........The central bank said Wednesday it will begin the sale of the inflation-indexed bonds from June 4. In the first tranche, the RBI will issue bonds of Rs.1,000 to Rs.2,000 crore. The bonds are a new type of debt that Finance Minister P Chidambaram had announced in the budget in February...............
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Thursday, May 16, 2013
Bonds erase gains after hitting Dec 2009 lows
.....The comments came after data on Tuesday showed headline wholesale inflation fell below 5 percent in April, raising expectations the RBI could cut interest rates again at its next policy review on June 17. It has cut policy rates by 75 basis points so far this year. Bond yields have dropped close to 40 basis points since the May 3 policy due to hopes of easing inflation, expectations for continued bond purchases from the RBI and a global market rally.............
Sting in the tale
......The RBI's greatest weakness in this regard is the skill levels of its supervisory staff. The long-standing preference for generalist cadres, which comes with the presumption that anybody can do any job with appropriate training and orientation, must make way for the position that certain functions - such as supervision - require specialised skills developed in the course of acquiring a professional qualification. For supervisors to easily spot violations, they must have skills comparable to the people whom they are supposed to be keeping watch over. Recognition of this lacuna is particularly important at a time when new bank licences are being considered. The new entrants will have to be subject to more intense scrutiny as they put their control systems in place........
Deposit and despair
.....Though Mamata Banerjee claimed that she got to know about the scam only on April 15, Bengali New Year’s day, there is ample proof that the government received alerts from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Central government on the need to regulate the activities of various illegal fund-collecting companies, including Saradha..........
Finance Ministry ratifies 8.5% interest on Provident Fund deposits for 2012-13
The Finance Ministry has approved payment of 8.5 per cent rate interest for 2012-13, up from 8.25 per cent in the previous fiscal, benefiting over 5 crore Employees Provident Fund Organisation's (EPFO) subscribers deposits.............
RBI ordinance against the interests of people: Geelani
........While rejecting the proposal for implementation of SARFAESI ordinance as deemed by RBI Syed Ali Geelani expressed surprise over the assurance endorsed by Omer Abdullah. Syed Ali Geelani added that the proposed move will prove detrimental and will cause unprecedented damage to interests of people of state. Terming the said ordinance against the interests of people of state and deliberate attempt to dilute special status, Syed Ali Geelani opposed the said law and added that it is aimed at to provide one more unconstitutional entry for those outsiders who intend to occupy the estates through illegal, means...........
Subbarao fires up markets
Indian stocks today rose to close at their highest level since January 2011 on hopes of a steeper policy rate cut next month, after Reserve Bank of India Governor D Subbarao said he had taken note of the decline in inflation, reinforcing future rate cut bets................
Why the death of inflation is vastly exaggerated
......While Business Standard quotes Economic Affairs Secretary Arvind Mayaram as saying that the RBI should take the new numbers into consideration for further rate cuts, the Prime Minister’s Economic Advisory Council Chairman C Rangarajan seems to think that we need to watch inflation data for one more month to be sure of the indices’ direction. Rangarajan’s caution is more warranted than early optimism on prices..........
‘Non-core’ solutions
..........Since core inflation is already low and given that there is not much the RBI can do about tomato or onion prices, the risks from this are likely to be minimal. The Government can, likewise, contribute by going in for modest increases in the minimum support prices for crops sown in the ensuing kharif season. That may not be easy in an election year. But if the Government and RBI do their part, and the rain gods cooperate by obliging with a well-distributed monsoon, we will have a more enduring cure to the inflation problem.
Accounting for sustainability
....The Reserve Bank of India, on June 6, 2011, and December 20, 2007, issued separate notifications on ‘Non-Financial Reporting and Risk Management for Financial Institutions in India’ and ‘Corporate Social Responsibility, Sustainable Development and Non-Financial Reporting’. The above notifications introduce the idea of NFR and emphasise it as “basically a system of reporting by organisations on their activities in this context, especially as regards the triple bottom line, that is, the environmental, social and economic accounting”........
Sebi: Reactive or active regulator?
.....The Securities and Exchange Board of India (Sebi), the capital market regulator, has a major role to play in effective enforcement of the rules of the game in the capital markets and some types of deposit-taking. As Sebi celebrates its 25th year, there is much to commend it. But it also needs to look ahead, because the road will continue to be long and treacherous........
Directors of public sector banks: The ground reality
........The discovery that Sunil Gupta, a director on the board of Canara Bank was related to former railway minister Pawan Kumar Bansal, has raised a justifiable furore. He made his entry on the board as a part-time government nominee and then just before the end of his three-year term, was elected as a shareholder director because of his closeness to Mr Bansal, who was then the minister of state for finance. The case clearly calls for a thorough appraisal of the system of appointment of directors on the boards of public sector banks (PSBs). Whether or not Sunil Gupta influenced the bank to get undeserved loans for Bansal’s companies is a separate issue, which is under investigation............
RBI DICTATE ON ‘DOING AWAY WITH INTRODUCTION IN CASE OF NEW ACCOUNTS’ NOTHING BUT MERE PAPER TIGER?
