..............What
the FM perhaps underestimated was the power of the old boy network.
Every action of Subbarao was openly supported by former RBI Governor C
Rangarajan and tacitly backed by Prime Minister Manmohan
Singh, another former Governor. Thus, the rift between FM and the
Governor could well be an outcome of politics at a different level. It
may be a little too early to judge Subbarao, often blamed for failing to
act on time to raise rates to tame inflationary expectations or buy
dollars to shore up forex coffers.................
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, July 31, 2013
The Man Who was Never His Master’s Voice
..............What
the FM perhaps underestimated was the power of the old boy network.
Every action of Subbarao was openly supported by former RBI Governor C
Rangarajan and tacitly backed by Prime Minister Manmohan
Singh, another former Governor. Thus, the rift between FM and the
Governor could well be an outcome of politics at a different level. It
may be a little too early to judge Subbarao, often blamed for failing to
act on time to raise rates to tame inflationary expectations or buy
dollars to shore up forex coffers.................
Subbarao doesn’t want extension: FM
..........."Dr Subbarao had met me a few weeks ago and said he would like to move on and he would not like to be considered for another term. I accepted. So now we are in search mode,"...................Need of the hour - constitutional protection to the tenure of the Governor
Finance Minister's speech in Ahmedabad is giving an impression as if the Governor had not expressed his views, in his recent meeting with the FM in Delhi, which would guide his credit policy announcement to be made later today. In fact, a wrong convention has been created by Governors (this Governor is not guilty of starting this practice created many years ago but is guilty of continuing with it) by meeting the FM a few days prior to every one of the Credit Policy announcements. While the FM has every right to ask the Governor to meet him when ever he wishes to discuss any policy issues, this practice of the Governor meeting the FM prior to the Credit Policy announcement does not augur well for the image of an independent autonomous central bank of the country. Of course, some could legitimately argue that this practice has served an useful purpose in that it has helped cement and confirm the universal impression that the RBI is totally subordinate to the Government and its autonomous character is a figment of imagination !! One or two Governors may have asserted his independence in one or two issues sometimes but this does not mean that the Bank can act independently. I wonder why the demand for a constitutional protection to the tenure of the Governor, in the manner enjoyed by the CEC, CAG, has not been voiced by anyone. This protection even when it is given should be accompanied by a total statutory prohibition on any sort of employment being taken up by the Governor after his retirement.
- A.Chandramouliswaran
Subbarao's impossible trinity
The sharp fall of the rupee against the dollar has made RBI's policy making complicated, as it now has to deal with exchange rate stability apart from addressing slowing growth and keeping a vigil on inflation, which could surge again. The weakening rupee forced RBI to tighten liquidity, which jacked up short-term rates.............
Finance ministry gives RBI a thumbs-up
New Delhi: The ministry of finance, which has disapproved Reserve Bank of India’s (RBI) move to hold on to policy rates over months, finally seems to be burying the hatchet with the banking regulator, courtesy the current account deficit (CAD) and a dwindling rupee. The ministry on Tuesday welcomed the RBI’s decision and stressed that the ministry and the RBI are on the same page as far as the key rates are concerned. Chief economic advisor Raghuram Rajan said, “RBI policy saw the main immediate macroeconomic task as that of stabilising the rupee, and once the rupee is stabilised, the policy makers will have room for more growth-friendly measures. The government welcomes the RBI policy statement..............
RBI maintains status quo; banks may raise rates in 3-4 weeks
 |
| D Subbarao, Governor, RBI, along with Urjit R Patel, Deputy Governor, address a press conference on Monetary Policy in Mumbai on Tuesday |
RBI keeps key rates unchanged; cuts India growth forecast to 5.5%
.........“The policy stance is guided by the need for continuous vigil and preparedness to proactively respond to risks to the economy from external developments, especially those stemming from global financial markets,” Governor D. Subbarao said in what would be his last policy announcement unveiled here...............
