Low economic growth will be factored in monetary policies: RBI Governor D Subbarao

RBI Governor D. Subbarao with Deputy Governors Subir Gokarn, Arvind Mayaram and KC Chakrabarty at the Central Board Meeting of Reserve Bank of India in Kolkata

....... "We in the RBI are always trying to manage the balance between growth and inflation. The fall in growth to 5.3 per cent in the last quarter is a steep moderation." ...........

Read - ET

RBI Governor hints at rate cut as growth falters

“We are expecting that inflation will trend down starting the fourth quarter. As we go into our mid-quarter policy on December 18 and the quarterly policy on January 29, we will take into account the growth-inflation trajectory and calibrate our monetary policy accordingly,”

Read - The Hindu

Bang for the buck

........ In 1995, the then Finance Minister Dr Manmohan Singh was invited to inaugurate HDFC Bank. Because of imminent elections, a formal inauguration was scrapped. However, Dr Singh did come, with Dr C Rangarajan, the then RBI Governor. Dr Singh was impressed with computerisation and ATMs. “The bank had prepared dummy ATM cards in the name of Singh and Rangarajan. While demonstrating how an ATM worked, Ram (the bank’s technology head) inserted the card with Singh’s name into the machine and punched in the keys. The ATM instantly flashed a message indicating insufficient funds,”.......

Read - BS

Cell phone antenna near RBI Governor’s house has short life

A cell phone network booster near the RBI Governor’s Bungalow at Carmichael Road was dismantled within two hours of it being installed, following complaints from nearby residents. On Thursday, an 85-year-woman in one of the residential colonies near the RBI Governor’s bungalow called up Malabar Hill resident Prakash Munshi after she saw a leading mobile network company erecting a mast near the bungalow. “The woman was worried about radiation from the Vodafone antenna as her house was metres away. She was more concerned about her family and the other residents in the area than herself. Soon, I got a call from another resident from the area. After speaking to both, I called up the office of the RBI Governor immediately,”...............

Read - IE

Psst. RBI has Rs 7,00,000 cr under its pillow, but don’t tell Chidu

The good news is that the Reserve Bank of India (RBI) is richer than what it has been telling us so far. The bad news is that everyone is getting to know this, including the finance ministry. It’s bad news because the government is trying to extract every rupee from everyone to make ends meet. Extracting money from the RBI is the easiest job for any finance minister. In an article in The Economic Times, former Infosys CFO TV Mohandas Pai and his colleague at Aarin Capital Partners Rajesh Moorti have now disclosed the extent to which the RBI may be understating its underlying surplus – and it could be over Rs 7 lakh crore. And how did this money come to light? Did the RBI hide it? Not quite, but it has been showing it under different heads........

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Don’t relax the inflation target

The RBI Governor should think twice before pegging the target rate of inflation at a higher level and calling that the ‘new normal’. There is no basis to the argument........

Read - HBL

West Bengal's public finances among the weakest: Subbarao

Kolkata: RBI Governor D Subbarao on Thursday said the state of public finances of West Bengal is poorer than most of the states in the country. "In the field of West Bengal's public finances, it is weaker than most states of the country. RBI recognises that," he told reporters after RBI's central board meeting here.........

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RBI asks states to keep a tab on chit funds

.....“The responsibility for checking (on such funds) and prosecution for violation of the law is with the state governments. We have written to all of them to be vigilant about this and take appropriate action,” .......

Read - IE

Mamata finally meets RBI Governor

It is customary for a RBI Governor to meet the CM when he visits the state

......Yesterday, there were different accounts on why the chief minister decided to scrap the meeting. The most popular reason (three people confirmed it): Banerjee was watching the parliamentary proceedings on FDI in retail that was being telecasted live at the time of her scheduled meeting with RBI governor. Banerjee was certainly not pleased with the outcome as she has been resisting the move to allow foreign investors investing in the multi-brand retail sector. Another reason was the chief minister was pressed for time as there was a state cabinet meeting. The cabinet meeting started at 6 PM and according to sources she presided over it for about 15 minutes.

Read - BS

'Cash scheme may not push up inflation'

The government’s direct cash transfer scheme for subsidies might not lead to an increase in inflation, said D Subbarao, governor at the Reserve Bank of India (RBI). “If cash is used for necessary consumption, (then) it will be productively spent. I don’t think there will necessarily be any implication of inflation on that,” he said to a media query after the central bank’s board meeting ..........

Read - BS

Banks advised to increase the pace of NPA recovery

.....The cause for concern is the fact that the NPAs of public sector banks rose close to one percentage point from 3.17 per cent to 4.01 per cent in six months to September 2012, according to official records of the Finance Ministry. On its part, the RBI has asked banks to have a loan recovery policy, which sets down the manner of recovery of dues, targeted level of reduction (period-wise), norms for permitted sacrifice/waiver, factors to be taken into account before considering waivers, decision levels, reporting to higher authorities and monitoring of write-off/waiver cases......

Read - The Hindu

Core investment companies need RBI nod to invest overseas

.....CICs desirous of making overseas investment in the financial sector will need to have a Certificate of Registration (CoR) from RBI and comply with all the regulations applicable to registered CICs, the central bank said in a statement......

Read - HBL

United Forum’s Dharna at Kolkatta for Pension Updation

RBI Central Board Meeting has been held at Kolkatta on 6 Dec. 2012. The United Forum of RBI Officers and employees held  mass dharna today by the officers, employees and the retirees  before the Central Board, as done  at Chennai office earlier, demanding immediate updation of  Pension. The Governor met the Office Bearers and told them that he is at it. He assured his help in solving the issue in favour of the employees at the earliest.

