.......On its part, the Reserve Bank of India is firm on its policy of intervening in the foreign exchange markets only to curb excessive volatility. In fact, the Reserve Bank seems weary of a depreciating rupee fearing that a weaker rupee will worsen the problem of inflation. The view seems to be demand for imported oil, fertilisers and coal being rather inelastic, no useful purpose will be served by a weaker rupee. There is enough room to disagree with the view............
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 20, 2013
Inflation Can be Good
...So, is inflation good or bad? Well, it depends on the kind of inflation you are talking about. The first type of inflation, what I call “good inflation”, is when wages fuelled by rising demand and increasing productivity grow faster than the cost of goods and services. This process creates wealth and surplus in the hands of the workers. The most important thing to remember about this kind of inflation is that.........
RBI Review becomes a side-show
....One shudders to think what would have happened had the RBI stood firm and not succumbed to pressure to cut rates. In hindsight, it was good it did succumb; against all economic logic, perhaps and despite the Governor’s avowal less than a week ago at the London School of Economics that ‘Inflation above six per cent would justify, indeed demand, tightening of the monetary policy stance!’ Fortunately, Subbarao made up for playing along with the government.........
RBI’s turn to bat
.... Driven by food or otherwise, that’s the inflation households face. Non-food, manufactured goods inflation, to which RBI responds, essentially reflects stable commodity prices with some reduction in pricing power as demand slows. Not surprising then that RBI reiterated its January guidance of whoesale price inflation persisting in the 6.5-7% in 2013-14. This should be the floor though: if GDP growth picks up as expected and global growth recovers, the interplay of global liquidity with a rebound in demand will result in higher commodity prices feeding back into domestic inflation..............
Banks unlikely to cut lending, deposit rates now
........."The repo rate cut is not enough for banks to reduce lending rates. Further revision in the cash reserve ratio (CRR) was required for interest rate reduction. We will look at revising our rates in next financial year only," Pratip Chaudhuri, chairman of State Bank of India (SBI), said..................
RBI could have given stronger signal to push growth: Montek
New Delhi: Appreciating the RBI's decision to cut key interest rate by 0.25 percent, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday said it could have given a more robust signal to the industry. "This (rate cut) is a signal and I have to say that it is in the right direction", he said, while addressing an Assocham conference here.......
BANKER’S TRUST REALTIME: RBI lobs the ball in govt’s court
...........One can’t blame the Indian central bank for taking this stance. After all, efficacy of the monetary policy is limited unless the nation follows a tight fiscal regime. RBI’s mandate is price stability, making credit available for productive purposes and financial sector stability while spurring economic growth is part of the government’s domain. The central bank can extend a helping hand, but the government needs to take the initiative........
RBI runs out of room
.................The RBI notes, but does not fully acknowledge, the fact that "core" inflation - inflation in non-food manufactured products - has moderated considerably, and that the sole driver of inflation now is food prices, which are unlikely to be contained by monetary tightness. The RBI has a warning for the government against raising minimum support prices further, but whether the government will heed it is another matter altogether............
Barking up the wrong tree?
.....As an aside, it’s a sign of progress that RBI policy reviews don’t always result in a “splash or “event”—it suggests that the central bank is doing a better job of guiding market expectations that are reflected in market prices in the run-up to these policy reviews—something that Ben Bernanke has perfected through his artful communication strategy. But while the actions did not disappoint, the guidance certainly did—in some quarters at least.......
Relief laced with caution
......Acknowledging that the Centre had made a “firm commitment to fiscal consolidation” in Union Budget 2013-14, the RBI said the key challenge was to reduce the current account deficit (CAD) which is riding at record levels and “well above the sustainable threshold”. It urged the government to adopt measures to improve the competitiveness of exports and wean away demand for “unproductive imports”. The RBI and the Centre have been bickering for over a year on the direction of monetary and fiscal policy and have blamed each other for not doing enough in their domains to prop up a faltering economy.......
RBI’s different strokes
...........RBI is entitled to its view on whether rate/CRR cuts are warranted by the facts on the ground, but since the first rule of central banking is not to surprise the market, the central bank needs to be consistent in its tone. It can't bring in CPI, CAD and even the output gap as key variables in certain policy statements, omit them in others, and then bring them back again.
RBI flags inflation, CAD hurdles to further cuts
.............."The foremost challenge for returning the economy to a high growth trajectory is to revive investment. A competitive interest rate is necessary for this, but not sufficient," .........
Five global voices on expectations from RBI policy review
......Markets have completed the correction and are now consolidating in want of triggers to move back up. Can RBI surprise by higher than 25bps rate cut? Can government pull out more rabbits from its reforms basket? .......