You Can Bank On It
In a year from now, at least 200 top bankers will get new business cards printed, and pocket an exponential rise in their take-home salaries. Mint Road would, at the minimum, have issued four new private banking licences; making it the single largest driver of hiring in the sector in a while. And, as money makes the mare go, it may not be much of a task to get folks in. You will see more of the same in state-run banks, but for an entirely different set of reasons. Of the 1.3 million employed by the banking sector, nearly 900,000 work for state-run banks. “They (state-run banks) will face a major talent pipeline challenge with over 80 per cent of the senior management set to retire in the next five years. There will be a shortage of skilled managers to replace middle management personnel who will be moving into these senior management roles,”................
Private banks training staff to serve rural customers
Thanks to Reserve Bank of India’s initiative to drive bankers to extend financial literacy across the large number of hitherto un-banked rural centres of the country, private sector banks are taking special initiatives to train their staff to cope with rural customers and set up branches in such hitherto un-banked centres in a big way...........
RBI says approved Srinivasan's appointment on YES Bank board for a year
................'There is an age limit of 70 years, but it is not a hard limit. When he was appointed, he was well short of 70. He has been given approval for one year. Some part of his term may go beyond 70,' Anand Sinha, Deputy Governor at RBI, told reporters in Mumbai today. Srinivasan was appointed as an additional director on YES Bank's board with effect from October 23, 2012. In the annual general meeting on June 8, 2013 Madhu Kapur had objected the appointment of Srinivasan, Nanda and Ravish Chopra on the bank's board......................
We are watching Yes Bank boardroom war carefully, says RBI
.“This boardroom battle which is going on (at Yes Bank), we are studying it and if we think that some measure needs to be taken on the issue, we will look into that,” said Deputy Governor in-Charge of Banking Supervision Anand Sinha during the customary post-policy interaction at the RBI headquarters.........
A confused, enigmatic RBI
.............If at all any lesson is to be learned from this latest episode, it is the criticality of giving the RBI a single point agenda and mandating it to attain that. The RBI titled its measures as meant to “address exchange market volatility”. Since volatility can be measured, it would help greatly if the RBI were to state its objective in quantitative terms. The market can then draw its own inferences as to whether more measures are needed or not. The scope for confusion would be greatly reduced.....................
RBI's move was on expected lines: Saumitra Chaudhuri
Saumitra Chaudhuri, member of the Planning Commission and the Prime Minister’s Economic Advisory Council, is one of the government’s troubleshooter for vexed economic problems. After Reserve Bank of India (RBI) Governor D Subbarao opposed the issuance of a sovereign bond, Chaudhuri, also one of those being considered for the top job at RBI, tells Sanjeeb Mukherjee quasi-sovereign bonds by a few public sector entities could help fund infra projects. Edited excerpts:..........
Bankers make barrage of demands to protect balance sheets
...........RBI on July 15 and 22 put severe restrictions of banks borrowings from liquidity adjustment facility and hiked rate for borrowing at standing facility. The purpose was to curb trend to use rupee resources for speculating in foreign exchange market. Bankers in interaction with RBI top brass sought a one-time permission to move securities from Available for sale (AFS) to Held to Maturity (HTM) bucket. This shifting of securities would be without marking them to market, they said. The exercise should be run on valuations that were on July 15.................
Need of the hour—India’s own version of Three Arrows
..........When RBI announced tightening measures over the last two weeks, it appeared that India had voluntarily chosen to undergo internal adjustment despite the skewed cost-benefit ratio. However, the policy statement belies this assumption and suggests that policymakers have misgivings about the cost to be paid for defending the currency. So what are the options now available? One option would be for RBI to undo part of the damage by reiterating its resolve to protect the currency and dropping its insistence that it is worried about growth. This would mean doubling down on the measures taken and if need be, carry out further tightening by hiking the marginal standing facility (MSF) rate by another 100-200 basis points. The second option would be to recognize the futility of trying to peg the exchange rate and reversing the interest rate tightening over the next few weeks. Either way, RBI actions would need to be bolstered by the government.......
