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.
Wednesday, October 31, 2012
Defying govt, RBI leaves interest rates unchanged at 8%
The realpolitik of RBI - A Seshan
.....The decision of the Reserve Bank of India (RBI) to reduce the cash reserve ratio (CRR) is a recognition of realpolitik. One would have thought that its interpretation of the economic situation in the two documents related to the policy review made out a case for maintaining the status quo. The RBI is always under pressure before every review for liberalising its stance, something it could resist in the past, citing the continued trend of inflation over several months and the absence of economic reforms. It could take the correct stand that there should be a burden-sharing by the Government. Now, the Government claims to have done its duty with a host of reforms and has expected the central bank to keep its word and do its bit.......
RBI cautions on fake notes, SMS
......A.S. Rao, Regional Director, RBI, in his remarks at an RBI’s urban financial inclusion-cum-outreach programme recently said the apex bank was making efforts to inform the general public about financial literacy aspects through these efforts. Syndicate Bank, which organised the event, mopped up 2,000 new savings bank accounts as part of its efforts in financial inclusion, at the Natco Government High School here.......
Financial inclusion advisory committee meet in Dec
....“The collective expertise and experience of the members will be leveraged to explore viable and sustainable banking service delivery models focusing on accessible and affordable financial services, developing products and processes for rural as well as urban consumers presently outside the banking network, and suggesting the appropriate regulatory framework to ensure that financial inclusion and financial stability move in tandem. The first meeting of the committee will be held in December 2012,”.........
Obituary
We are grief-stricken to learn and inform the members that the former President and the Adviser of our Association, Sh.Sardara Singh, is no more. He had a heart attack at Kurukshetra while travelling to Chandigarh by Shatabdi Express. He had retired as General Manager from Chandigarh Office in October 2001.
- R.K.Pahuja, Secretary / N.N.Sharma, President
RESERVE BANK RETIRED
EMPLOYEES ASSOCIATION CHANDIGARH
RBI makes banking easy for customers
The Reserve Bank of India today announced a slew of measures, including a simplification of the stringent KYC (know-your-customer) norms, to make banking easier for the common man. "It is proposed to review the existing KYC norms for simplifying them within the provisions of the Prevention of Money Laundering Act and international standards," RBI said in its second quarter policy review. The central bank also said it will launch a pilot project, using the Aadhar data collected by Nandan Nilenkani-headed Unique Identification Authority (UIA), to authenticate banking transactions at ATMs and merchant terminals............
Read - Indian Express
Missing case of the dailyzine.........
Dear Mangesh
I have been regularly getting VITALINFO for more than a year now. However, I have suddenly stopped receiving the daily VITALINFO mail. The last one I got was Thursday, the 25th of October 2012. Please resume it.
Regards,
Pradeep Kumar Miglani
General Manager (Retd.)
New Delhi
RBI demands full reporting of fake currency notes
With greater awareness and use of note-sorting machines, banks are reporting more cases of fake notes in circulation. However, reporting of cases of counterfeit notes by banks is still below expectations. The Reserve Bank of India (RBI) has now said failure to report such cases might lead to penal action.........
RBI says legal backing must for issuing new bank licences
Reserve Bank Governor D Subbarao Tuesday virtually ruled out issuing new bank licences without it getting adequate powers to do so through legislation. Recalling his conversation with Finance Minister P Chidmabaram the latter's visit to the financial capital early this month, Subbarao said Chidambaram had asked RBI "whether it (new licences) can be done without amending the Banking Regulation Act". "We believed, we believe and we (still) believe that we need these powers to move forward," he said........
Do not erode RBI autonomy
......In his earlier stint in Finance, Chidambaram had had an uneasy relationship with the then RBI Governor Y V Reddy for the latter would not heed his pressing advice on rate- cuts. Now it is the turn of Subbarao. Since he had been the RBI Governor himself, we expect the prime minister to intervene, and draw a ~ Lakshamrekha~ beyond which the finance minister would not go to try and pressurise the RBI Governor to do his arbitrary bidding. It is another matter that during his stints as RBI Governor Singh had readily given in to the wishes of his ministerial bosses. Times have changed. And Reddy and, now Subbarao, epitomise the spirit of a transparent system, which demands adherence to institutional roles and rules rather than a meek submission to arbitrary ministerial diktats........
