RBI governor once again displays autonomy

 The Reserve Bank of India Governor, D Subbarao has once again displayed his autonomy by defying going against the market economists'advise of rate cut during the recent monetary policy review, with only one of the six economists supporting a policy status quo.......

........The meeting was chaired by Governor D Subbarao. Other members present for the meeting include Subir Gokarn, Deputy Governors, K.C. Chakrabarty and Anand Sinha. External members present in the meeting include Y H Malegam, Indira Rajaraman, Sudipto Mundle, Errol D'Souza and Ashima Goyal. Rakesh Mohan. Shankar Acharya a member who was not present at the meeting submitted his written views. RBI officials, Deepak Mohanty, Michael D. Patra, B.K. Bhoi, B.M. Misra and Pardeep Maria were also present in the meeting.  

Read - ET

RBI Chief urge Government to spend more on productive purposes

Highlighting the need for government spending on productive purposes, Reserve Bank Governor D Subbarao said future generations should not pay the price for the high borrowing of today. Government borrowing is not necessarily bad, but if the government borrows and consumes, that is bad," .......

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Gokarn to continue as RBI Deputy Governor till December 31

The Finance Ministry has asked the Reserve Bank of India’s Deputy Governor Subir Gokarn to continue till December 31. His three-year term was scheduled to end on November 23. The Financial Services Secretary D. K. Mittal announced his extension saying that there should not be vacancy. A search committee has been constituted to advise whether Gokarn will get another two-year term or there will be a new Deputy Governor.............

Read - HBL

Special Exhibition on Glimpses of Cooperative Movement in India, 1904-1982

A special exhibition on the Glimpses of Cooperative Movement in India, 1904-1982 has been organized by the Reserve Bank of India Archives in its Archives Museum as a part of the celebration of the year 2012 as the International Year of Cooperatives. Dr. D. Subbarao, Governor, Reserve Bank of India visited the special exhibition after inaugurating the International Conference on Cooperatives at the College of Agricultural Banking, Pune on November 16, 2012. Smt. Meena Hemchandra, Chief General Manager and Principal, CAB and Shri R.L.Sharma, Vice Principal, CAB accompanied the Governor to the Archives Museum. Dr. R.L.Sahoo, Chief Archivist explained about the exhibits to the Governor. 

The exhibition sheds light on the history of cooperative movement in India from the enactment of the Cooperative Credit Societies Act, 1904, which is the first legislation on the cooperatives, till the year 1982 when the National Bank for Agriculture and Rural Development (NABARD) was established. The exhibition on the cooperative movement in India is based on the rare archival documents that include office notes, Memorandum to the Committee of the Central Board of RBI, correspondence with the Government of India, various Committee Reports and RBI publications preserved in the Reserve Bank of India Archives. This special exhibition depicts the journey of the cooperative movement and brings alive its glorious history. The exhibition is open to visitors and general public on all working days (Monday-Friday) between 2 PM to 5 pm at the RBI Archives Museum, College of Agricultural Banking, Reserve Bank of India, University Road, Pune.

G 20 and India: Dr. D. Subbarao

.....The Reserve Bank recognized Shroff’s expertise and innovative thinking early on when, in 1953, it set up a committee under his chairmanship to examine how the flow of finance to the private sector could be enlarged. The Shroff Committee recommendations played a key role in defining the basis for institution building in the financial sector - ICICI and at a later date IDBI, were set up as development financial institutions, a deposit insurance corporation in the shape of DICGC came in the early sixties and the Committee’s suggestion of setting up unit trusts as vehicles to channelize small savings into investments provided the basis for the later day UTI.........

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Liquidity is comfortable at the moment: K C Chakrabarty

...."I think liquidity is okay...whatever is the liquidity, that is adequate and comfortable. This is always monitored," Reserve Bank of India Deputy Governor K C Chakrabarty said on the sidelines of an event organised by Assocham......

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Banks can cut rates in current policy framework: RBI

New Delhi: Banks can further reduce interest rates within the current monetary policy framework, but are penalizing good borrowers because of rising bad debts, said K.C. Chakrabarty, Deputy Governor at Reserve Bank of India (RBI)..........

Read - Mint

Liquidity is comfortable at the moment: Chakrabarty

The Reserve Bank on Wednesday said there is enough liquidity to take care of the lending activities of the banking system. “I think liquidity is okay...whatever is the liquidity, that is adequate and comfortable. This is always monitored,” Reserve Bank of India Deputy Governor K.C. Chakrabarty said on the sidelines of an event organised by Assocham in New Delhi........

