....It has unequivocally advised the RBI to ease monetary policy as part of an overall package to stimulate growth. The dilemma faced by the RBI was to formulate its monetary policy in the context of falling growth and rising inflation. Given this tricky situation, the RBI has deftly gone in for what could be called a damage-containment monetary policy.......
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.
Friday, November 2, 2012
Finance ministry begins search for Gokarn’s successor
The finance ministry has constituted a search committee to identify a successor for Reserve Bank of India (RBI) Deputy Governor Subir Gokarn, whose three-year term comes to an end on 23 November, according to two people familiar with the development..........
RBI organises national quiz competition
....The preliminary and pre-quarter rounds for Goa were conducted on Wednesday at Don Bosco High School, Panaji. Students from 18 schools participated in the quiz. The Zonal Finals and National Finals would be held at Kolkata on December 3 and 5. The winners of the quarter final round of RBIQ in Goa were Rajanala Samyak and B Raghavendra of Kendriya Vidyalaya, INS Mandovi, Verem, Goa, who will compete with other teams from the Western Zone.
No sectoral concessions under CDR: RBI
The Reserve Bank of India (RBI) has no plans to introduce sectoral packages for extending relaxations in corporate debts restructuring (CDR) as demanded by the industry in view of the current and global economic conditions, said Chief General Manager Deepak Singhal at an ASSOCHAM event. While addressing a 'Seminar on Restructuring of Corporate Debts' organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), Singhal, chief general manager, DBOD-CO, RBI, informed that RBI has constituted a high power committee of two Dy. Governors, K C Chakrabarty and Anand Sinha to speak to the CMDs of all the banks to know the problems faced by SMEs and suggest to arrest the rising sickness in the SME sector. The committee is likely to submit its report by end of the November...........
RBI takes no position on exchange rate movement: D Subbarao
..... I want to say for the record that the RBI does not take a position on the exchange rate or on exchange rate movement. We manage volatility and exchange rate should be largely market determined. Coming to your specific question, current account deficit last year, at 4.2%, was historically the highest, the first quarter deficit, at 3.9%, is quite high, we should bring it down. Reserve Bank's estimates show that if the economy grows at 6-8%, a sustainable current account deficit is between 2.4% and 2.6%. That’s where we should be headed........
Relying on RBI survey could be misleading
The Reserve Bank of India (RBI) often mentions its OBICUS survey (order books, inventories and capacity utilization survey), which it carries out quarterly in its monetary policy statements. Capacity utilization, in particular, is an important gauge of the state of the industry, and it helps determine whether firms have pricing power. The latest OBICUS survey (18th round) says capacity utilization during the first quarter of FY13 is the lowest in 13 quarters. ........
RBI finds ally in Prime Minister's Economic Advisory Council chairman
The Reserve Bank of India has found an ally in C Rangarajan, the chairman of Prime Minister's Economic Advisory Council (PMEAC), who has sided with the central bank in the growth versus inflation debate. Rangarajan has said that to achieve its potential growth inflation has to come down and the government has to take "unpopular" decisions in curbing expenditure.......
Govt thought it had sealed a rate cut
.......Several officials that TOI spoke to said the finance ministry had been working to ready the plan for at least a fortnight. But the pace picked on Friday, the day RBI Governor D Subbarao and Chidambaram held the customary pre-policy meeting. Senior officials said they were suddenly asked to speed up the fiscal consolidation plan. Although, three to four options on the fiscal deficit targets had been discussed, the finance minister himself drafted a final note which he discussed with the Prime Minister............
RBI differs with government on 4 issues
Differences between the Reserve Bank of India and government are out in the open with RBI governor D Subbarao on Tuesday spelling out four where it doesn't see eye to eye with the finance ministry. ...........
What’s CRR?
This
refers to ‘Do RBI Rate Cuts Matter?’ (ET, Nov 1). Clearly, in India,
the unorganised lending system is more popular than the organised
system, i.e., the banking system, especially in rural areas. With a lack
of basic banking facilities, poor farmers and illiterate people fall
prey to moneylenders. The cut/ increase in rates of interest, increase
or decrease in CRR or base rates hardly matters to these people. Our
banks are more interested in lending to the likes of Vijay Mallya and
restructuring loans given to Kingfisher Airlines.
