.......“It
is pertinent to note that stagflationary tendencies have already reared
their head in emerging markets, like India, where financial
intermediation was never a problem,” Rangarajan says in a paper titled
Growth or Austerity: The Policy Dilemma’ co-authored with Alok Sheel.
The assessment brings to fore the monetary policy challenges for RBI,
which is facing demands for lower interest rates despite strong
inflationary expectations.............
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, March 13, 2013
Rangarajan’s declaration of Stagflation Is Red Flag
For a policy-maker to declare that `stagflation’ is
crippling economic performance is like a doctor telling relatives that
the patient in the intensive care unit `may die’ instead of the clichéd
`stable but critical.’ Neither of them does. But C. Rangarajan,
Chairman of the Prime Minister’s Economic Advisory Council, and a former
governor of the Reserve Bank of India just violated that and in the
process highlighted how vulnerable the Indian economy is..........
Moneylife Foundation demands scrapping of the move to penalise usage of cheques
Moneylife Foundation, as the voice of 21,500 savers, has sent a memorandum to the RBI, pointing out why this move is premature, ill-conceived, impractical and hugely detrimental to the interests of consumers.........
Read - Moneylife
Now, penalty for paying credit card dues by cheque!
..... The finance ministry's fatwa makes a mockery of the RBI's pretence that it is an independent regulator of banks, because the government has not even bothered to refer this issue to the central bank before issuing orders on what amounts to micro-management of bank charges. RBI Deputy Governor Dr K C Chakrabarty has repeatedly exhorted customers to vote with their feet and move to another bank if they dislike the high costs and charges of foreign and private banks. It now appears that the finance ministry will forcefully intervene to ensure that they do not have PSBs to turn to...........
Experts critical of gold bank proposal, say it won’t curb imports
A proposal by a Reserve Bank of India (RBI) panel to create an exclusive gold bank for tapping the idle stock of the precious metal has been received with scepticism by some economists and experts. The panel headed by K.U.B. Rao, an adviser to RBI’s Department of Economic and Policy Research, proposed on 6 February that the central bank set up the Bullion Corporation of India (BCI), which would undertake all wholesale gold transactions. The Indian central bank is examining the proposal and may take a call on this in the next few months, said a person familiar with the development on condition of anonymity............
Obituary
Mr. S. Ramanathan, Retd. Asst. Manager, RBI, Chennai passed away on 09.03.2013. Dasasthu on 18.03.2013 at Chennai. No.8, 1st Main Road, Chandrasekarapuram, Ambattur, Chennai – 53. Phone: 044-2657 4166.
Hindu
RBI and Retired Employees - Dr.T.V.Gopalakrishnan
......Today’s position is that the Retirees cannot openly disclose their pension to even their own relatives to maintain the prestige of the RBI. The moment one tells the amount they look down upon and have a contemptuous feeling........
This comment I gave in response to the write up My view - the age old problem by Mr Parab appeared in VITALINFO.
Read........
This comment I gave in response to the write up My view - the age old problem by Mr Parab appeared in VITALINFO.
Read........
Public sector banks open 11,887 branches,recruit over 1.72 lakh in last 3 FYs
....Public sector banks (PSBs) opened 3,719 branches in 2009-10; 3,506 branches in 2010-11; and 4,662 branches in 2011-12, Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha today. The branches were opened in areas such as rural, urban, semi-urban and metropolitan areas. As many as 25 PSBs in new bank branches recruited 58,900 personnel in 2009-10, 57,758 persons in 2010-11 and 55,632 personnel were recruited in 2011-12, Meena said.........
RBI receives 27 complaints of financial fraud from Assam
NEW DELHI, March 12: As many as 27 complaints of alleged financial fraud were received from across Assam by the Reserve Bank of India (RBI) during the financial year 2012–13, Union Finance Minister P Chidambaram informed the Rajya Sabha on Tuesday.......
Two chit fund cos duping Assam investors
.......The RBI has reported that no non banking financial company registered with it has been observed to be flouting any guidelines of the RBI in Assam. However, Guwahati Regional Office of RBI has received complaints that certain entities are accepting money through various schemes such as booking of plots, booking of holiday packages, issuing non-convertible debentures and redeemable preference shares to the public alluring them with high returns, the Union Finance Minister said................