Govt must take the lead; RBI alone can’t take us back on growth track
........While the merit of RBI measures is well appreciated, it is critical to focus on bolstering growth through a revival in investment climate as improved fundamentals alone would enable us to attract durable capital flows. As such, government needs to further step up its efforts to clear hurdles impeding stalled projects..........
RBI in prisoner's dilemma in FX/rupee; NRI bonds way out?
.........Sen Gupta is of the view that the RBI needs to urgently buy forex to boost its import cover (measured as the number of months of imports foreign reserves could pay for), which right now down to roughly 7 months; below the optimal range 8-10 months. The trouble is that buying dollars would strengthen the US currency and further weaken the rupee. Yet Sen Gupta feels the rupee is unlikely to stabilize till RBI bolsters its FX reserve...........
RBI Governor D Subbarao says no rollback timeframe for liquidity steps
........Explaining the rationale for the July 15 and 23 measures to tighten liquidity, the Governor said, "Forex intervention is a standard tool for defending against volatility. As much as we resorted to that instrument, we were also conscious that we should not fuel speculation or help speculators." Subbarao said the idea was to make liquidity scarcer and more costly. The RBI determined that modulating access to LAF would be the most efficient way of controlling volatility and it can be calibrated more flexibly than resorting to CRR or repo because of other implications attached to those measures, he said.........
Govt promises 'specific steps' in coming weeks to contain current account deficit
............"We welcome the RBI policy statement...the RBI and the government are on the same page and working together to achieve stability and growth," Rajan said while responding to the RBI's decision to maintain key interest rates...........
US Fed will dictate India’s monetary policy
.....But that’s no assurance for RBI. Which is why the policy stance in this review is “guided by the need for continuous vigil and preparedness to proactively respond to risks to the economy from external developments, especially those stemming from global financial markets”. In its order of priorities, what has dropped lower down the list are concern about slowing growth and inflation that could rise because of the depreciation of the local currency. Its priority No. 1 is addressing the risks to macroeconomic stability from external shocks. Risk to growth comes second and the re-emergence of inflation pressures, third. Interestingly, managing liquidity conditions to make sure that the flow of credit remains intact to the productive sectors of the economy is the central bank’s last priority........
Rajan hints at specific steps to contain CAD
...............In a statement here, Dr. Rajan maintained that the government would announce “specific measures in the next few weeks” to contain the widening current account deficit (CAD) which has put pressure on the Indian currency and once the rupee is stabilised, the policy-makers will have room for more growth-friendly measures. “We have already taken some steps on liberalising FDI [foreign direct investment]. We are also exploring some other options for stably and sustainably funding the CAD. We will announce specific measures in the next few weeks,” he said.................
Rapid rupee depreciation has put us in vicious spiral: Subbarao
Reserve Bank of India’s Governor D Subbarao explains the reasons for the recent liquidity tightening measures at the post policy press conference and explains the central bank’s strategy on the exchange rate: Excerpts:...............
RBI’s foot is still on brake pedal
..........Further, the guidance provided by the RBI — that monetary policy focus would revert to supporting growth only after calibrated rollback of the recent liquidity measures as stability is restored in the foreign exchange market — is likely to keep interest rates sticky at elevated levels, which would weigh upon consumption and investment decisions. Accordingly, we anticipate that the RBI will ease its stance in the second half of the fiscal.............
Insulating the economy
.........But the lack of quantifiable objectives is only one part. Curbing exchange rate volatility should not by itself be the central focus of the RBI’s policy, considering the real structural reasons underpinning such volatility. These have to do with unsustainably large current account deficits (CAD) and slowing growth making it difficult to attract the capital flows necessary to finance these. Without CAD levels coming down and growth recovering, the Indian economy will continue to be vulnerable to external shocks. .........
Predictable, but challenging
............While not being in a hurry to loosen its policy, the RBI has given an assurance that with the right conditions prevailing, monetary policy will revert to supporting growth while maintaining a vigil on inflation. That, unfortunately, seems far away as the rupee quite unexpectedly tanked again on Tuesday. The authorities have been quick to blame speculation but only the next weeks will show whether it is a one-off development or the beginning of a new period of stress for the rupee..........
