Yaga Venugopal Reddy set to head 14th Finance Commission; Parthasarathy Shome, R Gopalan too in panel

NEW DELHI: The former Governor of the Reserve Bank of India, Yaga Venugopal Reddy, is set to head the Finance Commission, the constitutional body which has the mandate to finalise the distribution of tax proceeds between the central government and states..................

 

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“The First Mile Walk into the Financial System”

Financial Inclusion has been a priority area for the Government in propelling inclusive growth. Plans, policies and programs are undertaken to drive the agenda of financial inclusion and integrate every common citizen of India in the fold of formal financial system of the Country. The Reserve Bank of India approach is driven by a bank led model supported with ICT and BCs. RBI has also taken steps in opening No-frills accounts, relaxing KYC norms, deregulation of pricing, promoting SHG bank linkage model and many more................

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Theme Address:
Dr K C Chakrabarty, Deputy Governor, Reserve Bank of India on August 7, 2012

Microfinance Regulation: The Emerging Landscape 
Mr Anand Sinha, Deputy Governor, RBI

HDFC Bank conducted a ‘Coin Mela’ in Lucknow

HDFC Bank, second largest private bank in the country, organized a ‘Coin Mela’ at Hazratganj Branch in Lucknow, today. The Coin mela was inaugurated by Dr. Rabi Mishra, Regional Director, Reserve Bank of India, Lucknow. The mela was organized to support RBI Clean note policy and program on financial awareness............

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What ails the New Pension Scheme?

..... It is unfortunate that without resolving the problems of acceptable returns, adequacy of the product as a substitute for a time-tested social security instrument (Defined Benefit Pension Scheme) and acceptance at the beneficiary level, the Centre is trying to impose the NPS on states (which have a stake in the coalition at the Centre) and autonomous institutions like RBI and PSUs, including public sector banks.........

- M.G.Warrier (former General Manager of the Reserve Bank of India)

 

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RBI, bank officials depose in Paazee forex scam

 ........On Thursday, Savithri Ramani, Assistant General Manager of RBI — Chennai (Foreign Exchange Division) appeared before the judge and in her deposition, the official said that any firm operating as non-banking finance company or involved in foreign exchange trading should register their names and obtain a licence..................

Read - The Hindu

Govt's overspending restraining effectiveness of monetary policy: RBI

....."Prudent anti-inflation policy includes containment of the deficit. It is insufficient to announce and maintain restrictive monetary policies unless accompanied by a coordinated reduction in the budget deficits," a RBI working paper titled, "Fiscal Stance, Credibility and Inflation Persistence in India", said Thursday..................

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RBI paper finds monetary policy undermined by unsustainable deficits

A working paper, published by the Reserve Bank of India (RBI) on July 26, studies the reasons behind high inflation in India despite tightening of monetary policy, suggesting the presence of a large government debt burden undermines the central bank's credibility...........

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Sensex gains private banks lead

....Europe, government action, and The Reserve Bank of India (RBI) Policy are important, and in that order for the market,” he added. “Everybody is waiting for animal spirits to come in, but nothing has happened so far on that front”........

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Public sector banks - Loans turning bad

.....Until 2001, these restructured accounts were considered NPAs, but to provide reprieve to banks and borrowers, the Reserve Bank of India (RBI) magnanimously took a decision to permit these loans to be treated as standard so long as they were rescheduled before becoming NPAs. Banks were allowed to do this if they considered the projects to be viable and believed that the cash flow problems faced by these borrowers were temporary. This amounted to the regulator’s nod to ‘ever-greening’ of loans and officially postpone the problem. More often than not, a sizeable chunk of these loans becomes non-performing—RBI officials themselves concede that 15% of restructured assets become bad debts........

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A clean-up act

......if the panel appointed by the RBI recommends to banks to make all restructured accounts into NPAs immediately, the entire banking industry will be in the doldrums. ............

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RBI may refrain from rate cuts

.....From a central bank’s perspective, it is unfortunate that slowing growth is being accompanied by stubborn inflation. However, this unpleasant outcome and the prevalent macro pressures should be traced to the high fiscal deficit being run by the government. Thus, we are following a sub-optimal policy mix, which cannot be corrected unless the government decisively cuts the fiscal deficit and puts the country back on the path of fiscal consolidation. Till that time, RBI may have no choice but to refrain from cutting rates. The central bank can, perhaps, point to the fact that it has already done its bit for the economy with the April rate cut and a proactive liquidity management strategy.........

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Time to hike rates?

......Though the usual lot of finance professionals have made a case for keeping rates unchanged, so far none have suggested RBI raise policy rates to deal with the likely surge in food prices. Perhaps they should take their advice to its logical conclusion!

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Global economy to determine RBI stance

....A tough stance by RBI on the rate front can be justified on a number of counts: suppressed inflation in view of the possible decontrol of diesel prices, the need to anchor real rates in view of the high inflation numbers so that depositors are not discouraged to save, depreciation of the rupee which amounts to monetary easing, and lack of resolve on part of the Government in reducing subsidies on fuel and fertiliser.........

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Why Subbarao may not be willing to surprise just yet

.....Having made it clear that the slowdown wasn’t linked to rates, the central bank will now have to be convinced by clear steps from New Delhi before the central bank is expected to do its bit again. It’s not a happy mix for Subbarao just now. The much-required diesel price hike is uncertain, big-ticket reform items are still stuck in political muscle-flexing and confusion and globally, there are chances that stimulus packages may drive up commodity prices again. Reason enough for the RBI to keep the finger on that pause button.........

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Inflation clouds loom large

Just a few days before the monetary policy announcement for the first quarter of 2012-2013, the Reserve Bank of India Governor D. Subbarao chose to talk about the centrality of inflation. The occasion was the launch of the collected writings of one of his illustrious predecessors, the late I.G. Patel. He quoted Patel, saying that the supreme test of monetary policy was its ability to check inflation without hurting growth. Notice the sequence. Implicit in this formulation (Patel’s, not Subbarao’s) is that inflation control is the objective, and not hurting growth is the constraint. You can’t switch the objective and the constraint. Of course, there is no such single objective mandate given to the RBI. But the RBI watchers would be deluding themselves if they don’t attach a higher weight to inflation control in the RBI’s current priorities............

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Pratip Chaudhuri, SBI chief makes case for a 50 bps cut in rates

Chairman of State Bank of India, Pratip Chaudhuri, said that the bank will pass on the benefits of lower rates only if the Reserve Bank of India cut cash reserve ratio (CRR) in the forthcoming policy. "There is a case for a 50 basis points in CRR," said Mr Chaudhuri. "If CRR is not cut there is no benefit for the banks and no benefits means nothing can be passed on to the borrowers,".....

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