......Now, the moot question is this, if individual branch managers are empowered to make their own rules and defy RBI dictates, then, what is the need to have a regulator like RBI and all those talks about investors’ protection being churned at media interviews?..............
Governor urges envoy to relax IC ban
........Thanking the Indian government and Reserve Bank of India for helping Nepal manage the demand for Indian currency and allowing to invest in Indian securities through Reserve Bank of India, governor Khatiwada apprised the Indian envoy of the problems of migrant Nepali workers in India, who have been facing difficulties in remitting due to lack of identity cards. “They have not been able to remit their earnings easily,” Khatiwada said. On the occasion, they also discussed on cooperation between Nepal Rastra Bank and Reserve Bank of India, demand and supply of Indian currency in Nepal, and payment system between the two neighbours............
After ATM heist‚ India's IT sector again in soup
A breach of security at two payment card processing companies in India that led to heists at cash machines around the world has reopened questions on the risks of outsourcing sensitive financial services to the Asian nation............
Edelweiss plans to enter banking, awaits RBI clarifications on norms
......Edelweiss Financial Services, already into stockbroking, mutual fund and insurance, intends to enter banking. It is waiting now for clarifications from the Reserve Bank of India (RBI) on its guidelines on new bank licences. The guidelines were out in February. Following queries from prospective applicants, the central bank is expected now to issue clarifications............
Bank Licenses Another cash cow
.........The desire to improve financial inclusion is only a sugar quote and if the Govt and RBI are serious on Financial Inclusion the existing banks themselves can be made to achieve that. Unfortunately, our masses are illiterate and they can be easily fooled by some cheap gimmicks...............
Goodbye to gold
..........This after gold delivered far better returns than equities in recent years. Meanwhile, the Reserve Bank of India said on Wednesday that it will launch the first tranche of inflation-indexed bonds on 4 June.........
Gold price crashes 2nd time this year
In anticipation of aggressive rate cuts by the RBI next month and waning investor interest in gold, the markets reaped the rewards of higher investor flows on Wednesday. Gold price also witnessed second biggest fall this year..........
Gold demand may come down, says Rangarajan
.....“Some action has been taken by RBI in terms of controlling gold demand. To supplement these actions, as inflation comes down and returns on financial products become more attractive, it will be possible to contain gold demand,”..........
Sharma wanted to make it big
............JVG’s troubles started in June 1997 after the SEBI asked JVG Finance to refund the Rs.45 crore it had raised from a public issue in March 1997. A day after the issue had opened, Reserve Bank of India issued a show-cause notice asking why JVG Finance should not be barred from accepting deposits as the group companies had already exceeded their deposit limits.
Chidambaram to woo investors in UK, France and Qatar
..........Chidambaram’s meetings in Qatar will include CEOs of leading companies, banks and Pension Funds there. He will leave for India on May 19. The Finance Minister will be accompanied by Department of Economic Affairs Additional Secretary Shaktikanta Das and RBI Deputy Governor Anand Sinha, among others. Chidambaram earlier held similar investor meets in Hong Kong, Singapore, Europe, Japan, Germany, Frankfurt, Canada and the United States to attract foreign investment into India...........
Investors eye small, old southern private banks
A few small old private banks are witnessing a flurry of activity in their ownership structure even as the Reserve Bank of India (RBI) is readying to permit a new set of private sector banks into the country’s Rs.75 trillion banking sector. While some of these investments are part of routine financial transactions, certain investments could be part of a larger strategy by financial institutions for possible take-over of smaller banks to gain entry to the banking sector, analysts said. Also, companies that win banking licences will benefit from the branch network of such banks, they said............
Bank takes over Deccan Chronicle press
......Earlier this year, the bank served a demand notice on DCHL, asking it to wipe out the entire liability within two months. The bank also served a possession notice under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002. Accordingly, it pasted a notice at the Kondapur press, indicating a “symbolic taking over” of over 9,800 square yards of land.......
Takru, bankers discuss stalled Maheshwar hydel project
..........This was the first time the finance ministry had called a meeting to review lenders' exposure to a particular project. Asked about this, Kumar said, "The ministry is interested in the bank (as) banks are owned by the ministry...In this project, PSBs and other public sector bodies have sunk in a lot of money and they are owned by the government...............
Perils of an ad hoc forex policy
..............The RBI’s forex market intervention practices, and their impact on the rupee’s exchange rate movements and the corporate sector’s financial fortunes, have therefore had a checkered history. What is striking, even despite this, is the fact that the RBI is still not anchoring its forex market policy to some larger economic objective or target. In the light of such a stance, one cannot really disagree with the Financial Sector Legislative Reforms Commission report’s call for setting the RBI clearly defined and measurable economic objectives, and holding it accountable for that.
A strong US dollar is good for India
.......Improving fiscal health and expectations of lower CAD is not feeding into INR strength. The broad USD sentiment is affecting the INR but going forward the currency will start seeing strength on the back of improved macro economic fundamentals. The USD strength is helping Indian asset classes and as the currency continues to gain traction with the...........
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