Read - The Hindu
Moderating growth outlook by RBI worries India Inc
......“We understand the decision of the RBI on the rates. We draw heart from the statement of the RBI saying that had it not been for the volatility, the rates could have been reduced, since inflation has started to moderate. We see this as a softening of stance by the RBI,” Confederation of Indian Industry (CII) President Kris Gopalakrishnan said................
No need for IMF loan: RBI Guv Subbarao
Reserve Bank Governor D Subbarao today said India's current economic situation does not warrant any move to seek loans from the International Monetary Fund. "The answer is no! I don't believe that we are in a situation where we have to go to the IMF. We are fairly resilient," Subbarao told reporters at the customary post-policy media briefing............
Read........
A feeling of helplessness
.......The problem, for Mr Subbarao and India’s fiscal managers in New Delhi’s North Block, is to attract more foreign direct investment (FDI), which is always more welcome than portfolio investment. Yet, don’t expect a flood of dollars to gush in immediately despite the recent policy overhaul.............
Waiting for Godot: Will RBI’s wait for a stable rupee be endless?
............India’s structural issues are not going to be addressed overnight. Global markets will move to the Fed’s tunes. RBI will be waiting for the INR to stabilize before acting to support growth. How long for the INR to stabilize? Hopefully it is not Godot!!
RBI shoulders arms: Sajjid Chinoy
.........If the game plan is to induce behavioural changes in the market, an element of constructive ambiguity is critical. If RBI were to set a date for withdrawal or lay out a specific criterion, the economic agents it is trying to influence will simply wait it out in anticipation. But RBI's inability to provide a timeline for exit has further fuelled the debate on the efficacy of the tightening measures. 'Are there measures working?' runs the exasperated refrain........
Painted into a corner
........In the RBI's thinking, as reflected in its policy review statement, the recent rupee depreciation significantly exacerbates inflation risks, thus shifting the policy priority back to inflation containment and away from growth, which had been the direction taken over the past few months. In this sense, even though the measures taken were rationalised as being aimed at controlling the slide in the rupee, they can also be seen as conventional monetary tightening, justified by the inflationary consequences of depreciation..............
India sputtering
The latest monetary policy statements by the Reserve Bank of India (RBI) clearly show that its biggest concern right now is whether there will be adequate capital flows to finance the current account deficit, at a time when global financial markets are rattled by the prospect of the US rolling back its extraordinary monetary stimulus..........
Why RBI governor is right in keeping a tight leash on interest rates
..........Interest rates are a loaded pack and needs careful handling and deliberation. Importantly, it would be a positive step forward if the Reserve Bank of India and the ministry of finance begin to make greater disclosures about their policies and actions and, more importantly, reasons underpinning the policies. The cloak of secrecy that surrounds the financial system is opposed to the values of transparency and accountability that are essential to democracy. The need for openness has never been greater.
Anyone here for the Rs?
................More curious is the reply given in the Governor’s press conference—not by the Governor though—on a question on the overseas NDF markets. If NDF markets feel the rupee needs to fall further given the fundamentals, the question was, how will curtailing local currency trading help? It is difficult to go along with RBI’s view that the local market determines what happens in the NDF markets since the latter are several times larger. In any case,...........
Mint Road’s white flag in war for Rs seen as sign of weakness
..........“One thing we are trying to do in the currency futures market, there is a lot of position-taking which we have curtailed and by month-end, this would reduce hopefully. If not, further measures would be taken. There is a connect between NDF market and the futures market,” said H R Khan, Deputy Governor, RBI. The Governor, however reiterated that the central bank was not trying to defend any level on the rupee which remains vulnerable due to the high current account deficit and the possibility of a reversal in capital flows due to the possible tapering of the US Federal Reserve’s quantitative easing programme...............
Rakhi losing its golden sheen
LUDHIANA: While the bond between siblings does not really depend on material tokens, one cannot help the excitement of receiving Raksha Bandhan gifts. For decades, gold coins in a velvety backdrop have dazzled sisters and warmed their hearts. The yellow metal has assured them of security in turbulent times. But now that the Reserve Bank of India has banned the sale of gold coins, people would need to make slight adjustments in the customs............
