Run, Mumbai, Run...

Reserve Bank of India Governor D.Subbarao was seen running during the Standard Chartered Mumbai Marathon 2013 Dream Run in Mumbai on Sunday

Not only runners from India, but people from all over the world reached Mumbai to participate in 10th Standard Chartered Mumbai Marathon 2013 Dream Run today. Thousands of the city's residents too ran alongside athletes. Well-known personalities like RBI Governor D.Subbarao, Anil Dhirubhai Ambani Enterprises group Chairman Anil Ambani, BSE Chairman S. Ramadorai, JSW Steel Ltd Chairman & Managing Director Sajjan Jindal and many more were also seen running at the marathon. Binning Lyngkhoi was the best Indian finisher among men while Lalita Babar successfully defended her title in the women’s section in the marathon.

HBL

Bid to limit RBI role as debt handler

..... the RBI feels bringing debt management under a government agency may lead to a conflict of interest where the Centre will be both a debt manager as well as the owner of a substantial portion of the banking sector. Besides, it may not be appropriate for a central government authority to take over debt management for the state governments. Officials said these issues would be taken up with the RBI and could be resolved by not only continuing to involve the RBI in the debt management agency but also by keeping it at an arm’s length from the government just as the RBI is kept......

Read - The Telegraph

Regulation confusion

.........The second problem with the RBI has to do with conflicts of interest. The RBI regulates banks, so it has a bias in favour of keeping interest rates low in order to hide the problems in banking, which leads to high inflation. The RBI is investment banker to the government, so it has a bias in favour of keeping interest rates low in order to easily hawk government bonds (which, too, leads to high inflation). There are several other functions, all clashing with each other. The incoherence of policy and communication at the RBI is often attributed to staff quality. It may reflect, instead, the impossibility of achieving the array of objectives that are sought to be addressed. The RBI Act was drafted in 1934 as a temporary measure. The RBI is now nearly 80 years old. It may be time to rewrite the RBI Act...........

Read - IE

'Cash transfer more efficient than PDS' is efficient way for extending food subsidy'

.....Earlier, in his welcome remarks, Subba Rao said the central banks need to identify and monitor poverty to have a better understanding of the poor and to work on various welfare schemes. "For the last five years, the RBI has been working on financial inclusion on a priority basis. However, we must remember that financial inclusion is not the end in itself, but is a means to have household welfare schemes," he added. Subba Rao said, "The RBI's interest in poverty is mainly because of the inflation that impacts different segments of people differently. For instance, the lower segment of society is more concerned about the food inflation. All of us are working on poverty measurement for framing government policies."

Read - TOI

The plight of the poor in India - Dr.T.V.Gopalakrishnan

Perhaps Dr Subba Rao GOVERNOR, RBI is the only official who has understood the magnitude of poverty and suffering of the masses in these days of Spiraling inflation..........

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Need to improve understanding of poor and poverty: Subbarao

............Subbarao praised late economist Suresh Tendulkar's study of poverty and estimation of people below poverty line (BPL) which displayed his "sensitivity and empiricism" on the issue.  Noted economist Abhijit Banerjee, currently Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology, delivered the lecture on the topic, 'Identifying the Poor'.

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कॉसमॉस बॅंकेची आता इंटरनेट बॅंकिंग सुविधा

Subbarao Won’t Go the Whole Hog: Economists

 

Read - ET

RBI Governor D. Subbarao’s visit flags off the 26th edition of IIM Lucknow’s Manfest

...........Delivering his presentation in a hall packed with eager students, Dr. Subbarao joked about how he enjoyed speaking to students the most since “they are too innocent to ask difficult questions”. He spoke at length about policy dilemmas from the perspective of the Reserve Bank of India. He also shared key insights on various tactics for managing growth inflation dynamics, current monetary variables and their implication on Indian growth............

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Obituary

Sushil Jayant Chitre, Ex Cashier - Reserve Bank Credit Co-op. Society, Mumbai passed away on 17th January 2013.  Deeply Mourned by Anil Chitre, Chitre & Joshi Family

Nigerian held in Delhi for fake lottery racket

New Delhi, Jan 20 (IANS) A 36-year-old Nigerian was arrested here for duping a woman of lakhs of rupees after claiming that she had won a lottery “organised” by the Reserve Bank of India (RBI), said police Sunday...........

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My View on "Govt has taken revenge on RBI, says CLSA"

CLSA is not alone in having the view that Gokarn was eased out by a ‘hurt’ finance ministry, as it could do no harm to RBI Governor directly. Business India(January 20, 2013) in its editorial ‘Muscling in’ has argued that it should be for the board of the Reserve Bank of India to pick its Governors and not the finance ministry. The recent teasing behavior by GOI is a shame on the eminent statesmen(each one of them being a leader in their field) who are on RBI’s Central Board. The institution and Governor Dr Subbarao look unperturbed. Urjit Patel, the new Deputy Governor is not going to unsettle the extant RBI policy evolved over time. Still, one wonders what make the central board members cling on despite continuing insults by a ministry with tacit approval from the highest level. The only way GOI can make amends now is by ensuring a further term of 2 to 3 years for Dr Subbarao by deviating from the tradition and making provisions where necessary

- M G Warrier

Be cautious, no need to change stance on bank licence

.............Do all these mean RBI should not give any importance to the IMF report? Definitely not. One way of ensuring good governance could be giving precedence to companies with a wide shareholder base over family-run firms in setting up banks. RBI has been a conservative regulator. Even in the first set of new banks given licence in 1994, one corporate entity entered the sector in the guise of a group of non-resident Indian investors belonging to a particular community, but a vigilant central bank did not allow the promoter to misuse it. It should take heart from this.