Govt to launch Rs 10 plastic notes in 5 cities
........“It has been decided by the government and the RBI (Reserve Bank of India) to introduce one billion pieces of Rs 10 notes in polymer/plastic on a field trial basis,” Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha. The minister said the field trail will be conducted in five cities — Kochi, Mysore, Jaipur, Bhubhaneswar and Shimla with varied geographical locations and climatic conditions..........
Fake currency siezed in Assam
A Bangladeshi national was today nabbed by the BSF in Dhubri district and fake Indian currency with a face value of Rs 2.98 lakh was seized from his possession. During a special operation by the BSF,......
Maximum fake currency seized from Pakistan border: Govt
Maximum seizure of fake currency notes with a face value of over Rs 2.64 crore was made from the India-Pakistan frontier compared to other land borders between 2010 and February this year, the Lok Sabha was informed today...............
CorpBank evolves new business model for Kerala region
........He pointed out that the recent shift in gold loan business from NBFCs to public and private sector banks following RBI guidelines has thrown open more opportunities for banks in gold loans, especially in Kerala. The total disbursement of gold loan business throughout the country by the Corporation Bank was Rs 4,000 crore. Of this, it had disbursed Rs 636 crore in Kerala this year so far against Rs 365 crore in the previous year. In the retail loan segment, he said, the bank is expecting a growth rate of 30 per cent in the next fiscal with a focus on home loans, loans to doctors, traders etc...........
Rs 71 cr State package for co-op banks’ rehab
Mumbai : The State has sanctioned Rs 71 crore for the rehabilitation of two district co-operative banks which were stripped of their banking licences by the Reserve Bank of India (RBI) due to mismanagement. Jalna and Dhule-Nandurbar District Central Cooperative banks – both of these banks are controlled by NCP and this amount may help them to get the banking license.........
India's industrial revolution
.....This refers to Subir Gokarn's column "From bottleneck to bottleneck" (Muddy Waters, March 11). Although India has the intellectual capacity, strength and ability to fuel the next industrial revolution, it has miles to go to scale new heights on the industrial front.................
The New Microfinance Handbook
.......The objective of The New Microfinance Handbook is to provide a strategic guide to help assess the financial service needs of the poor and to determine how a diversified financial sector can address these needs. It takes a different approach from the original Microfinance Handbook. Rather than taking an 'institutional' perspective (supply driven), the book considers the clients and their needs (demand side) and how the market can better meet their needs first and foremost..........
Hype, hope and hubris
.....With the Budget out of the way and the Reserve Bank of India (RBI) policy meeting ahead of us, it is a good time to take stock of India's much-needed macro recalibration. It is also worth assessing to what extent the latest Budget acts as a catalyst for this adjustment. India's economy needs to make two transitions......
Sand in the wheels of the rate cycle
A fall in lending rates is still some time away. Yes, the consensus among pundits is that the Reserve Bank of India (RBI) will reduce interest rates when it reviews monetary policy next week. But that might not translate into lower market rates because the monetary transmission system is jammed............
On RBI’s Sense And Sensibilities
The Central bank’s norms on new lenders are mostly sensible. Let’s see who makes the cut
The much awaited document has arrived — a 19-page note from the Reserve Bank of India (RBI) dated 22 February 2013, setting out the guidelines for the licensing of new private sector banks. Having read it through most of the day, I must admit that it is well drafted. Let me outline its key elements and then raise some issues.......
Scope for easing monetary policy: FinMin
Finance Ministry today said that there is a scope for easing of monetary policy to boost growth in view of moderation in WPI-based inflation. "Inflation numbers have also come down so there is certainly a case for (giving) further impulses for growth," ............
Despite IIP surprise, RBI to cut rates on Tue: Foreign analysts
........"We doubt that either of today's data releases (IIP and retail inflation) will prevent the RBI from cutting the repo (and cash reserve ratio) by another 25 bps March 19, while we are also looking for a 25 bps reduction on May 3,".......
