Can PM Revive the Economy?

.....Perhaps the finance minister believed that RBI would be better counsel. But Governor D. Subbarao seemed reluctant to give his best advice. Mukherjee and Subbarao have a frosty relationship, professionally and personally. Says a senior official, "In the last few months, there has been a complete breakdown in communication between RBI and finance ministry." Mukherjee and Subbarao have consistently disagreed on the correct level of interest rates for over a year. On June 16, just a week before he left office, Mukherjee signalled his desire to see a lower interest rate. "Keeping in view of all current factors, I am confident that the RBI will adjust monetary policy as we are adjusting the fiscal policy," he said at the National Banking and Insurance conference organised by industry body Assocham. Two days later, in his quarterly review of monetary policy, Subbarao, in a direct snub to the finance minister, left interest rates unchanged. He also rubbished Mukherjee's diagnosis and prescriptions for the fiscal deficit........

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

Comparing Balance Sheets: RBI with Select Central Banks

.....In this report, we compare RBI’s balance sheet with balance sheets of select central banks. The select central banks are Federal Reserve, European Central Bank and Swiss National Bank (SNB). These central banks are selected as they have cornered most of the attention with respect to central bank policies in the recent crisis. For Euroarea region, we analyse combined balance sheet of ECB and seventeen national central banks (NCBs) to provide a more comprehensive picture. This arrangement is called European System of Central Banks (ESCB). As above are developed economy central banks, we also cover Banco Central Do Brasil (BCB) in our analysis. This will help us compare RBI balance sheet with that of a developing economy central bank like BCB....... 

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

RBI questions, but provides no answers

.....But how is one to read the entire report? A financial stability report is to outline the risks involved in the system as well as economy, which it does adequately. But are we to be worried about it? Worried, probably no, but concerned, yes. This holds for the financial system because there are some very disturbing signs on the quality of assets as well as interconnectedness of banks. The ones pertaining to the economy are clearly well known and hence do not really come as a shock. But RBI does not offer any solution for either the economy or the financial system. Therefore, the report tends to read like a note of caution on all aspects, highlighting the risks and the worst-case scenarios for various aspects. Therefore, it reads more like the ‘weaknesses’ and ‘threats’ part of the SWOT analysis, leaving out the strengths and opportunities........

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

RBI rate cut may be further delayed: Citi

.....With the RBI time again indicating that its priority is inflation and the economy may have to sacrifice growth to bring down inflation, it is very unlikely that the central bank will cut its policy rate in the next policy review on 31 July. “With inflation likely to remain sticky and rating actions coupled with the RBI’s latest policy stressing on the need to address supply-side imbalances, this once again put the onus on the govt to create a positive investment environment and implement tax and subsidy reforms,” ....

Read......... 

Another feather in Sandip's hat.........................

Dear Mr. Ghose,

I am pleased to write to you about the Thought Leaders Award scheduled on 30^th June from 7:00pm onwards at Taj Lands End (Bandra-Mumbai). The award is to recognise the futurist who is recognized among their peer mentors for innovative ideas and has demonstrated the confidence to promote or share those ideas as actionable, distilled insights.

The awards are a part of the Global Change Management forum scheduled on 29^th and 30^th June and are hosted by the Thought Leaders International, Asian Confederation of Business, Stars of the Industry Group & World HRD Congress. The Global Change Management and Leadership forum along with the gala award ceremony will bring several Thought Leaders and Change Management Professionals under one roof. The Theme for the forum is “Mastering Change in a Hyperactive Business Environment”.

I am pleased to write to you that the Jury and Council of Board Members would like to confer you with the “Thought Leader Award” (Human Resource). This is in recognition of your remarkable progress in initiating changes in its process-remarkable enough for others in the same industry to follow your example. The Award will consist of a Trophy and a Citation. Request you to please honour us with your presence and receive the award in person. A line of confirmation will be highly appreciated.

Yours Sincerely,

David Paulson Dr. R L Bhatia

Chairman Founder

Awards & Academic Committee World CSR Day

 

Govt banks ask RBI to consider alternative on raising equity

State-run banks have urged the Reserve Bank of India (RBI) to consider perpetual non-cumulative preference shares (PNCPS) as part of their core Tier-I capital under Basel-III norms. This will ensure government banks do not have to rush for equity capital in the current uncertain macroeconomic environment....................

Read.........

