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Wednesday, September 18, 2013
Rajan meets PM, FM ahead of monetary review
RBI’s monetary policy: A delicate balancing act
Never has a Reserve Bank of India (RBI) review met with as much anticipation as the one on 20 September. The new RBI Governor Raghuram Rajan has boosted sentiment and excited markets with a slew of financial reforms on his first day in office. Now, markets eagerly await a glimpse into the monetary policy framework of the new RBI leadership team.............
Can’t take a benign view of inflation - A.Seshan
..............As I had suggested about 15 years ago, it is time for the Government to appoint a high-powered commission to formulate a new law to replace the existing RBI Act. It could lay down a preamble giving a clear definition of monetary stability, besides incorporating other objectives such as growth. (The US Fed has triple objectives.) The Financial Sector Legislative Reforms Commission (FSLRC) missed a chance to recommend such a legislation. Next year will see the completion of 80 years of the RBI Act, 1934. It should be the occasion to start preparations for the enactment of a new law, after the Government takes decisions on various recommendations of the FSRLC............
Headaches for RBI Governor - Dr T.V..Gopalakrishnan
Why only Inflation? All problems that the economy face today add to the head ache of the governor and there is no magic wand to set right things. He has to build up confidence in the economy through ..........
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Highly objectionable - P.P.Ramachandran
Ms Shobaa De's
write-up on Dr.Raghuram Rajan the new RBI Governor is in utterly
poor taste and I believe that the Economic Times has not covered itself
with glory in publishing this smutty piece. It is not as
if one lacks a sense of humour in noticing the comic aspect of Ms De
article. It is crude and reeks of the low humour associated with the
Bollywood film world --which is dear to Ms.De. The Towel dropping
incident is the lowest level to which one can sink.
- P.P.Ramachandran
Compliments, Shobhaa De
This
refers to ‘Raghu, With You As Bedfellow…’ (ET, Sep 13). The world is
indeed keeping a watch on the new RBI Governor in an uncertain economic
climate, but Shobhaa De’s piece is out of the box. The Governor has come
up with fresh ideas to help revive the Indian economy. While the world
is busy speculating on more strategic decisions from him, the article
looks at the lighter side. Ms De should be complimented as she has
expressed her views so confidently.
- SANDHYA TANEJA, Bikaner (ET)
- SANDHYA TANEJA, Bikaner (ET)
Raghuram Rajan: RBI's new face is also its hottest
New Delhi: 'Y is every1 going ga ga abt RBI gov Raghuram Rajan? Me thinks he looks a bit wily! N I mean it in a sweeeet nice way! Wink wink :)' reads a post which was put up on Twitter today. The fact that people continue to take to Twitter to discuss RBI governor Raghuram Rajan, even almost a week after everybody spoke at length about his jawline, tailored suits and his classy looks, speaks volumes about the indelible impact he has left on the minds of his supporters.............
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Reserve Bank of India: एक चमत्कारी पुरुष की चाहत
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Raghuram Rajan heralds the next generation of policy mandarins
.............There was a deep spring of talent within the central bank even after the initial economists left; there were men like M. Narasimham and V.G. Pendharkar. But the next big thrust came after C. Rangarajan left his academic career to become a central banker. Rangarajan was instrumental in encouraging a new generation of economists, so that the rethink of the very basics of monetary policy in the 1980s took place in tandem with the rethink on the other components of economic policy. Some names are worth mentioning: S.S.Tarapore, Anoop Singh, A.Vasudevan, S.L.Shetty and Narendra Jadhav, for instance...........
Raghuram Rajan may not unveil any 'gamechanger' policy, says Stanchart
.................A complete reversal of liquidity-tightening measures on 20 September looks unlikely to us. While the Indian rupee's 7.6% appreciation from 3-16 September is encouraging, the RBI might prefer to wait longer for confirmation of sustained currency stability – a factor that has been emphasised as a key determinant of such a reversal............
Policy trilemma: is there a way out?
.........Subbarao also threw up several important questions, of which three are particularly germane in discussions of monetary policy—(i) Should RBI concern itself solely with inflation or worry about real sector issues too? (ii) The nature of RBI’s responsibility with regard to financial stability, and (iii) The issue of RBI’s role in preventing asset price bubbles. The three can be analysed within the context of this slipping transmission belt syndrome.............
Is the honeymoon over?
.............Just a few days into the new tenure one gets a sense of two mindsets at work; in New Delhi, impatience with regulation, a hurry to get to that halcyon phase of high growth, even if sounds like the route Iceland and Ireland took, oh! so long ago. Rajan’s has the weight of a tradition of caution and a memory of a warning delivered at Jackson Hole; and dismissed by the likes of Summers and Greenspan, not to mention the Fed and Washington. The world is still paying the price.