Repo rate cut not enough, complementary actions needed: C Rangarajan
More than the Reserve Bank of India (RBI)’s action on the rate front, its guidance on limited headroom for monetary easing drew attention. C Rangarajan, the Prime Minister’s Economic Advisory Council chairman and former RBI Governor, says the behaviour of the headline inflation numbers and continuance of the subdued nature of core inflation (non-food manufactured items) will determine the stance. He tells Indivjal Dhasmana that for quality of fiscal consolidation, one of RBI’s main advice, the Centre has to keep revenue deficit under check and aggregate subsidies at the budgeted level. .............
Economic conundrum leaves little luxury for RBI’s Subbarao
...........The Indian economy is in a structural mess, with a growth collapse being accompanied by high inflation and a record current account deficit, which are both signs of excess demand. The previous time India saw such sluggish economic growth, around a decade ago, it had far lower inflation and a current account surplus, which had given RBI under Bimal Jalan far more scope for large interest rate reductions. Subbarao does not have that luxury...........
Subbu to FM: Take 25bps cut, but real mess is at your end
...............Subbarao is telling Chidambaram that the real mess is at your end. How can mere rate cuts help? But, at another level, the monetary policy is a mere sideshow. With politics taking centrestage in the context of the DMK’s proposed exit from the UPA, whatever the RBI does may not matter. Business confidence will not depend on politics, not monetary economics.
May It Please Your Lordship Chidambaram
.....The signal for the broader economy lies more in what the commercial banks are doing, than what the central bank does. Lenders from State Bank of India to ICICI Bank are raising deposit rates. When banks are paying more for funds from you and me, how does it matter if the RBI is going to lend at a lower rate which anyway is based on government bonds that banks buy using our deposits.
RBI Shrugs: Hard Work is Now GoI’s
.........Caught between the devil (slowing growth) and the deep sea (high inflation), the RBI perhaps had no choice but give in to the popular mood. Fortunately, the governor made up for playing along with the government and markets with a hawkish accompanying statement. The statement makes no bones about where the onus lies.......
Banks prefer to play a waiting game
..............“The reduction in repo rates by 25 basis points is a welcome move, and indicates continued focus on growth. At the same time, RBI’s commitment towards maintaining adequate liquidity in the system is important in the context of continued smooth functioning of markets,”........
Monetary threat
...............While the RBI may have acted like a dove by reducing the repo rate by a further 25 basis points to 7.5 per cent, its tone this time is distinctly ‘hawkish’, as revealed in the statement that “the headroom for further monetary easing remains quite limited”. So, what has changed in the last three months?...........
RBI rate cut neutralised by political uncertainty, banks put rate related decisions in limbo
CHENNAI: The RBI's decision to opt for a 25 basis point cut in repo rate (the rate at which the apex bank lends to other banks), has been completely overshadowed by the political developments causing banks to put their lending rate decisions in limbo. According to top financiers, the question mark over the stability of the government has ended up neutralizing the RBI's growth pill completely...........
This rate cut looks like an afterthought
.........it is pertinent to note that the most telling comments from the Central Bank are hidden within the six page statement and highlight the urgent need by the government to " revive investment". In a strongly worded statement, the RBI underlines that a " competitive interest rate" is necessary but not sufficient - and that sufficiency would require " bridging supply constraints, staying the course on fiscal consolidation, both in terms of quantity and quality, and improving governance." Clearly, the RBI is highlighting the limitations of the credit channel of monetary policy transmission in the backdrop of persistent food inflation, anchored inflationary expectations and the morass created by the inertia in strategically addressing massive supply side bottlenecks............
RBI continues with contorted guidance
...........Wouldn’t it have been much clearer if RBI finally took credit for delivering its mandate: bring down core inflation to its lowest in three years by lowering growth by design and that it plans to keep it that way until government reforms and policies change India’s investment environment and pave the way for better growth-inflation dynamics.
Reserve Bank of India: Monetary policy review March 2013 - Full statement
In its mid quarter (Jan-March) monetary policy the Reserve Bank of India (RBI) on Tuesday cut the policy or repo rate by 25 basis points to 7.50%. Consequently, the reverse repo came down to 6.50%.
RBI postpones meet on Surat bank
........According to bank officials, RBI's Mumbai headquarters had assured to place the merger case with Mehsana Urban Cooperative Bank at the meeting scheduled on March 18 in Mumbai. This would have ensured the accounts of 44,000 SNSB customers move to Mehsana Urban Cooperative Bank. However, the meeting had to be postponed as RBI's Executive Director S Karuppasamy has gone on an official tour abroad..........
