Who actually was responsible for the 1991 balance of payments crisis? Rajiv Gandhi or V.P. Singh? Therein lies a tale. In 2004, I was asked by the Reserve Bank of India (RBI) to edit and rewrite volume three of their history. During the process, we came up against significant blanks because the record was not fully complete in that many statements were unsupported — not as to what had happened but as to why they had happened in that particular way and not in some other way. In 2006, after work on volume three was over, I was able to persuade the RBI that it should allow an oral history to be recorded. All the main dramatis personae of the 1991 crisis — and several others — would be interviewed on audio and videotape. This would help future historians. A very senior officer of the RBI, Dr. T.K. Chakrabarty and I interviewed around 40 officers from the bank and the Finance Ministry. Those tapes are now in the RBI’s archives in Pune and can be accessed if the Governor grants permission. Another way, I imagine, is to use the RTI route because there is no security involved.............
Read - The Hindu
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Thursday, April 4, 2013
NBFCs to plead RBI to keep Thorat panel norms on hold
Non-banking financial companies (NBFCs) will request Reserve Bank of India not to implement draft guidelines based on Usha Thorat Committee report till the time loan growth revives and regulatory changes are made regarding loan recovery..........
Reserve Bank probe into alleged money laundering case delayed
....When contacted, the RBI spokesperson refused to comment on the investigation report.
However, a person in the know of the developments said, “After the completion of the ongoing probe, the RBI will make it public only when it announces any penalty after another round of show-cause notices and replies. It can take weeks or even months. Even if the RBI completes the probe tomorrow, it won’t reveal the findings.”..........
Youth wanted to loot RBI
MUMBAI: Padma Shekar Nair (27) who tried to sneaked into the Reserve Bank of India (RBI) headquarters in Fort on Wednesday, told police that he entered into the building with an intention to loot the RBI. Nair who police said is undergoing treatment for mental ill told police that he was told that there is huge money inside the RBI and that is why he brought a air gun and tried to enter in.............
RBI breach: 1k pellets found in Keralite’s room
Padmagirish Rajshekhar Nair, 27, who was caught while entering the RBI headquarters at Fort on Tuesday with an airgun, had claimed to possess a bomb and threatened to kill everyone there. Security guards at the headquarters said this is what Nair said to them during the altercation between them. Later in the day, the police found 10 packets containing 1,000 pellets in all and his identity documents from his hotel room. The police have also found some photographs of Nair with a group of people in different locations in South Mumbai during his last visit. The police are now probing whether he has links with any terrorist outfit.........
Teaching Indian sex workers to spot fake currency
In the eastern Indian city of Calcutta, a non-governmental organisation has started a programme to help sex workers recognise fake currency given to them by clients, reports the BBC's Rahul Tandon...........
RBI annual policy on May 3
....“D. Subbarao, Governor, Reserve Bank of India will announce the Monetary Policy Statement 2013-14 on May 3, 2013,” the RBI said in a statement.......
Monetary easing has had little impact so far
..... Will a government that relies on outside support for a parliamentary majority be able to take hard decisions to rein in expenditure? What is bothering the RBI is retail inflation, and especially food inflation, which has been in double digits over the past three months. "Concerns about inflation have not receded," says Rao. The RBI appears to have loosened policy to back the government's efforts to control fiscal deficit and move ahead with reforms. "The RBI has done its job even though inflation appears to be fairly high," says Madan Sabnavis, Chief Economist at Credit Analysis and Research Ltd.......
Don't expect any rate cut in May policy: Keki Mistry, HDFC
At least in the May policy it is unlikely that the RBI will cut rates because they have just done it a while ago. So, they will wait for a while and see what kind of monsoons we have. I would expect a rate cut to happen in the July policy, but let us wait and see.........
'Government has just no say in monetary policy panel'
......The panel has suggested setting up a Monetary Policy Committee (MPC), consisting of two members from the RBI – including its governor – and five members from the government, of whom two would be appointed in consultation with the central bank. But, contrary to the apprehensions, the new setup will ensure greater accountability and transparency, Professor Ajay Shah, who worked on the FSLRC report, told Parnika Sokhi in an interaction. Edited excerpts:..........