Miffed Chidambaram widens rift with RBI
.....While the RBI, headquartered in the financial capital of Mumbai, is not statutorily independent, it has tended to enjoy a high degree of autonomy, and Subbarao has resisted pressure in the past from New Delhi to ease policy. But this is probably the first time the government has made its displeasure so vocal. Whatever happens from now on, whether New Delhi needs to do more to convince its central bank, or whether Subbarao cuts rates during his next review meeting, it will be interesting to watch how the relations between two major policy making centres, which seem pretty cold at present, will pan out from here.........
Covered bonds with NHB Intermediation coming?
.... The Group included representatives from ministry of finance, Reserve Bank of India (RBI), leading mortgage originators, rating agencies, banks, etc. NHB is reportedly interested in fast-tracking the issuance of covered bonds in India. The Group has given a draft of Covered Bond Regulations that NHB may promulgate. If the needed amendment of law can be passed without any delay, covered bonds in India may be a reality very soon......
'The disagreements need to be settled internally'
.......Is there a disconnect between the finance ministry and the central bank over interest rate?
There is no disconnect. Both the government and RBI have shared goals and concerns, Both of us want high & stable growth and low & stable inflation. And we have our respective responsibilities. It is a question of timing. And I think that the government understands our concerns. We understand the government’s compulsions......
Subbarao to FM: Believe your intent, but will wait for action
.....Subbarao, it would appear, is keeping a possible repo rate move on until the fourth quarter of FY13. So until December, the rate cut debate will need to be kept aside. The good news for Chidambaram, however, is the RBI governor appears convinced of the finance minister’s intent to bring about fiscal consolidation. One of the “expected outcomes” of the October policy action, the central bank says, is to “reinforce the growth stimulus of the policy actions announced by the Government as inflation risks moderate......
We will walk the path alone, says Chidambaram on growth challenge
Is FM pitted against an old boy network?
.....Mr Rangarajan's influence over monetary policy is no secret in Mint Street. It may have waned a little from the days of the Lehman collapse when a clueless Subbarao was groping to find a way out of the crisis, but it's far from gone. Even Yaga Venugopal Reddy, Mr Subbarao's predecessor and who also served as RBI Deputy Governor under Mr Rangarajan, shared notes with the latter and considered him as a mentor. Indeed, when it comes to monetary policy and timing of a rate cut there may be a striking similarity in the thinking of three gentlemen: Mr Reddy, Mr Rangarajan and Prime Minister Manmohan Singh, another former RBI Governor. The finance minister had perhaps underestimated the power of the old boy network that financial markets often forget - as was evident on Monday when a top notch analyst changed his forecast at the last minute to predict an interest rate cut by RBI..............
Central bank fortifies its credibility
The October policy was a true litmus test for the Reserve Bank of India’s (RBI) inflation-fighting credibility. While the pressure to cut rates was immense, it was hard to find an economic justification. By choosing to stay put, RBI has fortified its inflation-fighting credibility, which is reassuring and a long-term positive.........
Policy rates may be cut in fourth quarter: RBI
......“The projections are at best approximate…I cannot give guidance about what will happen in January and March, but if projections indicate a moderation in inflation for the March quarter then we could take some action in January,”........
RBI may cut interest rate only in Jan: Rangarajan
......"Perhaps for a change in the policy rate, the RBI is waiting for a period or an opportune movement when there could be sustained decreases in interest rate. "I think they would start doing it only in January, unless there is some strong tendency for inflation to decline in the next four-five weeks. That doesn't appear to be likely at the moment,".....
RBI is struggling to strike a balance between growth & inflation: DD Rathi, Aditya Birla Group
...... I was not expecting much from the RBI policy. If you look at their last one year's track record, they have mainly focused on CRR cut. If you look at the period of last one year or less than one year, they have reduced the CRR by 1.75% which only helps liquidity. The major worry for corporates has been the interest rate. When it comes to growth, the government and RBI both have to act. We do expect that interest rates should come down. India's best growth has taken place when the interest rates were low..........