Read - The Hindu

The Game Changers: 20 Extraordinary Success Stories of Entrepreneurs from IIT Kharagpur

Many IITians after graduation tend to head for MNC jobs and seven figure salaries – but several have chosen the different path of entrepreneurship. This book traces the story of 20 such entrepreneurs from IIT Kharagpur. The introduction is written by Damodar Acharya, director, IIT Kharagpur, and the foreword by alum D. Subbarao, Governor, Reserve Bank of India. This book joins a range of others about entrepreneurs from Indian institutes (such as IIM-Ahmedabad). 

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RBI overplaying inflation, says Jagdish Bhagwati

.....There will be pressure on RBI from the Government to cut rates and prop up growth, especially with general elections not very far away, where it will have to establish its credentials before the voters, Bhagwati argued. The professor of economics and law at the Columbia University, however, applauded Subbarao for standing up and preserving the independence of the central bank by not giving in to Government's wishes in the recent times. "It is a very good thing and that is a plus factor."

Read - BS

RBI signs MoU with the State Bank of Vietnam

.....The MoU was signed on November 16, 2012 at SBV Headquarters, Hanoi, Vietnam, by G Jaganmohan Rao, Chief General Manager-In-Charge, Department of Banking Supervision, Reserve Bank of India and Nguyen Huu Nghia, Chief Inspector, Banking Supervision Agency, SBV. .....

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Legal liability of a stolen cheque

As all nationalized banks are working under the control of the Reserve Bank of India (RBI) they are expected to follow rules and regulations codified by the same regulatory authority. But if something unforeseen incident happens and if there is no co-ordination or understanding of co-operation between the banks,  they are susceptible to legal confrontation. This has happened in case of a stolen cheque which was deposited in one bank and was en-cashed by the person who stole it by producing it in the bank which had issued the cheque........

Read - Moneylife

Banks to face penalty for violating info sharing norms

The Reserve Bank of India today said banks may face penal action if they fail to adhere to the norms regarding sharing of information relating to credit, derivatives and unhedged foreign currency exposures among themselves.Banks have been asked to put in place an effective mechanism for information sharing by end-December 2012..........

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RBI asks banks to monitor unhedged forex exposures of companies

.....In February 2012 banks were directed to rigorously evaluate the risks arising out of unhedged foreign currency exposure of the corporates and price them in the credit risk premium while extending fund-based and non fund-based credit facilities. It had also asked banks to consider stipulating a limit on the unhedged position of corporates on the basis of banks board-approved policy. However, the central bank is not convinced with the banks actions. Hence, the RBI reiterating its directive has asked banks to implement the norms and submit a compliance or action taken reports to the Reserve Bank before end-December 2012 after obtaining the approval of their board of directors. The central bank is planning to put in place a detailed guideline to ensure forex exposures of corporates are covered. 

Read - ET

Sudha Krishnan appointed nominee director on Canara Bank

“...the central government, nominated Sudha Krishnan, Joint Secretary, Department of Expenditure, as government nominee director on the board of directors of Canara Bank with immediate effect and until further orders,” Canara Bank said in a filing to the BSE.........

Read - HBL

Transforming the way banking is done

.......What impact have the new banks had? Today, they have a market share of 20 per cent in deposits and advances. This has been achieved in a growing market, indicating that private sector banks have successfully capitalised on the growth of the Indian economy. But more than acquiring market share, the real contribution of private sector banks has been to transform the way banking is done in India. ......

Read - Business Today

KPMG Study of India's Best Banks in 2012

.....The Reserve Bank of India (RBI) is in the process of classifying some domestic banks as systemically important institutions that would get special regulatory attention. Banking institutions worldwide are yet to recover from the shocks of 2008. The net gainers are Chinese banks, which advanced in the top 100 global bank ratings.........

Read - Business Today

The gold effect on inflation

..........In conclusion, if gold prices stay elevated or increase going forward, and wealth effects emanating from this externally generated feature are quantitatively important, then monetary policy has that much more work to do to tame inflation.

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Gold gains with dollar flat

NEW YORK, Nov. 21 (UPI) -- Gold prices rose Wednesday as the Reserve Bank of India banned banks from loans earmarked for gold purchases. The bank said the ban was meant to discourage speculative gold purchases. Borrowing could continue for gold purchases for jewelers, however, the banks said..........

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Govt wants to wean you off gold: You should say ‘no, thanks’

.....In fact, both the finance ministry and the Reserve Bank are being hypocritical in trying to de-emphasise gold here. In 2009, they themselves bought 200 tonnes of gold in order to bolster official reserves – indicating that they have less trust in paper reserves (even US dollars) than gold. What is sauce for the RBI is not sauce for us ordinary folks? The RBI’s accounts for 2011-12 show that while foreign currency assets went up by 14.2 percent, the value of gold holdings went up by 31.5 percent......

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