Awareness programme on financial literacy held
..............Reserve Bank of India Assistant General Manager V. Raveendran led a class on the banking services available for people, and also on the methods to identify fake currencies...........
Corporation Bank plans to reach out to rural pockets
..............“Basing on the guidelines issued by the Reserve Bank of India, we have short-listed the worst affected farmers and small traders and provided them the opportunity of onetime settlement. For farmers, we are ready to provide fresh loans, once the outstanding is cleared,” ..............
Govt infuses Rs 3,004 cr into State Bank of India
.....“We are confident that with this capital infusion, we will meet the capital adequacy requirement prescribed by the Reserve Bank of India,” ....
Improving customer services in Public Sector Banks : Namo Narain Meena
................In order to improve customer service in banks, majority of recommendations of the Damodaran Committee have been implemented by the banks. A Working Group has also been constituted by the Reserve Bank of India to review and update the BO Scheme and also the changes in services and product delivery strategies of banks. Incognito visits by RBI Officers are conducted to bank branches to make independent assessment of the level of customer service provided by the Banks.............
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Bahrain bank's branch atAluva eyes NRK diaspora
.........The bank is already operating branches in Mumbai and Hyderabad and is looking to open a fourth one in New Delhi, Bucheery said, adding that the bank's application is with the Reserve Bank of India, pending approval. "We hope to get it soon," he said.........
Assam to amend Assam Protection of Interest of Depositors (in Financial Establishment) Act, 2000
GUWAHATI: Following the advice of regulator, RBI and SEBI, Assam will suitably amend Assam protection of interest of depositors (in Financial Establishment) Act, 2000. The act will be amended and draft is circulated to other departments to suggest necessary changes. The state government intends to table the bill in the ongoing budget session of the assembly........
Money Transfer mail from Shyamala Gopinath transfer manager RBI bank
Some Indian are playing paying bad game with, our indian, such as win EURO million lottery, win car... I have few name , Ragu Guptta, Sunil singh,Shayam enterprise, R.linganam They all are in Dehli , hariyana and UP regions they are provided account number and saying submit money to win lottery prize. Also they send mail from RBI read below...........
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Banks could face hefty fines if found guilty of money laundering: experts
...........“The officers involved in the act could be tried under PMLA act,” Y P Trivedi, senior Supreme Court lawyer said. “As far as bank is connived, it will not be very easy prove their role as they would put entire blame on officers” he added. However if their role is proved banks would be fined he said. In the cases where money laundering actually may have happened RBI has no power to recover the money and it will have to go through the regular procedure of going to magistrate court for demanding the money, he said..........
Consulting beats finance to the top at IIMs
........."It is true that after the financial slowdown of 2009, the hiring of investment banks took a backseat and consulting as a career option became most sought after. Even though situation improved during the last two years, with RBI's strict regulations regarding the banking industry in India, many multinational banks are shutting shop and slowing down their recruitment,"..............
Banks could face hefty fines if found guilty of money laundering: experts
...........“The officers involved in the act could be tried under PMLA act,” Y P Trivedi, senior Supreme Court lawyer said. “As far as bank is connived, it will not be very easy prove their role as they would put entire blame on officers” he added. However if their role is proved banks would be fined he said. In the cases where money laundering actually may have happened RBI has no power to recover the money and it will have to go through the regular procedure of going to magistrate court for demanding the money, he said..........
No charge for settling credit card dues with cheques, cash
......The Finance Ministry has withdrawn a ‘controversial circular’ that asked all public sector banks to emulate HDFC Bank and charge a processing fee on cash or cheque payments received for credit card dues..........
Bank to pay Rs 88K to man for clearing forged cheque
......."This is not a case of negligence alone but a mischievous act of commission or omission on the part of bank officials, who made the payment against a forged cheque. "The bank cannot escape its liability for such a gross and grave negligence or mischief in causing not only financial loss to complainant but also forcing him at this ripe age to knock the door of this forum for redressal of his grievance," ............
Read - IE
Mallya hits out at SBI chairman
A day after State Bank of India (SBI) Chairman Pratip Chaudhuri told reporters in New Delhi bankers “are blazing all guns and taking all steps” to recover Kingfisher Airlines’ loans, the grounded carrier’s Chairman Vijay Mallya today hit back. “I seriously wonder what motivates bank chairmen to constantly speak to media on loan recovery from Kingfisher Air. What about others?” Mallya tweeted.............
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