Growth should be higher on agenda
......"I can see that the RBI remains concerned about inflation. I think we need to watch what happens in inflation but probably the need to push the growth at this moment is little higher on agenda than the concern about inflation," ...............Read - ET
More CRR cuts depend on liquidity crunch: Gokarn
The Reserve Bank of India will conduct open market operations (OMOs) or reduce cash reserve ratio (CRR) depending on the liquidity deficit situation, Deputy governor Subir Gokarn said today........
Policy addresses persisting inflationary threats: M Narendra
The constellation of economic and financial indicators at the Second Quarter Review of Monetary Policy point to persisting threats from inflation more than immediate opportunities for growth. The RBI has, therefore, opted to continue with its efforts to douse the embers of inflationary expectations with a hint/hope of a possible policy easing in the fourth quarter.........
More tokenism
......Today’s circumstances require lower interest rates to stimulate overall demand, alongside fiscal consolidation emphasising a redirection of government expenditures away from consumption to investment. What we are seeing, instead, is a holier-than-thou RBI and a Government, whose recent policy reform pronouncements – including the Finance Minister’s ambitious five-year fiscal correction roadmap unveiled on Monday – are subject to political uncertainties as parties gear up for a long election season till May 2014. .......
SBI vs RBI round II: CRR a waste for economy, says Pratip Chaudhuri
State Bank of India chairman Pratip Chaudhuri, yet again, took on the Reserve Bank of India (RBI) today, saying saying CRR is a "waste" for the economy and successive interest rate cuts by central bank have failed to contain inflation. "Of course, I am an incurable optimist and I had expected a 50 basis points CRR cut. I still hold that CRR is a waste for the economy," he said after RBI Governor D Subbarao unveiled the half-year review of the credit policy which had a 0.25 per cent cut in CRR..........
CRR cut will not have much effect on lending rates, feel bankers
 |
| (from left) Shikha Sharma, Managing Director and CEO, Axis Bank, Chanda Kochhar, MD and CEO, ICICI Bank, K.R. Kamath, Chairman, IBA, and Pratip Chaudhuri, Chairman, SBI, at a press conference on Monetary Policy in Mumbai on Tuesday |
RBI to consider more CRR cuts if cash deficit persistent
T
he Reserve Bank of India will consider easing banks' cash reserve ratio (CRR) further if liquidity deficit persists for more than a few weeks at a stretch, Deputy Governor Subir Gokarn said on Tuesday.....
RBI's forecasts, initiatives depend on govt policy: Gokarn
The underlying structural factor that has been pushing the RBI to increasingly use the CRR this year is the persistently increasing wedge between deposit and credit growth
Read.......
Read.......
Will inflation rise or fall? Even RBI doesn't have a clue
...........As RBI has rightly pointed out, there are far too many factors at play simultaneously that goes into shaping inflation. That being the case, the central bank can be forgiven for being as clueless about it as the man on the street is............
RBI takes baby steps to reduce frauds, fix rates
..........one strong proposal, though still at a pilot project level, is double authentication of card transactions through Aadhaar. It means that, along with swiping the card, the Aadhaar biometric authentication – either through an Iris scan (scanning of eyes) or a fingerprint – will also be required for both at ATMs and PoS terminals. So, stolen cards will be useless as transactions won’t be possible without a fingerprint or Iris scan. The pilot project will start in Delhi from November 15...............
Interview with RBI Governor D. Subbarao
RBI governor D. Subbarao says that while growth remains an important concern for RBI, it needs to be balanced with the fight against inflation
RBI Governor Subbarao's full speech on interest rate cut
.....over the past few quarters, monetary policy had to focus on inflation, even as growth risks have increased. As recent policy initiatives by the Government start yielding results in terms of revitalising activity, they will open up space for monetary policy to work in concert to stimulate growth. However, in doing so, it is important not to lose sight of the primary objective of managing inflation and inflation expectations. This policy review is set in the context of the above global and domestic concerns. It should be read and understood together with the detailed review in Macroeconomic and Monetary Developments released yesterday by the Reserve Bank.......