Do’s & Don’ts before you print and submit ITR V
You must be aware of the fact that return filing process gets completed only when you send ITR-V copy to CPC office. Let’s understand the last and the most important process to complete your tax filing:..............
Haj funds illegally deposited in Karnataka's bank
............... Despite committee deciding to transfer the Rs 2.29 crore to Union bank of India on March 1, 2012, the executive officer went ahead keeping the amount in Amanath Bank as savings in May 2012. However, Rs 2 crore was converted as fixed deposit for a period of three months in December 2012," the minister said. Islam said of late Amanath Bank has come under Reserve Bank of India, therefore deposits cannot be withdrawn immediately. The minister also assured the House that he would write to department of personal and administrative reforms ( DPAR) to initiate action against an officer for illegally depositing money..........
Tuesday, July 30, 2013
Evaluating Subbarao
.........And when the current account deficit (CAD) was looking problematic, Subbarao even gave a speech at the London School of Economics’ IG Patel lecture in March arguing that those advocating interest rate hikes to fix the CAD were wrong since lower interest rates would actually encourage equity investors even while dissuading investors in debt. That is clearly a view the Governor jettisoned very soon. It is never possible to answer a debate in the absence of counterfactuals—would lower interest rates have spurred investments while various government clearances continued to dog them?................
RBI’s Russian Roulette
...........So, what has RBI achieved? At best a temporary reprieve for the besieged rupee? Engineering a liquidity crunch is hardly the advisable remedy to break out of this siege. The costs can be just too high in terms of lost growth, severe dampening of investment sentiments, killing off the animal spirits and making our exports less competitive.............
Bankers, officials hail financial inclusion work in Madhya Pradesh
.........“Madhya Pradesh is the only State in the country where there is perfect coordination between the Reserve Bank of India, the State Government and other agencies concerned,”..................
RTI Judgement Series: Bank PIO fined Rs 17,000 for not complying with CIC order
...........Since no reasonable cause has been offered for the delay of 68 days in providing the information to the Appellant as per the order of the CIC, the Bench is imposing the penalty on Mrs Mugdha Satarkar, PIO & AGM (Vig) under Section 20(1) of the RTI Act at the rate of Rs250 per day of delay of 68 days that comes to Rs17,000," ..............
Check before you express
RE: WHITHER R B I 'S CULTURE ?
| Subramaniam, Uma |
| Sent: | Monday, July 29, 2013 5:30 PM |
| To: |
Ramachandran P.P
[pprchandru@gmail.com]
|
Dear
Sir
The
College is dismayed by your remarks on the blog. We wish you had checked the
facts with us before sending them into the blogging space. It is not correct to
state that the College did not issue an invite to Ms Thyagarajan. Not only was
the invitation mailed to her, one of our Jubilee co-ordinators Shri M
Subramaniam who is also Member of Faculty rang her up a day before the event for
making the necessary logistical arrangements for car pick up etc. which was
politely declined by her on health grounds. Further, she
was personally delivered a copy of the Souvenir at residence. We trust our
clarification will also be published in the blog.
Regards
Uma
Subramaniam
Chief General Manager and Principal
Chief General Manager and Principal
RBSC, Chennai
This is the factual feedback received from the Principal, RBSC in response to info item given by P.P.Ramachandran, DGM (Retired) titled 'Tired' on appraoch towards 'Retired'...............
An insider’s view of reforms
.........The RBI Governor Subbarao (chapter 10) raises what he terms “policy challenges from the New Trilemma.” He has often emphasised the need for the RBI and the government to share responsibility, especially in relation to the impact of fiscal deficits and to ensure fiscal stability. He feels that unless the respective roles are defined, these could impact adversely the independence and accountability of the RBI. The situation could get worse if debt market operations are shifted from the RBI to the Finance Ministry. It is a retrograde step and puts the clock back.................
