TOI
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.
Monday, August 6, 2012
Reddy may be head of next finance panel
Mobile Banking Security Lab launched
Hyderabad, Aug 4: The Reserve Bank of India Governor, D. Subba Rao, on Friday inaugurated a mobile banking security lab set up by the Institute for Development and Research in Banking Technology. The institute, established by the RBI, supports the Indian banking industry through innovative technology initiatives and interventions.............
More updates, please
The Reserve Bank of India’s (RBI’s) website is one of the best among those of central banks in the world. It is up to date and makes it unnecessary to write to the Bank for data and information on most of the items of interest to the economic analyst. After the announcement of the quarterly policy review, the RBI holds two separate interactive sessions through conference calls: one with the researchers and another with the media. They are webcast and it is useful. It would, however, be of great help to the researchers if complete transcripts of the two sessions were also posted on the website. The identification of an RBI official who made a particular statement is also of interest. It becomes difficult to note down points in long hand while listening to the question and answer sessions. The transcripts in the archives will be useful to the future historians of the bank too.
- A Seshan, Mumbai (BS)
Covering up regulatory failure?
.......Why is financial literacy a buzzword today, like corporate governance was in 2001, after the previous global market crash? Why are enormous amounts of money and resources being spent in the name of spreading literacy? The reason is part herd mentality, and part naïve belief in knowledge and education as the panacea for financial problems.........
RBI to control cheque frauds
.....As part of preventive measures, the RBI has directed its passing authority to cross check the cheques having a value of Rs 5 lakh or more. The authority has to make a call to check issuing authority and has to seek his/her affirmation, said K R Das, RBI Regional Director for UP and Uttarakhand........
.....Contradicting the news appeared in some sections of the media regarding closure of Kanpur regional office of RBI, he said that there was no truth in the news. He said he had discussed the matter with the central office in Mumbai and there was no proposal for closure of Kanpur Regional Office........
ICIF discusses Interest-free Banking with RBI Deputy Governor
RBI's Subbarao: Indian Government May Have to Change Public Sector Banking Structure
........With 70% of banks in the country being state-owned, the RBI has often voiced its concern over the government's constraints in helping banks meet higher capital buffers. The Indian economy runs a yawning fiscal deficit, projected at 5.1% of gross domestic product in the year ending March 2013. Besides, there is competing demand for federal resources. "So, the alternatives available to the government are either to reduce their shareholding to below 50% and admit that they will change the public sector banking structure or restrict the expansion of the public sector banks," Mr. Subbarao said at an event in the eastern Indian city of Hyderabad..........
‘Banks must raise addl Rs 1.6 lakh cr to meet Basel III capital adequacy norms’
....Our estimate is that after accounting for (their) internal accruals and interest earnings, banks should raise an additional capital of between Rs 1,60,000 crore and Rs 1,75,000 crore,”.......
Of Economics, Policy & Development
.......The Epilogue by Dr. Reddy affirms that the value of this collection lies not only in providing a background of Patel’s thinking on various economic issues that confronted India during half a century of freedom but also evokes reflections on global economic contemporary theory and current challenges for policy makers. The book is compulsory reading for bankers, students of monetary policy, finance, trade and policies. It is a veritable economic history of India during the first fifty years after Independence.
Income Tax Department may do away with ITR-V
If you file returns online, you may not have to mail the Income Tax Returns Verification (ITR-V) form next year. The Income Tax (I-T) department is working on a proposal where individual taxpayers, who do not have a digital signature, need not have to sign the ITR-V to complete the process of e-filing returns......
Whose priority is it anyway?
....Later that year, the then finance minister Morarji Desai introduced it along with the establishment of a National Credit Council, which he chaired with the Governor of the Reserve Bank of India as its vice-chairman and declared that neglected sectors would be eligible for financing by banks on a “priority basis.” This has come to be known as “priority sector lending”. ....
Read............
Global slowdown and financial stability
....According to a World Gold Council study, only about 23% of total gold imports may be for " investment" and the rest for jewelry. The so- called investment is in a dead asset. At last the RBI admits " Diversion of household savings into gold has implications for the availability of funds for the financial sector and thereby for growth". It is high time the Government takes some drastic measures to moderate gold imports.........
Not too many Bills this time
.....At the same time, considering the Reserve Bank of India’s (RBI) close monitoring of changes in bank ownership, the process is likely to be calibrated and controlled. The RBI’s nod is a must for any share acquisition of five per cent and above in banks........
Gold loan firms see drop in recoveries
Reserve Bank of India (RBI)’s regulations have slowed down not only the growth of gold loan companies; but also, the recoveries which came down in the June quarter, against the March quarter.........
