The pensiveness of a lonely economist - T. C. A Srinivasa-Raghavan

....Economists are not generally given to speaking of each other in deeply reverential tones and Indian economists even less so than others, at least about fellow Indians. But as with all such rules of mean behaviour, there is one exception: I.G. Patel.........

Read - The Hindu

The finance ministry’s writ

In the recent times there has been much talk about the Union finance ministry trying to micromanage the affairs of the public sector banks. D. Subbarao, and Y. V. Reddy, the current and past governors of the Reserve Bank of India (RBI), have argued for the majority owner—the Government of India (GOI)—to exercise its control over the banks through the board process rather than through notifications. In this context it is useful to understand the constitution of the public sector bank boards to look at this dynamic......

Read - Mint

RBI’s monetary policy strategy meeting on Tuesday

.....“We will urge the RBI to revisit this issue (interest rates) to ensure that capital is available to the industry .. given the slowdown, there is every justification to ensure that Indian industry remains competitive and manufacturing grows,”....

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Udupi: Quarterly Meeting of District Level Review Committee for Banking Held

.....A Vijaya Kumar, lead district officer, RBI, Bangalore informed the latest instructions/guidelines issued by RBI on various issues related to banking activities. While reviewing the performance of banks in the district, he emphasized the need to achieve various mandatory targets by all the banks........

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RBI to issue Rs 5, 10 coins to commemorate 60 years of Parliament

NEW DELHI: To commemorate the ocassion of 60 years of Indian Parliament, the Reserve Bank will introduce Rs 5 and 10 denomination coins having the image of the Parliament House..........

Read - ET

What about polymer rupee notes?

.....What is important, however, is the tragic admission by Reserve Bank of India (RBI) that there is a 95% increase in counterfeit notes in the country over the past five years, most of which, regrettably, have come via Pakistan, and smuggled through the land borders of Nepal, Bangladesh and of course Pakistan. The smuggled counterfeit currency notes are of higher denominations, mostly in Rs500 and Rs1,000.
If polymer bank notes are introduced in India, this will eliminate the backlog of unusable worn out bank notes and combat counterfeiting menace.....

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Common interview likely for posts in state-run banks

.....“We are talking with banks for a centralized system for interviews. Candidates will have to attend one common interview, which will be conducted by bank officers with the help of outside experts,” .....

Read - Mint

Get together of RBI Retirees at Bangalore

Some of our enterprising retiree friends have been arranging half yearly Get-together of RBI retirees from Bangalore since 2010. Fourth such function was arranged on 7th July, 2012 in the Community centre of Jayanagar Colony, Bangalore. In the latest meet, which was the fourth, the organizers decided to add another novel idea of "FELICITATION" to the participants who had completed 80 years. Seven such participants were FELICITATED with a shawl and idols of Lord Krishna and Ganesha. The meet is generally a GET TOGETHER with coffee, tea, biscuits followed by a lunch on cost sharing basis. In between, the participants share their experiences and if time permits also play a game of "Housie". The number of participants which was about 90-95 in the beginning has increased to about 130 in the latest meet. The group of organizers comprises six members, including a lady member, and the captain of the team is Sh. S.Venkat Subba Rao Retired General Manager from Bangalore. 

- Madan Gauria / D.Kasturi

Those who are interested can have a glimpse of the photos taken during the function by clicking at " View Album" below:

Click to view album........

Uttar Pradesh government planning to inject life into ailing cooperative banks

.....the state government would inject Rs 373 crore to brush up the functioning and meet the overhead cost of these banks as per the estimates made by the joint task force comprising officials from the RBI, NABARD and the registrar cooperative. As against the promised central assistance, Rs 629 crore had already been received and efforts made for the release of the remaining Rs 916 crore.......

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ICICI Bank organises customer outreach programme in Leh

...."ICICI Bank is pleased to partner with this initiative of Reserve Bank of India. Outreach programmes are an excellent way to help customers understand their rights. ICICI Bank strongly believes that empowered customers are truly responsible.".......

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Urban financial inclusion on Allahabad Bank radar

.....The Bank has been allotted 13 lead districts in UP spanning 1,200 villages. Under the Reserve Bank of India (RBI) mandate, the lead banker has the responsibility of coordinating with the government agencies and other banks for financial services and inclusion in that district....

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Curbs on gold

This is with reference to the observations made by the RBI Deputy Governor, Dr K.C. Chakrabarthy, in “Curb offering gold to God, or as dowry” (Business Line, July 22) . The first will hurt the sentiments of the devotees, as the offerings to God should be the best, according to Hindu mythology. Second, dowry is a social evil. The RBI can speak with data in hand. But the common man is aware that large-scale purchases are made by the wealthy to divert unaccounted money. The Government came out with good tax strictures on gold sale but had to sulk under pressure from bullion merchants, who initially downed their shutters, only to open it later for fear of business loss during Akshaya Tritiya. . Subsequently, the Government withdrew all stringent levies. The best way to curb gold purchase is to bring all purchases, irrespective of the value, under the tax net. The RBI has rightly observed that there is no intrinsic value for gold. It can perhaps resort to market intervention by purchasing gold, which can have a stabilising effect.