Obituary
Shri P.A.SIVALINGAM, former Personal Secretary to RD, RBI, Chennai passed away at 3.00 a.m. on 29-7-2013. He was one
of the members who were honoured by the Forum of Retd. Employees of RBI last Saturday
on their attaining the age of 70 years. We pray for his soul to be rest in
peace and convey our heartfelt condolences to the bereaved family.
-
SMALL COINS DISTRIBUTED
Officials of the State Bank of India, main branch, distributed small coins to the tune of Rs. 2 lakh to about 300 people at Poorna Market on Sunday. Following RBI guidelines to help the common customer overcome shortage of small coins the bank had taken up such activity on a regular basis,...........
RBI eases curbs on payment gateways
........The rationale for its initial strict regulations, according to the RBI, was that several service providers had allowed exporters to retain the export proceeds abroad without repatriation, resulting in violation of the provisions of the Foreign Exchange Management Act (FEMA) 1999. “Online payment gateway service providers have been finding it easier over the last few years, with the RBI easing up on some of its earlier regulations. If all goes well, PayPal may soon be allowed to resume its Indian operations as well,”...........
RBI warns NBFC on unsolicited calls
............This is the second time that a notice has been issued to the NBFCs by the RBI on the same subject. The entities were advised to employ only those sales agencies or call centres which have been registered as telemarketers with the department of telecommunication (DoT), as per the regulations of the telecom regulatory authority of India (TRAI) issued 2007 for the job of soliciting or promoting any commercial transactions.............
Card volume expands in India despite significant unbanked population
.........“As India continues to expand and upgrade its telecommunications infrastructure to rural areas, more Indian consumers will have access to secure and reliable electronic payments and financial services via a mobile phone– a critical step in the migration from cash to more convenient, secure forms of payment,” ............
UIDAI, banks disagree on use of biometric authentication at ATMs
..........It's learnt that the UIDAI nominee on the panel is likely to issue a dissent note on the estimates the agency believes is significantly higher than what banks' migration to Aadhaar would cost. About a fortnight ago, the findings of the report were shared by Pulak Kumar Sinha, the SBI general manager who heads the panel, at a luncheon meeting with RBI Deputy Governor H R Khan. Other members of the working group were also present at the meeting..........
Will chip-based credit cards really work?
.....Banks will have to convert all credit card customers on the new system. The best part is that since the regulator has made it mandatory for banks to issue chip-based cards, most banks will not charge you a fee for the same. Since chip-based cards are more expensive than the magnetic strip-based cards, some banks may pass a nominal fee to the customers............
Graduation day
...........The financial inclusion trend from the Reserve Bank of India and the present decade witnessing superannuation in banking sector have given rise to six lakh vacancies in banking sector from now till 2020, Mr. Sundara Rajan added................
Unruly rally disrupts road traffic
............s per permission granted by city police's special branch, Swabhimani Republican Party was allowed to take the rally from Janata Chowk to RBI Square at 12 noon. However, sources in city's traffic police said the police had expected about 500 people in the rally but over 5,000 turned up. Things became worse when the rally lost order and its participants spread to both sides of the road from Janata Chowk to RBI square..............
The Taylor Rule and interest rates in India
In the run up to 30 July monetary policy review by the Reserve Bank of India (RBI), opinions regarding the stance of the central bank have tended to focus on benchmarks based on the Taylor Rule—an interest rate feedback rule of how central banks should set short-term interest rates as economic conditions change to meet the goals of economic stability together with desired inflation rate. The rule states that............
SBI chief predicts RBI would raise repo rate
.........Chaudhuri's views contradicts 31 of 32 analysts in a Bloomberg News survey who predicted no change to the benchmark rate, while 29 of 30 expects the CRR to remain unchanged at four per cent. The decision is due at 11 am on Tuesday..............
Not My Baby, Says the RBI; It is Right
The
Reserve Bank of India (RBI) has given clear indication that monetary
policy has to remain cautious in the face of financial risk, unbridled
consumer price inflation and a still-high current account deficit (CAD).