Can we get out of low growth-high inflation trap?
......The RBI’s discomfort with the current inflationary situation is evident as even non-food manufacturing inflation, treated as a gauge of demand pressure on inflation, remains high at 4.9 per cent and there is a risk of demand pressures resurfacing quickly. To reverse the high inflation-low growth cycle, fiscal consolidation must begin, with a shift in the expenditure mix from consumption to investment...........
Rising NPAs banks’ biggest worry
.....Although the banks till now are required to invest 24% of their deposits in government bonds (the new norm, 23%, takes effect from 11 August), many banks have invested around 30% of their deposits in bonds. This means they could have liquidated their excess SLR holdings even before the RBI announcement and used the money to give loans. They have not done so and probably will not do even after the SLR cut simply because government paper is a risk-free asset while loans can turn bad. Banks need to set aside money for bad loans and that affect their profitability. In fact, provisions for bad loans could more than offset higher income from loans.......
Policy paralysis, hardly a cliché now
......At a launch function of a book written by I. G. Patel, one of RBI’s foremost economic administrators as well as being one of his distinguished predecessors, Governor Subbarao forcefully defended the RBI’s recent monetary stance, focussed as it has been on inflation control. Dr. Patel Patel had said in one of his articles: “The supreme test of monetary policy lies in its ability to control the supply of money in such a way that growth is checked without retarding growth”. That, as Dr. Subbarao pointed out, was the quintessential growth versus inflation debate that was being played out even today. Knowledgeable commentators have interpreted to mean that monetary policy must emphasise price stability......
Fee row: Engineering colleges moot loan scheme
.....The central government, in collaboration with the Reserve Bank of India (RBI), has taken permission from about 18 nationalised banks to provide loans to students without the wherewithal to fund their education. The banks are expected to set up counters at the counselling venue to offer loans to students looking to avail of the fee reimbursement scheme......
We have all been ‘Bangalored’
........The Governor of the Reserve Bank of India, D. Subbarao, says Indians are using far too much cash for settling their bills for his liking. Well, in recent times, I am guilty of contributing a bit more than I used to earlier.........
Rate cut could be good news this festive season
RBI's decision to slash the SLR rate by 100 basis points has pleasantly surprised many. Banks had witnessed tight liquidity position in last few months, but the current move by RBI would ease the pressure, to some extent........
RECALIBRATING THE INDIAN ECONOMY
.....This is the first formal sign that a recalibration of the economy is underway; in short, the government is signalling that the party is over for now. Maybe it is just a coincidence; but the move has come after a change of guard in North Block. Though the eternal optimists—especially those who have shamelessly sought to talk up the economy knowing fully well that the facts suggest otherwise—will baulk, this dose of pragmatism is welcome.......
More fiscal trouble ahead
It is not usual for a central bank to be doing nothing at a time when growth is slipping faster than expected. The first quarter review of the monetary policy by Reserve Bank of India (RBI) on 31 July, as widely expected, was virtually a non-event. And if recent fiscal trends are anything to go by, it is likely to remain this way in the foreseeable future. What will further complicate the making of monetary policy is that prices are now .......
Not good to be too risk averse
....In view of the proactive steps taken by RBI, it is necessary that we also should give benefits to some of the productive sectors. It will help the banks reduce the cost of funds. If your lending growth rate is 17 per cent, then your deposit growth rate need not be 25 per cent. Why should you unnecessarily add to your costs? When money is coming into the system, I can supplement it from RBI. Why not reduce the deposit rate? ......
Easing liquidity to nullify policy letdown
......The outlook for liquidity in August is benign. RBI pays dividend to the government in August and this will find its way to the system. The budgeted dividend expected from the RBI is around `23,000 crore. Credit is unlikely to pick up in August as the busy season starts in October. The central bank’s intervention in the currency forward markets, which is around $10 billion, comes up for maturity starting September 2012. It’s confident that liquidity will not be heavily affected as the forward contracts come up for maturity in a staggered manner. September is when liquidity is likely to face some stress on advance tax outflows and maturity of RBI swaps. However......
Without reform, GDP growth will fall below 6 pc: Planning Commission committee
.........a study of professional forecasters done by RBI revealed that growth would slip to 6.5 per cent for the fiscal against RBI's projection of 7.3 per cent. The RBI in its recent monetary policy has refrained from reducing key policy rates despite concerns of economic slowdown and demands from industry.
‘CMS did not even know driver’s name’
......“We are going to take action against CMS for not following RBI guidelines,” said commissioner of police BG Jyothi Prakash Mirji. After the RT Nagar incident, police asked CMS to follow RBI guidelines and warned that the company will be booked for negligence if it repeats the lapse.........
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