A one-stop regulator
......There is however a niggling doubt on whether the mandate of the single regulator is too large and unwieldy. The success of UFA will depend upon putting up an organisation structure that has departments dealing with each unique asset class manned by experts in the field. Employing adequate qualified personnel would be imperative to address a wide range of issues from a diverse customer set. There is also the possibility that some of the less important segments could be given less attention by the UFA.........
Flawed design
......A reading of the analysis of the FSLRC is a good guide to all that is wrong with the current system, from its inability to prevent fraud and crisis, to its inefficiencies, the near impossibility of regulating activity and entities that fell into regulatory gaps and the sheer cost of managing a fragmented regulatory framework. But the solution in addressing all these concerns is likely to excite considerable opposition, and perhaps justifiably so. .......
Barring FDI, the RBI must control all capital flows: FSLRC
Y H Malegam, CA, S B Billimoria & Co, disagrees with Financial Sector Legislative Reforms Commission (FSLRC) recommendation that finance ministry should get the power to impose capital control instead of the Reserve Bank of India. Malegam, who is a long term board member of the RBI, told CNBC-TV18 that capital inflows coming from foreign direct investment (FDI) should be managed by the government, but all other capital control must rest with the RBI............
Implement guidelines to curb money-laundering: Devendra Raghav, Director, Foreign Bank
.............Regulators, namely, the Reserve Bank of India, the Securities Exchange Board of India, and the Insurance Regulatory and Development Authority have all issued detailed KYC/AML/CFT guidelines covering the areas of customer acceptance, customer identification, monitoring of transactions and risk management. Rigorous implementation of these guidelines by the reporting entities creates deterrence to the use of legitimate channels for illegal money.
RBI to urban co-operative banks: Grant unsecured loans up to 25 per cent of assests
.........."In order to promote lending to priority sectors and to provide impetus to the objective of financial inclusion it has been decided that UCBs fulfilling...conditions may, with the prior approval of the Reserve Bank, grant unsecured loans (with or without surety) upto 25 per cent of their total assets," the RBI said in a notification..............
State Co-Operative Bank management urges for action on appointment
IMPHAL, April 3: The Management of the Manipur State Co-operative Bank Ltd today called a press conference at the Manipur Press Club today urging the state government to complete the process of appointment of a cadre officer of the bank who fulfills and fits the criteria of the Reserve Bank of India to the post of Chief Executive Officer in the implementation of the Government of India’s Revival Package for Short Term Cooperative Credit Structure (STCCS).........
Vinod Rai: Auditor or crusader?
........After school, Rai attended Hindu College, University of Delhi, and the Delhi School of Economics where he was one of Prime Minister Manmohan Singh’s students. He was among the unusually successful 1972 batch of the IAS, alongside current governor of the Reserve Bank of India D. Subbarao, central vigilance commissioner Pradeep Kumar, former agriculture secretary T. Nanda Kumar, former home secretary G.K. Pillai, former secretary of the Planning Commission Sudha Pillai, and current electricity regulator Pramod Deo, to name a few. His first posting was to Kohima in Nagaland..........
National Pension System gives near double-digit return
NEW DELHI: The National Pension System (NPS) is fetching near double-digit returns, which is at least a percentage point higher than what employees' provident fund or public provident fund (PPF) offer. NPS is a voluntary long-term saving scheme for the private sector but mandatory for those who joined the government from 2004. ..........
India's Chidambaram sees 8% growth by 2015
........Chidambaram added that monetary easing by the central bank, which has cut interest rates twice so far this year, is beginning to feed into increased economy activity. The Reserve Bank of India (RBI) is expected to lower borrowing rates further in 2013. "I think at this time, there is perhaps still room for cutting rates, but that is a call the [RBI] governor has to take," he said.................