While the RBI might stoop to administer emergency CPR to the economy
gasping for breath, it would prefer to leave treatment for sustained
recovery to the government. In its review of macroeconomic and monetary
developments, the RBI makes it very clear that structural reforms to
contain the CAD and fiscal adjustment to prune subsidies and step up
investment are what the economy requires, and these depend on government
action.................
Read - ET
Read - ET
Recent liquidity steps 'at best' breathing time: RBI
The Reserve Bank of India (RBI) has sounded a hawkish note on the eve of the monetary policy review by saying the recent currency depreciation has posed upside risked to both wholesale and consumer price inflation. In the Macroeconomic and Monetary Development report released today the central bank said it will actively manage liquidity to reinforce monetary transmission that is consistent with growth-inflation balance.....................
RBI's emergency medicine: What does history tell us?
There are differences between now and 1997-98, but sufficient similarities too for us to draw lessons from the past, about the recent RBI’s policies to strengthen the rupee. RBI's goal could be to reduce volatility, and not set a level for the rupee; it would provide the time needed for the economy to adjust to the weaker rupee,...........
Subbarao's win against inflation is growth's loss
.............Subbarao will surely say achieving any result from a monetary policy in an integrated global world today is easier said than done..................
Chidambaram says price stability cannot be the only mandate of RBI
............."All over the world thinking in changing. The mandate of a central bank must not only be price stability. The mandate of central bank must be seen as part of larger mandate which includes price stability, growth and maximising employment,"............
Measures to stabilise rupee must not hit growth: Rajan
Hours after the Reserve Bank of India said that stabilising the battered rupee is its priority, Chief Economic Adviser to Finance Ministry Raghuram Rajan said the RBI’s action in this regard must not hurt growth too much....................
Ab tak 56 & return of decoupling
...........This bolstered the minister's vocal push for a hand of support for growth from the Reserve Bank of India (RBI) by cutting rates. Though RBI resisted initially, it finally had to give way. The minister also took steps to attack speculative investments in gold and real estate, often targets of the Street for its own woes. Empowering Sebi to attack ponzis was another key move............
Right about the rupee
......What the RBI needs to understand is that without correcting the unprecedented galloping inflation, it cannot successfully correct depreciation of the rupee.................
Focus On Re, Growth A Liability
.........."The priority for monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth. (However) this strategy will succeed only if reinforced by structural reforms to reduce the CAD and step up savings and investment,"..............
Only Reforms Can Put Economy on Track: RBI
The
effect of the Reserve Bank’s recent interest rate increase and
liquidity tightening to bolster the rupee will fizzle out if the
government does not move to reduce external trade imbalances, a central
bank policy review says. It will be a hard road to economic recovery
as business confidence is low, and rising global interest rates may
throw the financial markets out of gear, says the June quarter
Macroeconomic and Monetary Developments review by RBI...........
Central Bank Can’t Afford to Frighten Equity Investors
......Those
were also the days when the government could privately place bonds with
RBI and keep its borrowing cost well below market rates. Not any more;
today, the market will demand a competitive rate from the government
similar to what it would charge any other borrower..........
Read - ET
Silver linings amid economic gloom: JP Morgan’s Morparia
....... In an interview on Thursday, she said the recent reforms initiated by the government will continue till the elections because policymakers have shown a rare resolve to address growth and investments. Morparia also touched on issues ranging from the Reserve Bank of India’s recent policy measures to support the rupee, to J.P. Morgan’s plans for India. Edited excerpts:................
Empowering SEBI the right way
..........The Centre’s expectation is that a suitably empowered regulator would nip such financial misadventures in the bud. That might still be a tall order given that most recent scams have thrived by exploiting differences in the regulatory jurisdictions of SEBI and the RBI. The Indian financial code which has been drafted to address inter-regulatory issues has not found universal acceptance and will take time before it is adopted...........
Burden of gold
In recent times, especially in the light of a widening current account deficit, Indians' obsession for gold has come under fire from various quarters. The government and the Reserve Bank of India have taken measures to clamp on this. A look at the frustration of earlier policy makers in this regard:............