- B.Chandraiah (via e-mail)

Proposal to close down the public counters in the Banking Hall

During the recent Tele conference the Dy. Governor Shri Chakrabarty has announced the Bank’s proposal to close down the public counters in the Banking Hall from the New Year.  

The office bearers of the United Forum went on a deputation to the Deputy Governor at Mumbai immediately to protest against the Bank’s ill advised move. The Office bearers of the United Forum met the Regional Directors at all centres to convey their protest. The United Forum which met at Kolkatta today decided to go on a day’s strike at all centres if the Bank contemplates to implement this decision.

- B.Chandraiah (via e-mail)

Mass Memorandum to Governor requesting improvement in Ex Gratia to pre-1986 retirees

The Forum of Retired Employees of RBI, Chennai has decided to highlight the need for improving the Ex Gratia  and  Medical allowance to the Pre 1986 Retirees and  the recipients of family ex gratia. The Forum’s office bearers will float a mass memorandum to be submitted to the Governor. They will collect signatures of all the pre 86 retirees etc. individually in the memorandum and the job has been commenced  today.

- B.Chandraiah (via e-mail)

Cheque bounce cases: FinMin mulls ‘Lok Adalat type’ redress mechanism

To cut down the number of cheque-dishonour cases, the Finance Ministry is looking at an alternative dispute resolution mechanism, such as a Lok Adalat. The idea is to consider prosecution under Section 138 of the Negotiable Instruments (NI) Act only if the alternative mechanism too fails. Section 138 deals with penalties in case of dishonour of cheques due to insufficient funds in the bank account of the drawer......

Read - HBL

Banks get electoral rolls to create Aadhaar accounts

The government is using electoral rolls to open bank accounts in the 51 districts chosen for the roll-out of the direct cash transfer of subsidies. “Banks have been given electoral rolls in rural areas and they have to ensure that per family at least one account is opened,” a senior bank official said. Public sector banks have been asked to open the bank accounts by December 15. The accounts would be used to transfer cash subsidies directly to beneficiaries........

Read - BS

What’s fair for banking industry may not be so for the customers

.....as the Banking Codes and Standard Board of India (BCSBI) embarks on a “Review of the Code’s of Banks Commitment to Customers” many national regulators are introducing, reviewing and strengthening legislation and guidelines to govern the way in which financial products are developed, sold, and serviced. And, in almost all instances, the principles which underpin these guidelines are the same. The clear and simple message is this—treat your customers fairly and be prepared to prove it......

Read - Moneylife

Banks will requires Rs 5 lakh crore capital by Mar,2018: Meena

The government today said Indian banks will require capital to the tune of Rs 5 lakh crore by March, 2018. "...the broad level estimates of RBI, based on the data obtained from banks, suggest that by March 31, 2018 the total regulatory capital requirements of Indian banks would be to the tune of Rs 5 trillion; of which non-equity capital will be of the order of Rs 3.25 trillion while equity capital will be order of Rs 1.75 trillion," Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha.........

Read - IE

Capital cliff ahead

.....the Indian banking system will need almost $40 billion of additional capital by 2018. Various other analysts have also come out with similar numbers. Even the RBI has talked of such large numbers in its various reports. Thus, Mr Varma is not an outlier, nor do his calculations or assumptions stretch credulity. In fact one can argue that the numbers will be even larger if we assume that the RBI goes ahead and implements higher provisioning norms for restructured assets and some form of dynamic provisioning......

Read - BS

A season of currency risks in India

......The provocation to remember all this is the concern repeatedly expressed by our banking supervisor on the issue of the unhedged foreign currency exposures of Indian companies and the credit risks they can lead to. The Reserve Bank of India (RBI) has been addressing banks on this subject for almost a decade: the Deputy Governor’s address at the FT-Yes Bank International Banking Summit on 16 October and the governor’s second quarter review of monetary policy on 30 October also referred to it. This was followed up by a circular on 21 November stating that “unhedged forex exposure risks are not being evaluated rigorously and built into pricing of credit by banks. RBI wants action-taken reports on the subject from commercial banks before the end of this month.”......

Read - Mint

What’s stressing banks

.....While RBI may need to react to Moody’s somewhat sweeping condemnation of how banks are governed, Moody’s also points out that India’s loan classification rules were far more lenient than in other parts of the world; it pointed out that very often bad loans were being categorised as ‘restructured assets’ in the process allowing banks to get away with lower provisioning. RBI needs to work on this and some of it will probably be addressed in the new rules but simply framing rules may not be enough, there is also something about the lending culture that needs to change. RBI Deputy Governor KC Chakrabarty, for instance, has pointed out that much of the restructuring doesn’t seem transparent and, moreover, that there seems to be some element of discrimination. Neither of these is desirable but.......

Read - FE

De-jargoned: Business correspondent

....According to guidelines issued by the Reserve Bank of India (RBI), various entities including non-governmental organizations and microfinance institutions registered under the Societies Act or Indian Trusts Act, societies registered under the Mutually Aided Cooperative Societies Act or the Cooperative Societies Act of States, post offices or various other individuals who qualify the RBI criterion can become BCs........

Read - Mint

Paper glitters more

......An interesting idea recently suggested by RBI Deputy Governor Subir Gokarn of popularising “paper gold” — financial savings instruments which are backed by gold — is worth pursuing immediately. Long available in centres like Singapore, these products in effect call upon banks to buy and sell gold at market determined prices so that their customers can enjoy all the benefits of gold investment without the hassles of storing it physically. The craze for physical gold will hopefully come down then.

Read - The Hindu

Holder of an instrument not affected by the taint of fraudulent preference: Court

.....The taint of fraudulent preference did not extend to the holder in due course said the Delhi High Court inReserve Bank of India vs JVG Finance Ltd when the petitioner sought to restrain the said Anup Rawla from en-cashing the Indira Vikas Patras.......

Read - HBL