Vijay Cooperative Bank penalised for violation of RBI norms
Ahmedabad: Reserve Bank has imposed Rs 5 lakh penalty on city-based Vijay Cooperative Bank for violation of KYC norms and other guidelines......
RBI may Grant New Licences to UCBs
.........Urban co-op banks came under the regulatory glare of RBI post the Madhavpura Co-operative Bank debacle resulting from misuse of funds and run on deposits that affected the credibility of the co-operative banking system. But, after 2002, the RBI started playing a bigger role in regulating UCBs by signing a memorandum of understanding with various state governments.
Read.........
RBI permits UCBs to undertake forward contracts in corp debt
....."It has been decided to include scheduled UCBs with strong financials and sound risk management practices as eligible participants to undertake repo transactions in corporate bonds," RBI said in a notification. .......
Partial fix for NPAs
....Given this, RBI has done the right thing by telling banks to put in place a mechanism to evaluate the risks from unhedged positions and to report this regularly to RBI, apart from pricing this in while extending credit to them. In the case of restructured loans, RBI has advanced some of the recommendations of the Mahapatra committee that was to review this. While the draft guidelines will be issued by the end of January 2013, RBI has said that provisioning on restructured standard accounts is to be hiked from 2% right now to 2.75%. While that’s a good step, it may not be enough—indeed, the RBI working group had suggested a figure of 5%. More important, if regulatory forbearance is being abused—based on Chakrabarty’s data—RBI needs to come out with some norms, including personal guarantees of promoters. Hopefully, we’ll see this in the January guidelines.......
'NPAs are not alarming as our banking system is robust’
What was the thinking behind the CRR cut?
I have explained the rationale in the policy document. The monetary situation is determined by two variables – the policy interest rate and the liquidity conditions. We want to keep liquidity comfortable. Comfortable liquidity when interest rates are very high does not happen. Lowering interest rates when liquidity is tight does not happen..................
Read - The Hindu
Frame new law for Islamic banking: RBI
Putting an end to the speculation on allowing Islamic banking in the country, the Reserve Bank of India (RBI) governor, D Subbarao on Tuesday said the current Banking Regulation Act does not permit Islamic banking and that the government will have to bring in a new law if it wants to introduce it in the country..........
Time for more subordinate legislation for the financial sector
...........There have been examples of piecemeal transfer of authority to subordinate legislation in the past. In the last decade, RBI got the power to set statutory liquidity ratio (SLR) and cash reserve ratio (CRR) levels, unencumbered by limits set under laws earlier. Some regulations had moved from the Companies Act to Sebi and the Insurance Act to Insurance Regulatory and Development Authority (Irda). The prohibition on preference share issues by State Bank of India (SBI) was removed and thereafter it needs to follow RBI regulations on preference capital. There was an individual shareholding limit of 200 shares listed SBI associate banks, and that too only in paper certificates form—this was repealed and harmonized with Sebi rules.............
Total4U violated RBI norms: Police tells court
KOCHI: Sabarinath, who duped the public through a Ponzi scheme named Total4U, has been booked for violating the Reserve Bank of India (RBI) regulations, in addition to charges of cheating, police submitted to the Kerala high court on Monday............
RBI directs banks to monitor unhedged FX exposures
The Reserve Bank of India has asked banks to put in place systems to monitor unhedged foreign currency exposures of corporates.............
Read - ET
Read - ET
RBI panel to resolve stress in financial conglomerates
.........This inter-regulatory forum, to be headed by RBI’s Deputy Governor (banking supervision), will institutionalise the framework for supervision of financial conglomerates (FCs). It will also develop framework to monitor and management of systemic risks emanating from their activities. This forum will assist the Financial Stability and Development Council (FSDC) for monitoring the functioning of SIFIs. The forum will be responsible for framing policies for FCs such as identification, group-wide risk management, and corporate governance...........
Banks can't lend to jewellers for purchase of gold: RBI
....."No advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilised for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion," the RBI said in its half-year review of the monetary policy..........
Subscribe to:
Posts (Atom)