RBI governmor Raghuram Rajan, FinMin to stem rising bad loans
.....The series of measures are likely to be announced by Chidambaram over the next few days. "Discussed a gamut of issues with the finance minister," said Rajan after his meeting with the finance minister. The rise in wholesale inflation to a six-month high 6.1% in August has made it difficult to cut rates to stimulate growth that is projected to fall to 4% this year. Both Rajan and Chidambaram have favoured consolidation among the 26 state-run banks. "It was an informal meeting. A host of issues were discussed," said Takru, adding that the finance ministry will again hold discussions with RBI after the monetary policy is announced on August 20. "We are going to meet Indian Banking Association (IBA) later this month. More measures will be announced after the discussions," added Takru.........
Dr Rajan, your next crisis is coming up in banking
.........This results in what (former RBI Deputy Governor) Rakesh Mohan memorably called “lazy banking”. This is the tendency of the Indian banking system to just fund the government, rather than get on with the hard job of finding good companies and individuals to lend to. This system is doubly profitable for the banks because of their access to low-cost current and savings account deposits, and because of the oligopolistic cartelisation of the banking system.............
RBI asks banks to open more MSE branches
......“The RBI has advised banks to open more MSE focused branch offices at different MSE clusters which can also act as counseling centers for MSEs” said Deepali Pant Joshi, executive director, RBI adding, “Each lead bank of the district may adopt at least one cluster.”................
Rate cuts may be delayed with RBI focus on rupee: Barclays
....According to the global brokerage firm, the RBI is likely to remain focused on supporting the rupee, which has depreciated by more than 13 percent since May and crossed the psychological level of 62 against the dollar last week. "As such, while the focus is on the INR, we think monetary policy calibration will eventually be biased towards further easing, rather than tightening. However, we think further policy easing will likely be delayed," Barclays said in a research note.........
Bankers’ Club meet
RBI Deputy Governor K.C.Chakrabarty will address Bankers’ Club meeting at Mulki Sunder Ram Shetty Auditorium, Vijaya Bank, MG Road, Bangalore at 4 pm on September 23.
HBL
RBI cancels licence of Mahatma Fule Urban Co-op Bank
......This is in view of the fact that Mahatma Fule Urban Co-operative Bank has ceased to be solvent and the depositors were being inconvenienced by the continued uncertainty...............
RBI asks banks to allot different product code to dormant a/c
......State and central governments have expressed difficulties in crediting cheques/Direct Benefit Transfer/Electronic Benefit Transfer/scholarships for students, Zero Balance Accounts, into accounts opened for the beneficiaries under various central/state government schemes but had been classified as dormant/inoperative due to non-operation of the account for over two years, RBI said in a notification. "...Banks are advised that they may allot a different 'product code' in their CBS to all such accounts opened by banks so that the stipulation of inoperative/dormant account due to non-operation does not apply while crediting proceeds," it said.............
Hackers come up with new modus operandi for internet banking frauds
Delhi police have stumbled upon a new modus operandi of e-banking fraudsters in which they first hack the internet banking account of the target and then get mobile number blocked to prevent the bank customer from receiving SMS alerts about illegal transactions made by them...............
Inflation conundrum: Is govt fudging data to trick RBI?
........“This trend of WPI higher than CPI in respect of food items is intriguing and is a trend against normal price behavior and needs to be examined more carefully, as it may have some important policy ramifications,” the report quoted from an SBI research note. Why would the government do this? Because of the RBI. The central bank has many a time indicated that it is now more relying on CPI-based inflation than WPI. So, the government, desperate for a rate cut, may be hoping that a softer CPI food price will prompt the RBI to take a favourable decision sooner..............
‘India Needs to Free Up its Savings’
.........The
money that is pulled back in savings is being held in cash reserve
ratio (CRR) and statutory liquidity ratio (SLR). CRR is more effective
because it is taken away interest free. And with a 23% SLR, why do you
need CRR? Regulators prescribe CRR as a buffer in the event of a bank
default. You also have 23% unencumbered SLR. Why don’t you make SLR 27%?
And it’s not about earning interest. At least, it will work somewhere.........
Mushtaq to head JK Bank for 3 more years
Srinagar, Sep 17: Reserve Bank of India today granted approval for three-year extension in the term of Mushtaq Ahmad as Chairman and CEO of J&K Bank. The extended term will have effect from October 6, 2013. Mushtaq Ahmad took over as Chairman and CEO of the Bank on October 6, 2010. Under his leadership, the Bank witnessed phenomenal growth in all the operational areas.........
Read - Greater Kashmir
Read - Greater Kashmir
JKGB organizes credit-cum-awareness programme
....Representatives from RBI and NABARD, Dinesh Gupta and Nitin Hingole, respectively also spoke on the occasion and enlightened the gathering about the importance of Financial Inclusion for the benefit of rural masses............