- S. Veeraraghavan Madurai (HBL)

Longer debt recast line likely

Within the next two years, the number of cases referred for debt restructuring might go up substantially, with the Reserve Bank of India proposing a tougher regulatory regime in this regard by mid-2014, experts said. A senior executive with the Indian Banks’ Association said it was possible that banks would see a rush of proposals before the end of the presently more lenient regime. That would also increase the provisioning burden. He said IBA was yet to finalise views on the proposed regime.......

Red - BS 

RBI’s report on restructured loans shirks the issues

.......Most of the other recommendations also fail to address the seriousness of the issue at stake. For example, the Mahapatra Group makes recommendations about conversion of debt into preference or equity shares, cautioning that banks should only exceptionally convert their debt into preference shares. Preference shares are a non-voting as well as subordinated instrument. Conversion into, as an option, needs to take a futuristic look at the turnaround of the entity, and may be an excellent kicker. However, these are strategies which need to be exercised with great degree of caution. Making any list of rules for the action on the part of banks is like missing the intricacy of the point altogether.  In short, it may be likely that the RBI may accept the recommendations of the Mahapatra Group and banks may happily use restructuring as the device to keep their NPA levels cosmetically low.

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Rural market is $1.8-trillion opportunity: HUL's Manwani

....Manawani also emphasised on sustainable sourcing and said the company is working in Karnataka, Punjab and Maharashtra with small tomato farmers to help them adopt sustainable agricultural practices. "In 2011, 60 per cent of tomatoes used in Kissan Ketchup in the country were from sustainable sources," he said. He further said the company's wide distribution reach can help the Reserve Bank in its financial inclusion plan. "Along with the government, banks and corporates can play a synergistic role in realising this plan. Companies like HUL have a wider distribution network than any government agency as our products reach almost every village in the country. And leveraging this high quality last-mile can help bring financial inclusion to every Indian," he said......

Read - ET

Priority lending norms will have little impact: Barclays

.....It also noted that two potentially adverse recommendations made by the MV Nair committee, on which the guidelines are based, like capping limit on securitisation and having a target on lending to small and marginal farmers, have not been adopted in the final guidelines.

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Another headache for India: Weather-driven inflation!

Faced with slowing economic growth and a dangerously high balance of payments deficit, about the last thing India needs is food prices pushing inflation higher, but that is just what the weather gods are brewing...................

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Foreign banks ask for more branches

.....“We are all for economic development. But we will urge RBI to broaden the definition of the priority sector. Otherwise, we will have to serve segments where we have no expertise, said a senior banker with another large foreign bank. “It is like throwing away money blindly and hoping it will come back.”.......

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RBI issues norms for a new class in NBFCs

.....Here is another step to tighten regulations for non-banking finance companies. The Reserve Bank of India (RBI) on Monday issued separate set of guidelines for a newly introduced category christened as Non-Banking Financial Company-Factors. Under this new class, a company has to seek registration from the regulator with a minimum net owned fund (capital + reserve) of Rs 5 crore......

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RBI introduces new category of NBFCs

......However, the RBI said that these NBFCs should raise the asset/income percentage as required or unwind the factoring business within two years from the date of this notification. They would be granted CoR (Certificate of Registration) as NBFC-Factors only after they reached the required asset or income percentage, the RBI added.

Read - The Hindu

Foreign banks wary about new priority sector norms

The RBI’s priorty sector rules that require foreign banks in India to lend 40% of their loans to priority sector has shaken the big banks Standard Chartered, HSBC and Citi. What hurts is not the increase in the percentage of loans to priority sector, but that henceforth export loans won’t qualify as priority loans......

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Non-banking financial companies shut down branch offices in Ramgarh

RAMGARH: A number of non-banking financial companies (NBFCs) have started closing their branch offices in Ramgarh after receiving notices from district administration to produce permission from the Reserve Bank of India and the Union finance ministry as proof of having the right to collect deposits from investors........

Read - TOI

Textile companies seek Rs 12,000 crore debt recast

....RBI has asked banks to look into textile debt restructuring on a case-to-case basis. The debt restructuring process will kick off from the first week of August. The textile industry is hopeful that a two-year moratorium on the repayment of principal amount against term loan will provide enough liquidity and help them meet export orders at a time when the US market is showing slow signs of recovery.....

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INFLATIONARY EXPECTATIONS DECLINE

.....Higher interest rates with a lag affect demand growth negatively, which, in its turn, is expected to impact inflation. However, this linkage is spread out over several quarters and happens to be extremely tentative. This made the current Economic Survey to admit that the linkage between monetary policy instruments and inflation is apparently “slender”. Anyone who has studied the time lag procedure in transmitting the impact of interest rate hike on inflation in India will find it difficult to disagree.........

Read - Mint

Patchy monsoon may push up inflation to 8%

....While the easing of overall inflation — based on the wholesale price index — has fuelled expectations that the Reserve Bank of India (RBI) may ease rates to support growth, economists now say the prospect of an interest rate cut in the July 31 monetary policy review appears to be dim.....

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India Inc waiting for 'good signals' on policy front: Assocham

NEW DELHI: Pointing out a decline in overall business confidence, industry body Assocham today said corporates which are braving negative perception may not be able to hold on bottomelines unless "good signals" emerge on the policy front.............

Read - ET