The government has made the first move to implement the contentious recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), despite the strong reservations of outgoing Reserve Bank of India (RBI) Governor D Subbarao. In the last week of July, the finance ministry wrote to RBI Deputy Governor Urjit Patel, saying the government proposed to acquire RBI’s shareholding in Deposit Insurance and Credit Guarantee Corporation (DICGC), in line with FSLRC recommendations. Urjit Patel is chairman of DICGC, while RBI Executive Director Jasbir Singh is a board member.............
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, August 28, 2013
RBI suggests banking sector overhaul
...........“There is a case for reviewing the current ‘stop and go’ licensing policy and consider adopting a ‘continuous authorisation’ policy, as continuous authorisation keeps the competitive pressure on existing banks and also does not strain the banking system as ‘block’ licensing may do,” RBI said. However, it says such a policy could only be adopted after ensuring the entry norms are stringent, to encourage only well-qualified entities.................
RBI calls for government to dilute ownership in PSBs
.......“As regards the reduction in fiscal burden on account of recapitalisation of the public sector banks (PSBs), Government may consider options from menu of choices available such as issue of non—voting equity shares or differential voting equity shares, adopting FHC structure or diluting stake in PSBs,” the paper said. “Going forward, there is a better pay—off in enabling PSBs to improve their performance while promoting private sector banks,” the discussion paper titled ‘Banking Structure in India — The Way Forward’ said.........
SBI group topped list of customers' complaints in FY'13 in Raj
........Out of the total 4,099 complaints received by the ombudsman in 2012-13, 1,789 complaints were filed against the SBI and its associate banks and 1,121 complaints were against nationalised banks, whereas 65 complaints were against other public sector banks, N P Topno, Banking Ombudsman-Rajasthan, RBI told reporters here Tuesday. Maximum number of per branch complaints is 16 against Standard Chartered bank, 11 against HSBC, 5 against ING Vysys bank and 2.14 against Kotak Mahindra Bank Ltd..........
'Reliance Bank' to be listed after three years: Anil Ambani
.........Hopeful of getting a banking licence for 'Reliance Bank', industrialist Anil Ambani today said this proposed venture will help lower Reliance Capital's debt to one-fourth of current levels and would be listed as a separate entity with an IPO after three years........
Subsidiarisation may not be mandatory for foreign banks
.............“The regulatory expectation would be that those foreign banks, which meet the conditions and thresholds mandated for subsidiary presence for new entrants or which become systemically important by virtue of their balance sheet size, would voluntarily opt for converting their branches into WOS,”..............
RBI’s annual report slams Punjab govt’s poor debt management
........However, the report points out that some states, such as Punjab, are using these advances a bit too often as there is a perpetual mismatch between revenue receipts and revenue expenditure. The report shows that Punjab borrowed money for as many as 232 days during the last financial year and it also availed of a special WMA for 233 days during 2012-13. While normal ways and means advances are clean advances given to state governments, the special ways and means are secured advances against Union government securities that are time-bound..............
Element of accountability
........While I fully agree with the views of Reserve Bank of India Deputy Governor K C Chakrabarty, the remedies suggested in the editorial would not prove to be of much help. Neither the tenure, the selection process, nor the pay packet per se are affecting the performance of managers in government-owned banks. But what is affecting their performance is the lack of accountability and the other ills mentioned by Chakrabarty. ...............
As Slew of Negatives Continue their Dadagiri, FM Shifts Blame on to Dada
For
the second time in less than a week, Finance Minister P Chidambaram
appeared to blame his predecessor Pranab Mukherjee, now the President of
India, for the dire state of the economy even as stock markets plunged
and the rupee fell to another record low. Shifting tack from his
usual theme of blaming the global environment, Chidambaram admitted
domestic problems had also contributed to the economy’s travails. These
domestic
problems, the minister told the Rajya Sabha, originated, at least in
part, during the tenure of his predecessor. “There are not just external
factors, there are also domestic factors.........
Read - ET
More reforms, not less
Finance minister P Chidambaram hit the nail on the head when he told Parliament that what India needed was more reforms, not less, that what the economy needed was less restrictions and not more, that it needed a more open economy and not a closed economy. This is especially important at a time when there is greater clamour, including from the ministry Chidambaram himself heads, to put higher import duties to curb imports; or to keep high export tariffs to restrict, for instance, the export of iron ore on grounds the domestic steel industry will benefit from this. The rupee has already paid a heavy price as investors felt the government and RBI were, together, going to impose capital controls—the finance minister has repeatedly pointed out that India has never imposed capital controls on repatriation of profits for instance, and ........
Exploring new avenues for revenues: Some suggestions
.........Both finance minister P Chidambaram and Reserve Bank of India (RBI) Governor D Subbarao, in separate talks to the media tried to calm down the public through their statements. The Finance Minister assured that there is no intention to introduce capital controls, including on repatriation.
Is Current Account Deficit really the culprit for India?
If you pick up any financial daily or switch on a business news channel today you will find the reason for India’s falling economic standards -- the current account deficit or the CAD. But is CAD really the culprit or are our 'sentiments' at play here?..........
Plotting the recovery- Charan Singh
......The problem of the widening current account deficit can be attributed to rising uncertainty in the economy, symbolised by large volumes of gold imports. As three-fourths of the gold in the country is purchased in rural areas, the government needs to consider providing financial instruments to address uncertainty in those areas. Illustratively, the government could consider inflation-indexed bonds to be made available through rural bank branches and post offices........