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Mahila Bank to have pay-per-use IT infra model
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Read | Business Standard
Shylock ICICI Turns Samaritan
.........When
global markets collapsed because of the financial quake triggered by
the biggest ever bankruptcy — of Lehman — in September 2008, the tremors
were felt in Mumbai’s business district Bandra Kurla Complex. ICICI,
the most futuristic of Indian banks that spread its wings in the global
markets, held notes of Lehman worth $80 million. Although it was just
0.1% of its total assets of $112.6 billion then, it triggered a run.
Such was the panic that the Reserve Bank of India and finance minister P
Chidambaram had to step in to restore calm. When Wall Street giants
responsible for sinking the global economy are lobbying against tighter
regulation aimed at a safer world, ICICI voluntarily junked its past.
Kochhar, who succeeded KV Kamath after his 13-year tenure as chief
executive, tore up the very ICICI structure she grew up with, and laid a
new foundation..............
‘Capital Controls Needed to Insulate Economies from US’
......The
new Reserve Bank of India Governor, Raghuram Rajan, has earned market
endorsement with his free market principle on currency and by rolling
back the measures of his predecessor Duvvuri Subbarao that were dubbed
as “partial capital control”..............
My View on "FSLRC members handsomely “compensated” for their “..."
Transparent norms for compensation packages, where public funds are involved (Here no need to get confused about the meaning of public funds- Organisations dependent on funds from public, whether as tax or as share capital contribution or as deposits as in the case of financial institutions including banks are all handling public funds and have only ‘Trusteeship’ rights on the resources) need to be evolved. Thank you Moneylife for exposing the absence of any norm in this area.
- M.G.Warrier
What crisis! Babus ready for medical tourism
Currently, India is going through an acute fiscal and foreign exchange crisis, right? If you say ‘Yes’, consider this. According to a newspaper report, the Centre has decided to reimburse the actual cost of treatment abroad for up to two months as well as fund the return airfare for IAS, IPS and IFS officers, along with one accompanying attendant,..............
Forex trouble
......The RBI governor has indicated transparency and predictability as his watchwords. So, the RBI should announce the exchange rates used in the swaps, including the ones with oil marketing companies. It will have a salutary impact on the market rate. .................
Who pays the price for biometric scan ATMs?
....... This new directive will involve additional expenses which bank depositors will end up bearing under the guise of technology costs. So far, Aadhaar has made no mention of who will bear the cost of biometric POS (point of sale) readers (according to a senior banker, they will cost Rs8,000 each) and biometric ATMs (Rs 4 lakh for the machine plus installation, maintenance, electricity, etc). According to the news report, banks are expected to add around 200,000 POS machines and around 20,000 ATMs next year................
SEBI’s selective reaction
.........The Reserve Bank of India (RBI) is far more open, but has no formal mechanism to engage with consumers. Even the chambers of commerce, whose collective financial muscle ought to give them some clout, only lobby the interests of powerful office-bearers. ................
RBI Bans 80:20 Schemes: Correction On The Cards?
......Several viewpoints have been floated since the RBI announced this ban, largely speculating on a fall in real estate prices as a consequence. It has been opined that developers’ holding power will be significantly reduce, forcing them to reduce prices. This analysis of the situation is based on the currently high levels of inventory that developers are saddled with, especially in larger cities like Mumbai, Bangalore and Delhi...........
Close a/c using cards for online forex trading: RBI to banks
........As and when any bank comes across any prohibited transaction undertaken by its credit card or online banking customer, the bank will immediately close the card or account of the defaulting customer, the Reserve Bank said in a notification. If it is observed that the bank concerned has failed to carry out the measures as outlined above, RBI may proceed against the defaulting bank, it said...........
Standard method to determine value of gold accepted as collateral: RBI
Now, non-banking financial companies (NBFCs) offering loans against gold jewellery would have to follow a standard method to determine the value of gold accepted as collateral, the Reserve Bank of India (RBI) has said. On Tuesday, the central bank introduced new norms for lending against gold jewellery, following the recommendations of the K U B Rao committee, which studied the issues related to gold imports and gold-loan NBFCs in India. "Currently, there is no standard method for arriving at the value of gold accepted as collateral and the valuation is arbitrary and opaque," RBI said........
'Funding for lending' scheme in works to make home & auto loans cheaper
NEW DELHI: Waiting for the Reserve Bank of India (RBI) to cut interest rates before deciding on buying that home or a car? You may not need to! According to ET Now the RBI is planning a 'funding for lending' scheme, under which the central bank may lend money to banks at a 1-2% cheaper rate. This in turn will allow banks to lend to potential consumers at a lower rate................
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