- VEENA SHENOY, Thane (ET)
- VEENA SHENOY, Thane (ET)
RBI modifies definition of sickness for assessing viability of MSEs
The Reserve Bank of India (RBI) has modified the definition of sickness and a procedure for assessing the viability of sick Micro and Small Enterprises (MSEs). According to a notification issued by the RBI on Thursday “a MSE is considered sick when any of the borrowal account of the enterprise remains NPA for three months or more or there is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth.”..........
Hedging habit
....The Reserve Bank of India’s (RBI) latest directive, asking banks to charge a higher risk premium on loans made to corporates who haven’t hedged their exposures to forex fluctuations should be seen in the above light. More than half of Indian companies’ foreign currency exposures today are totally un-hedged. It is difficult to see how corporates can price their products correctly, so as to ensure a desired level of profitability, if they face uncertainties on their forex-related costs. .....
Balanced policy
......There is, however, a sense of differences in perception between the RBI and the Government over the rate cut. The RBI’s action suggests that it would not like to risk cutting the repo rate for now and allow inflation to go out of control again for the sake of growth, even though growth concerns have picked up. In that context, the RBI definitely deserves a pat on the back......
Playing Safe
For the governor of the Reserve Bank of India, Duvvuri Subbarao, the name of the game is consistency, and he stuck to his guns in the second quarter review of monetary policy for 2012-13 by not cutting policy interest rates as many had hoped. Inflation is still too high and too sticky to warrant a cut. The RBI’s policy stance has been consistent since January this year: maintain an interest rate environment that contains inflation and anchor expectations, maintain a modest liquidity deficit for the banking system, and respond to downside risks to growth..........
PNB to launch remittance card in Kochi today
Punjab National Bank (PNB) is launching India’s first co-branded remittance card — PNB Remit Card — in association with UAE Exchange and Financial Services Limited in Kochi on Friday. The prepaid card will be beneficial to NRIs and their kin for transferring funds from abroad and for using in merchandise establishments......
India’s Roadmap to Nowhere
........Timing it perfectly — just a day before the Reserve Bank of India was to unveil its monetary policy – the release seemed to be a desperate effort to nudge the RBI into action. The RBI in the past has called for the government to contain the deficit before it can aggressively reduce interest rates. This seemed to be a bid to show that the government is on the case, so the central bank can act. Not surprisingly, the RBI didn't act. It clearly prefers to await the evidence than pay heed to over-optimistic statements......
Understanding the Potential for Financial Services Innovation in India
.....The research objectives of the study were as follows:
- To identify innovative products and delivery channels and understand what features make a product accessible and attractive to low-income households;
- To understand the savings landscape in India in the context of the diversity of financial institutions serving the poor;
- To draw lessons from the financial inclusion campaign of the Reserve Bank of India (RBI) and the Indian government and the impact that this has had on access to savings. To identify gaps for future research on savings product demand, usage, and evaluation........
Please enter your passwords
.....As online transactions keep increasing by the day, you cannot escape the reality of multiple user-ids and passwords. So, you now have to live with a plethora of user-ids and passwords, and try to perfect the art of remembering these. You may try eating almonds and greens to boost your memory. Just as the “one nation, one entrance test” is being debated hotly in India, is there a possibility of one user, one password? Or, is it too risky? Is there a better solution to this problem? Let us ponder the possible solutions to tackle this ever-growing problem of memorising a large set of user-ids and passwords......
Thomas Cook joins hands with MasterCard to launch “borderless prepaid card”
.....The “borderless prepaid card” enables travellers with the option of loading eight currencieson a single card—US Dollars, British Pounds, Euro, Australian Dollars, Canadian Dollars,Swiss Francs, Singapore Dollars and Japanese Yen. “It is a multi-currency card with a validity of five years, within which the cardholder can get the visiting country’s currency loaded on the card, thereby, saving money and time. An embedded chip and PIN ensures security and increased protection against counterfeiting and skimming card frauds,” ......
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