had the psychologically important consequence of preserving, if not boosting sentiment such as what is seen in the stock markets. The counter argument is, for that to happen the rate reduction ought to have been of a higher magnitude, say at least 0.50 percentage points. Besides, it is extremely doubtful whether sentiment can be sustained over the long-term through rate cuts and other short-period monetary measures.
Investigate why RBI killed growth
| { | An independent enquiry commission needs to examine why Subbarao deliberately chose a mix of policies that were tailor-made to create a recession. |
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Print Sardar's image on currency notes, says Dinsha Patel
.....an MP from Kheda Dinesh Patel wrote a letter to the RBI governor and requested him to consider Sardar Patel, the Iron Man of India. Patel said that Sardar played a big role in the Indian freedom movement and later in the unification of princely states under one flag.........
RBI to remain closed on July 2
GUWAHATI, June 23:The office of Reserve Bank of India, Guwahati will remain closed for public transations on Monday, July 2, 2012 on account of annual closing of its accounts for the year 2011-2012, stated a release.
The Sentinel
Opening FD account
I have a savings bank account with a well-known nationalised bank. I wanted to open a fixed deposit. Since I did not have adequate balance in the SB account, I drew a cheque in favour of the bank from an account with another bank where I had sufficient balance. The normal procedure should have been to send the cheque for clearing and then issue the FD receipt. But the bank said that, under the RBI instructions, I should first transfer the amount to my SB account and then apply for opening an FD account. It may mean a third visit to collect the FD receipt. I do not know whether the procedure has been laid by the RBI. In this day and age, it is antiquated.
- A. Seshan (HBL)
White Label ATMs: Non-bank entities to operate in payment system
....One can realise that with the number of requirements under the scheme and with the networth requirements RBI has well ensured that not everyone except giant business houses would be able to undertake the business set-up to ensure integrity and public safety as there is surely an inherent risk by letting private entities enter to set up and operate WLAs. Further, no switch-over of scheme is permitted. As said, going ahead the RBI may decide to relax the norms........
Non-banking entities may open 80,000 ATMs in next 8 months
........In spite of the banks' pioneering efforts in this direction, much needs to be done, it said, adding, there is a need to expand the reach of ATMs in Tier III to VI cities. The RBI final guidelines had said non-bank entities proposing to set up WLAs have to apply to RBI for seeking authorisation under the Payment and Settlement Systems Act, 2007.......
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