Banks unlikely to reduce deposit rates this month
......."Deposit rates may not fall at the same pace like the repo rate as there is a shortage of deposits in relation to the credit. We may see some softening in deposit rates. At the most, deposit rates will soften by a further 25 basis points if there are repo rate cuts of 50 basis points,".......
Street expects RBI to slash rate, despite higher CPI
...........The commitment displayed by the government towards fiscal consolidation in the Union Budget, along with further moderation in WPI and slight improvement in trade data, should provide RBI the window to continue to address growth risks, Shubhada Rao, chief economist, YES Bank, said..........
India is new focus for Societe Generale
.........Societe Generale has been present in India since 1978, through a representative office in Delhi. In 1985, it opened its first full-fledged branch in Mumbai. In 1993, it opened a branch in Delhi. For its third branch, the bank had zeroed in on Ahmedabad. However, it later chose Sanand, as Reserve Bank of India (RBI) guidelines mandate banks to open branches in the hinterland as well...........
Is the “New Normal Inflation” here to stay?
..................The RBI governor believes that the central bank is committed to bringing down inflation below the current levels and in the long run bring it down to 3%-4% levels. The speech of RBI governor minutely examines both arguments in favour of new normal inflation and the arguments formulated by RBI against it. Let us look at some of the factors that have caused inflation in India post 2009-10...............
India Inflation Fight Hampered as Debt Role Hinders RBI
.......“You can crib, you can cry,” former RBI head Y.V. Reddy said in December, when Subbarao asked in a panel discussion if fiscal policy dominates monetary policy. “It’s always been so.”........
Banking supervisors may seek to simplify Basel III
LONDON (Reuters) - Global banking regulators will examine whether their new rules forcing lenders to hold more capital to absorb any future losses should be simplified after criticism that they are too complex to be effective..........
‘Subversion of JPC began soon after its formation’
..........One meeting on February 3, 2011, includes Mr. Chandrashekhar “sensitising” RBI Governor Dr. Subbarao in his chamber, “before his deposition to the PAC”. In effect, not one, but two Parliamentary committees investigating the 2G scam, may have been compromised over the last two year — putting to waste crores of tax payers’ money in the hope that the JPC and PAC, which primarily depend upon witnesses’ testimonies and documents, would arrive at a fair and detailed report on the wrongdoings in the 2G scam..........
Zeroing in on the 'parallel economy'
.........It is, therefore, required first to change the basis of filing returns from “total income” to “gross total income” and, then, to mandate that everyone with “gross total income” of Rs 1 lakh or more must file the return. It may prove to be the most effective initiative to drive away the “parallel economy”. It will not only widen the tax base at the lower level but also at higher levels of income. Unrecorded transactions of existing taxpayers would get disclosed as recipients of such unrecorded money start filing returns.............
Demand for agricultural credit remains high: RBI
Demand for agricultural credit this year is sustained even if other sectors have shown lesser demand. According to the latest Reserve Bank of India (RBI) data for sectoral deployment of bank credit, agricultural loans showed a healthy growth rate of 19.8 per cent against 6.3 per cent last year. This is despite some parts of the country facing severe drought situation this year...............
Nabard bets on mechanisation for farm credit growth
...........A Nabard official said that with limitation in available labour and increasing wages, medium and large farmers are looking for labour saving devices to remain competitive. The policymakers and social scientists are looking for mechanisation to remove drudgery from farm operations so that the rural educated youth do not run to urban areas in pursuit of jobs, which are already in short supply. .............
Banks stop offering long-term bonds over Basel III uncertainty
.......However, under Basel III norms, a bank’s debenture holders must also bear part of the risk. And, in case a bank has to be rescued by tax payers, these bonds get converted into equity, which most likely means they would be worthless. This clause is known in the Basel III norms as the “loss absorption mechanism”. It ensures that the bank continues to function instead of being forced to pay bond holders, triggering a liquidation. For this reason, debenture investors are asking for a risk premium, which in turn pushes up their cost for the banks...............
Mandya co-op bank faces fraud suit
Mandya City Co-operative Bank Ltd (MCC), Mandya, which sought an assistance of Rs 62.40 lakh to “waive the debts sought by 292 agriculturists,” from the Reserve Bank of India (RBI), is set to face action. The Mandya district authorities are set to frame the charges shortly........
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