The problem of the rupee

....the Reserve Bank of India withdrew the 25 paise coin from circulation, acknowledging the plummeting value of India’s currency. Since this demonetization of the 25 paise, the Rupee itself has had a rather close shave, buffeted as it has been by 9% inflation at home and a 23% decline in its value vis-à-vis the US Dollar. In the present scenario of universal economic gloom the Rupee suddenly appears unattractive, but it certainly has had its days of glory.............

Read.........

Breaking the bank

.......The low level of reserves at Indian banks may be encouraging them to fudge the numbers. Most banks reported allowances of less than the RBI’s minimum of 70 per cent of probable losses on total NPAs. At 69 per cent, Indian banks’ average level of reserves of bad loans is far below China’s 252 per cent and Indonesia’s 212 per cent. Setting aside greater provisions will hurt the banks’ bottom lines. But without a bigger buffer, the banks’ bad habits will only worsen.

Read..........

Traders lean towards RBI benchmark rate

.....The trading community calls this “deals on a fix” or “fixing deals”. Such deals use RBI’s reference rates. RBI calculates reference rates after taking into account rates from several banks at around 12 pm. The rate is declared within the next hour.......

Read..........

The Microfinance Route to Financial Inclusion

Microfinance has now become a movement that envisions an inclusive world in which low-income households have permanent access to a range of high quality and affordable financial services offered by a range of retail providers of financial services.......

Read........

Putting Financial Inclusion Campaign In Mission Mode

Financial Inclusion - A dream or reality?

Click here.......

Sidbi to mentor budding small entrepreneurs

......Meanwhile, Sidbi is seeking a Reserve Bank of India licence for the SME Rating Agency of India (SMERA), which has already secured the approval of the Securities and Exchange Board of India (Sebi).

“A RBI licence would facilitate bank financing for MSMEs using the SMERA platform. Sebi approval had only facilitated financing through issuance of bonds,” ........

Read..........

India gets first mortgage guarantee entity, an NHB joint venture

.....The company will have processes for approving lenders and housing loans for guarantee cover and help in maintaining the asset quality of lending institutions. “Adapting itself to the Indian context with a range of customised products for the lending industry and borrowing community, the company will operate under the regulatory jurisdiction of RBI,” .....

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

21st-century banking

.....The Reserve Bank of India has, according to reports, turned down the finance ministry’s suggestion that electronic funds transfers, or e-transactions in general, be made free for bank customers. The main reason cited for this is that no product or service should be offered free, as then it would not be commercially viable and so would not be scaled up. This needs to be contested...... 

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

Can we have banking without charges & penalties?

.....A few days back, the finance minister in his parting gift to the banking public had asked the banks to provide electronic transfer of funds from one bank to another free of all charges. But as the saying goes in Kannada, "Devaru Kottru Pujari Bida" meaning "God wants to give but the priest is coming in the way", a RBI official has firmly declined to accede to the wishes of the FM as he feels that free electronic fund transfer is not viable for the banks. We can, however, empathize with the RBI official, because the officials of RBI generally do not have the practical experience of retail banking and consequently he may not know the nitty-gritty of branch banking. Banking has undergone a metamorphosis and with the introduction of core banking solutions, technology plays a major role in the functioning of branches, thereby saving substantial cost of operations for the banks. And to consider that it is not economical to offer e-transfer facility free of charges is in variance with reality......

Read..........

Canara Bank launches technology-enabled Kisan credit card scheme

....The National Payment Corporation of India (NPCI) has developed the debit cards for Kisan credit card borrowers under its brand name of 'RuPay' cards. The credit facility of Kisan Credit Card enabled through debit cards will help farmers not only avail the loan from the bank but also would provide the convenience of drawing cash from ATMs of Canara Bank as well as others.....

Read........

HDFC Bank launches credit card for doctors

Private sector lender HDFC Bank rolled out credit cards for doctors to cater to medical fraternity's specific needs, as part of its plans to launch total one million credit cards in current fiscal to deepen its presence in credit cards space,............

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

SBI launches Business Debit Card for SME and business customers on foundation day

....The event was attended by its Chairman Shri Pratip Chaudhuri, Dr. Subir Gokarn , Dy .Governor , RBI, Bank's Managing Directors Shri Hemant Contractor and Shri A. Krishnakumar, other Central Board Directors, past Chairmen of the Bank, executives of Public / Private Sector Banks, eminent business persons and staff members along with their families......

........On the occasion, the Bank also launched for its SME and business customers, State Bank Business Debit card, having an array of attractive features including Cash Deposit facility, option of setting up Point of Sale terminals etc.......

Read.......