Banks to step up due diligence for diamond financing
....Without specifying the exact quantum of NPAs, Shyamal Acharya, deputy managing director of India’s largest public sector bank, said that State Bank of India (SBI) has to suffer. He continued: “Diamond stocks held as collateral is not a fixed asset which can be disposed off any time. Stocks also pose a holding risk which banks would keep in mind before lending.” Acharya was talking in “Emerging trends in financing of Indian diamond & jewellery sector”, a one day seminar organized by the Gems & Jewellery Export Promotion Council (GJEPC) under the Ministry of Commerce.......
Acute shortage of gold in south India
....Meanwhile, GJEPC has suggested the government allow tax-free import of gold to encourage export of jewellery which consists of around 14 per cent of India’s merchandise exports. Restrictive measures and a raise in import duty would not reduce gold imports to India, which has been proved by a recent report by the Reserve Bank of India (RBI). According to RBI’s data on balance of payment, gold imports in the first nine months of the last financial year were reported at $37.8 billion against C Rangarajan-headed Prime Minister’s Economic Advisory Council’s estimates of $36 billion for the full financial year........
India's GJEPC Hosts Banking Conference
.......Key speakers at the conference include Pratip Chaudhuri, chairman of the State Bank of India, Snehlata Shrivastava, additional secretary at the Ministry of Finance, and Chinmoy Kumar, Deputy General Manager at the Reserve Bank of India, along with members of the diamond trade. Other participating banks included ABN Amro, Scotia Bank, Antwerp Diamond Bank, and Standard Charter Bank. With Basel 3 regulations being implemented this year, the global banking sector is exercising greater scrutiny in lending, including in India. Earlier this year, Maxim Shkadov, chairman of the International Diamond Manufacturers Association (IDMA), criticized the Indian banking sector for allowing clients to use funds earmarked for rough purchases and manufacturing to speculate on rough prices...........
Why India should not further delay a credit line from IMF
.......In December 2012, the Reserve Bank of India renewed its credit line from the Bank of Japan. There is now an option to borrow up to $15 billion (earlier it was $3 billion). However, it is still not large. Moreover, the effective coverage is just 20% at present due to some restrictions. There is a need for much larger option.......
Sebi expresses concerns over grey mkt growth; calls for one regulator
........The comments come at a time when Sebi is fighting a long- drawn case against Sahara group, which has been asked by the Supreme Court to refund over Rs 24,000 crore raised from over three crore investors through issuance of certain bonds without Sebi’s approval.......
Kisan Credit Cards: Bad loan bubble waiting to burst?
..............According to RBI data, banks had Rs.33,200 crore overdue in the direct agrifinance portfolio till 2011 June. The latest figures are not available. The chairman of a large state-run bank, however, dismissed concerns on KCC exposure. “We increase the credit limit only when the farmer repays fully. There are no major concerns,” he said.........
BoI launches portal for better coordination
.......Following the directive of the Reserve Bank of India (RBI), the responsibility of establishing effective coordination between different nationalized, private and cooperative banks and the government, to monitor and ensure effective implementation of government schemes has been given to BOI.......
SBI Partners with NCR to introduce Intelligent Cash Deposit ATMs for a LessCash society
.......NCR’s solutions will allow SBI to offer an array of revenue generating and customer serving opportunities such as bill payments, funds transfer and remittance via traditional card-based or cardless approach, mobile phone top-up, and couponing – making everyday consumer interaction exceptional. What is exciting is that the ATMs’ are capable of cheque deposits too. In the near future, the exact locations where the deployment will happen will be known. Over a period of time, these machines should be able to promote RBIs’ vision of LessCash society.......
Nabard funds development works worth Rs 8,400 cr in Karnataka
.....“We have disbursed the highest ever investment credit support for banks to the extent of Rs 1920 crore in Karnataka. This will improve the much needed capital formation for agriculture in the State,” S.N.A. Jinnah, Chief General Manager, Nabard, Karnataka Regional Office.......
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