Rana Kapoor wants rates unchanged
It could well be one of the most critical monetary review policies by the Reserve Bank of India (RBI) on Tuesday as companies and industry bodies wait anxiously for the apex bank’s directives. Rana Kapoor, managing director and chief executive officer Yes Bank and president of Assocham, said a status quo on policy rates would be a positive message by the RBI indicating that lending rates would ease in the near future and the recent measures undertaken by it were only aimed at the currency market.............
YES Bank can’t be family business: Rana Kapoor
YES Bank chairman and co-founder Rana Kapoor recently saw the denial of board seat to his niece snowball into a controversy. But Kapoor, who has donned the hat of industry chamber Assocham’s president, tells TOI that the bank he cofounded with his brother-in-law Ashok Kapur can’t be run as a family business and his children will stay away. Excerpts: ........
Read - TOI
Read - TOI
Monday, July 29, 2013
We are paying dearly for ignoring savers - Dr.S.S.Tarapore
........The government should give ‘ closed door’ guidance to the RBI to use all its instruments, without constraints, to ensure that the Consumer Price Index ( CPI) inflation comes down from 10 per cent to 5 per cent by early 2014. Again, the RBI needs to be assured that it need not expend its forex reserves in defence of a particular exchange rate. Furthermore, it should not shore up the rupee on the pretext that it is controlling volatility. It needs to be recognised that a massive outflow of capital from the EMEs is inevitable in the next 9- 12 months and India should conserve its forex reserves. What is important is that the topmost policy decision- takers should silence their guns attacking RBI policies. When the RBI took measures on July 15, 2013, the government immediately said that this did not portend monetary tightening!................
From where did poverty go? - Dr.Subir Gokarn
.......Before getting into the numbers, I want to address two misconceptions that have made their appearance in the public debate. First, many people seem to believe that the reason why the poverty rate is what is because the bar - the poverty line - has been set so low. Of course, the level of the poverty line is subjective and a country can decide for itself where to set it. Different lines would obviously generate different poverty rates. However, in measuring the change in poverty over time,...........
Poor in US, rich in India
The media is accused of creating a controversy out of nothing by asking tough questions to policymakers and then quoting them selectively. A similar attempt was made with RBI Deputy Governor KC Chakrabarty. Asked whether the new poverty line was fair when inflation was running high, Chakrabarty cleverly dodged the question saying it was a relative measure. “Someone can be poor in the US but rich in India,” he said knowing full well that few journalists would understand the concept of purchasing power parity and its relevance in poverty measurement.
Usha Sangwan to Become LIC’s First Woman MD
Usha
Sangwan, the 54-year old insurer, will be the first woman managing
director at the Life Insurance Corporation of India in its near six
decades of existence. She may well be a trendsetter at LIC, like Kishori
Udeshi at the RBI, who started a glorious tradition of women rising to
higher positions that for decades have been male bastions. The
government is set to name Sangwan as the fourth managing director at the
country’s largest financial institution. She is currently executive
director, communications............
Read - ET
'Banks have deployed 1.95 lakh biz correspondents till Mar 13'
.........."The BC model allows banks to do cash in-cash out transactions at a location much closer to the rural population, thus addressing the last mile problem. "As on March 31 2013, banks have reported deploying 1,95,380 BCs which covered 2,21,341 villages," Reserve Bank Executive Director Deepali Pant Joshi said recently in a seminar.................
4 reasons why Governor Subbarao must be given an extension
........It's clear that an experienced hand at RBI is need of the hour as India is passing through tumultuous times on the economic front. Perhaps, Governor Subbarao's extension would be the right decision to make.
Read.......
Meaningless comparison among the RBI Governors since 1990 - Dr.T.V.Gopalakrishnan
The comparison among Governors’ is meaningless as the performance is linked to the political climate and support in the Governance system, sound economic policies and conducive external sector environment. All these are found missing during the last five years when Dr Subbarao took over in the year 2008.The present RBI Governor's period is something unique in the history of RBI...................
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