Policy dilemmas galore
........Bringing down inflation involves another dilemma. The Reserve Bank of India (RBI) has applied the conventional monetary tool to curb inflation - firming up interest rates - and has come to grief. Inflation has remained stubbornly high; it appeared to start coming down only recently. What has simultaneously happened is a fall in the growth rate - which is natural when you tighten money - which has, in turn, created fears of the onset of stagflation, a term that is being increasingly bandied about..............
Asia’s real problem is boosterism, not Fed policy
........Take India, which has been acting as though its rise to superpower status was inevitable, no matter what the government did (or, more important, didn’t do). Reforms have stalled, while unaffordable government handouts have proliferated. And with an election due in nine months, no one expects that the hard decisions needed to get the economy back on track will be taken. There’s great excitement that respected economist Raghuram Rajan will soon helm the Reserve Bank of India. But the nation’s problems—which include a government as bereft of ideas is it is flush with corruption and inefficiency—are largely beyond his control...............
FM chases runaway bride
.........Neither the RBI's knee- jerk intervention, nor the Finance Minister's repeated assertion that the government is in control of the economic situation, helped rein in the currency, one of the worst performers in Asia. The unbridled rupee ended at 66.24, a record closing low, after crashing over 3 per cent against Monday's close of 63.20. It hit all- time low of 66.30 minutes before the closing bell. Observers attributed the rupee crash to the passage of the food security bill in the Lok Sabha, which has set the alarm bells ringing about the country's fiscal health..............
How Jupiter's Vazirani is playing the Indian rupee slide
....The outgoing governor of the central bank is in the process of handing over the reins to his successor, Raghuram Rajan. Rajan does not officially take up his post until 5 September, leaving something of a power vacuum at the top of the RBI. In such an “interregnum”, it is quite easy to imagine policy paralysis, with a soon-to-be ex-governor unwilling to sanction, for instance, a major intervention in the foreign exchange markets, and a new governor not yet in a position to be able to do so.....................
The great Indian slide show
.........To manage the volatility in the exchange rate, the RBI on July 15 raised short-term interest rate. But it hampered the credit flow to productive sectors. To ensure that industry does not grind to a halt for want of funds, the RBI decided to buy government bonds from banks. The government is thinking of slapping duties on more non-essential luxury goods. But the measures are yet to make any significant improvement in the situation..............
The Rupee has Fallen Below its Fair Value
........The real effective exchange rate (REER) — a weighted
average of our currency relative to our trading partners’ currencies,
adjusted for inflation — is a common measure of the alignment of a
currency to its true value. The RBI’s measure of REER uses the wholesale
price index (WPI) for India and consumer price index (CPI) for trading
partners, we re-estimated the REER using CPI for India as well, with
2005 as the base year. Our estimate of REER was at an average of 11.4 in
July. This means that despite the recent depreciation, the rupee was
11.4% higher than its fair value in July. Based on this, observers say
the rupee needs to correct more............
A speculative attack on the rupee?
.........In sum, a series of changes that have occurred since financial liberalisation began have increased India’s exposure to the adverse effects of currency speculation. Given the nature of these changes there is little that the RBI and the government can do about such speculation, despite the claim that: “While introducing currency futures, the Reserve Bank and the Securities and Exchange Board of India (SEBI) had put in place various safeguard mechanisms to monitor positions, prices and volumes in real time so as to control excessive speculation.” In any case, there is nothing whatsoever the RBI and the SEBI can do to curb speculation in the NDF market that is outside its jurisdiction............
Banks now using your missed call to authenticate yourself
......According to new system when a customer logs into Net banking with his password, a separate screen pops up with a landline number. One has to give a missed call from their mobile to the landline number within two minutes. NetCore software receives the missed call and matches it with the customer’s mobile number registered in the bank’s database to provide access...................
SBI to merge one associate bank this fiscal: Pratip Chaudhuri
...........“Right now we are in a position to merge one of the subsidiaries.... We may merge one associate bank this year,” SBI Chairman Pratip Chaudhuri told PTI in New Delhi. Asked if the bank has identified the suitable candidate, he said a decision in this respect is not yet taken. SBI first merged its associate State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI........
Rs. 230-crore irregularities found in loan waiver scheme: Chidambaram
......He said errors of exclusion and inclusion were natural in a scheme that involved 3.73 crore beneficiary accounts spread over one lakh bank branches through which Rs. 52,259-crore debts were waived. While enquiries by the RBI and Nabard were under way, so far they had detected irregularities in respect of 3,36,156 accounts involving Rs, 230 crore. The probe was taken up in the light of the CAG report exposing irregularities in waiving debt...........
Ponzi operators to face fine worth three- times of profits
.......... Operators of illegal moneypooling schemes will soon face penalties of up to three times the profit made by them, as against the current provision of a meagre fine of Rs one crore. The capital markets regulator Sebi ( Securities and Exchange Board of India) has decided to increase the monetary penalty for those running unauthorised Collective Investment Schemes ( CIS), as the existing mechanism have not proved to be sufficient to deter such illegal mobilisation of money...........
Dhanalaxmi Bank to mobilise Rs 37.75 crore by issue of shares
............A special resolution in this regard was passed at the 86th Annual General Meeting of the bank held here today, bank sources said. Equity shares of 10.5 lakh, 12.5 lakh and 52.5 lakh would be allotted to investors B K Raveendran Pillai, Mohanachandran Nair B and and N V George respectively as per rules of the Securities and Exchange Board of India, Capital and Disclosures Requirement, Reserve Bank of India, Union Finance Ministry and other relevant statutory authorities...........
Subscribe to:
Posts (Atom)