Read - Mint

NPAs a tough ask

Bad loans or non-performing assets (NPAs) in the banking sector have been steadily increasing, and bankers are, understandably, not happy at being constantly questioned on the issue. Recently, on the sidelines of an event, an irate Union Bank of India Chairman and Managing Director D Sarkar said, “Do not blame the banker by saying they are increasing NPAs. We, too, are very much under stress. Except my family members, everyone else is asking me about NPAs.”

BS

Banking system shows signs of instability on rising NPAs: RBI

........"The movements in the banking stability indicator...that there are symptoms of a moderate rise in instability of the banking sector in recent periods perhaps due to the rise in the NPA," it said in a working paper on Banking Stability - A Precursor to Financial Stability.........

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Finance Ministry wants RBI to allow realty, broking firms to set up banks

............In its comments to the RBI on new bank licences, the ministry has said that such entities can be allowed, but there should be a complete ban on taking exposure in the group companies or entities related to promoters, sources said.................

Read - HBL

Amalgamation of RRBs: 25 merged into 10 in nine months

..............Consolidation of RRBs has been going on in a phased manner since 2005. The number of RRBs came down to 133 in 2006 from 196 at the end of March 2005. It further came down to 105 and subsequently to 82 at the end of March 2012. As on March 2012, of the total RRBs, 79 were profit- making while the remaining three had registered losses. In order to boost the capital base of RRBs, the government on the recommendation of a panel headed by RBI Deputy Governor K C Chakrabarty decided to recapitalise 40 selected RRBs in 21 states............

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Gold cliff: Wisdom dawns on RBI

........Tarapore Committee on capital account convertibility also recommended in 1997 that it was essential to liberalise the import of gold. WTO did not ask us to liberalise the import of gold. Even the IMF, which was a strong advocate of full convertibility, chastened by empirical experience, started to soft- pedal the issue. But those were the heady days of market theology in India. Even when gold imports were modest, at about $ 5 billion, I had warned that liberalizing gold imports was a blunder and alas, the warning has proved to be prophetic. A poor country, which continues to be the abode of the largest number of underfed and undernourished persons in the world, cannot afford to definancialise and invest enormous unproductive asset like gold. At long last, wisdom has dawned on the RBI. If left unchecked, gold imports would play havoc with the economy, disrupting growth. Dr. K. U. B. Rao, chairman of the RBI Working Group, should be congratulated on assembling a mass of data on related issues and providing an excellent analysis of the issues involved. I am sure the report will remain as the standard reference work on gold for years to come........

Read - FPJ

Golden ideas for senior citizens

.....The connection between bank deposits on which most senior citizens depend exclusively for their livelihood and gold investments may seem far-fetched. After all, senior citizens can hardly be expected to hold or buy gold to hedge against inflation. Even the gold-backed deposit schemes, which are likely to be introduced, will hold no specific attraction to the pensioners and others solely dependent on interest from bank deposits. Yet, tackling this very basic need of senior citizens — to have schemes that are hassle free and protect them from inflation — is on a par with efforts to wean away gold demand. Unless a scheme is created that will effectively and consistently be able to beat inflation and equally importantly convince ordinary citizens that it will be able to do so over time, it has no chance of succeeding in the race against gold. The senior citizens as a class may not patronise gold but certainly have a stake in any policy measure that will give them an opportunity to keep their head above water...........

Read - The Hindu

A Golden Moment

..........The Reserve Bank of India (RBI) is looking to allow banks to open basic gilt or demat accounts for limited transactions and a certain amount of holdings, with reduced charges for retail investors in G-Secs. It may even consider giving banks incentives for opening these accounts. There are three key reasons why the RBI thinks it’s a winning proposition: one, it allows investment across the yield curve, from 91-day Treasury Bills to G-Secs with a 30-year tenure; two, given the inverse relationship between bond prices and interest rates, one can ride on the prospect of capital gains when interest rates moderate; and three, from the government’s perspective, a diversified investor base ensures stable demand for G-Secs. Will it work? “On paper, it is a great idea, but............

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Renting a bank locker isn't easy

...........According to RBI guidelines, demanding a deposit or levying insurance charges to rent out a locker is a restrictive trade practice. And new customers (only new ones) can complain to the apex bank and the head office of the bank where one applied for a locker. The regulator also says banks should maintain a wait list of applicants for lockers, give them a number and ensure complete transparency in the allotment of lockers. However, experts say while banks will try and squash the charges, RBI’s redressal system can be frustratingly slow.

Read - BS

The politics of good economics

.....The RBI will announce its quarterly monetary policy later this month but it will be interesting to note how it views the diesel price adjustment. Will it be seen as a step towards fiscal consolidation (and hence add to the argument for cutting rates) or will it be seen as an inflationary move (and hence work against a rate cut)?......

Read - The Hindu

Poultry industry in State in deep crisis

....The AP Poultry Federation held meetings with Union Finance Minister P. Chidambaram, RBI Governor Duvvuri Subba Rao and Food and Agriculture Minister Sharad Pawar seeking their intervention in recovery of the sector and enhancing working capital limits as there was serious erosion in the amount employed. They also wanted the government to regulate exports and essential ingredients and freeze them at a certain limit.

Read - The Hindu