..........In recent years, RBI has found itself juggling an increasingly complex reaction function. Rajan’s predecessor famously noted that the central bank was trying to conduct monetary policy across three dimensions—inflation control, mitigation of balance of payments risks, and the interplay with fiscal policy. But the D. Subbarao-led RBI, by trying to do too much, failed to varying degrees across each of these three dimensions. Monetary policy was set tight enough to push gross domestic product (GDP) growth below trend and exert a degree of control over wholesale price inflation, but not tight enough to rein in consumer price inflation. The game of cat and mouse with North Block, which houses the finance ministry, has helped encourage some fiscal discipline, but not enough...........
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.
Thursday, October 24, 2013
Rajan, Subbarao unite to help FM sail through crisis
........This is for the first time that both the incumbent and the former Governor would attend the FSDC meeting. The last FSDC meeting in July was attended by both Rajan and Subbarao, but that was in their capacity as Chief Economic Advisor and RBI Governor, respectively. “Dr Subbarao has also been called for the meeting. It will be a kind of farewell to him from the Finance Minister,” a finance ministry official, who did not wish to be identified, told Business Standard...............
Need to rebalance RBI’s interest structure
.........It is believed that the economy is susceptible to a rundown when short rates exceed long rates. A further slowdown, in any case, needs to be prevented and is quite feasible since the compelling conditions that necessitated an interest hike have been contained. There is now enough room for the RBI to restore balance...........
Why govt funds for Sanskriti School? HC
The Delhi High Court today expressed its displeasure over the city's reputed Sanskriti School, run by the wives of senior central officers, for receiving government funds, saying "you cannot create a separate island for children of these bureaucrats". "What is the necessity for various state governments and ministries, including the Defence Ministry and Reserve Bank of India, to fund the school run by the officers' wives"? the bench headed by Chief Justice N V Ramana said. ...........
Retd bankers want say in talks with IBA
.......However, as the UFBU comprises only the serving bank officials, several vital concerns of the retired officials remain unaddressed. Though the issues concerning the retirees are also taken up at the meetings between representatives of bank officials and managements, the focus remains on the matters pertaining to the serving officials due to lack of representation of retired members. Hence, even as the salaries of the serving officials have increased by more than 200 per cent as a result of three wage settlements since 1995, the pension of the officials who retired prior to 2002 is yet to be revised.........
State Bank of India Transfers 70 Executives
.........Change
of portfolios and transfer orders have been issued for six deputy
managing directors, 16 chief general managers and 46 general managers.
SBI executives expect more transfers as Bhattacharya gets her core team
ready for the next three years. Bhattacharya was appointed chairperson
of the country’s biggest bank earlier this month. SBI insiders say
this is one of the biggest reallocation in recent times, which should
also be viewed in light of promotions ordered in August and September.......
Prakash Bakshi, former NABARD chairman, to talk on ‘Emerging Opportunities For Enterprises In India’s Agri & Food Industry’
.......The summit will cover topics such as: Future outlook for India’s food & agri businesses; what opportunities and challenges are lying ahead in the agri sector; what are the emerging private equity and M&A opportunities in agri & food industry; and how to build effective agri infrastructure & supply chain logistics. It will also cover primary processing—food commodities, grains, dairy & poultry; processed foods, food service and retail...........
A matter of image
.............The report says that Rajan's international image is responsible for a better relationship with the finance ministry. This is not true for his political masters. The current finance minister has the intelligence to project the Reserve Bank of India's independence on trivial issues (read policy rate changes). During the elections, the RBI will be pushed to the sidelines. Rajan is aware of this.........
Stemming inflation and sequencing the exit
.........The RBI is likely to increase its March-end inflation forecast but at the same time trim down the GDP growth forecast. The classic monetary policy dilemma is back but we think that on balance the RBI is likely to hike the repo rate by 25bps in the October policy to stress on its anti-inflationary stance.........
Have we turned the corner?
In August, India’s economy was headed for a macro-economic crisis, its currency was in a free fall. Since the new Governor of the RBI took over, he has talked the economy back to a position where everyone is happy. What can be a better sign of normalcy than the Deputy Chairman of the Planning Commission having gone back to what he is best at: namely, telling us that, yes, inflation is high but it will come down next month? So what caused the near crisis? And have the causes gone away?...........
Sensex inches away from 21,000: Is it seeing a villain in Raghuram Rajan?
.......All the major domestic and foreign factors having been taken care of as of now, the only major macro event from where the markets pick their next cue is the RBI’s policy meet on October 29, say analysts. “I’d say that the concerns that most of the emerging markets and CAD-challenged countries like India faced due to the fears of tapering, have receded. This has been the reason why...........
Planning Commission scraps Raghuram Rajan index for Central fund distribution
......."We are considering how to reconcile it (Rajan index) with the different indices we currently use in the Commission," Planning Commission deputy chairman Montek Singh Ahluwalia told The Indian Express. He said the Rajan report has to be placed before the National Development Council, the forum which brings all chief ministers and the Union Cabinet together to decide on plan related issues............
The Next Financial Inclusion Challenge: Private Sector Leadership
......What needs to happen to meaningfully advance financial inclusion for the poor – an end-state in which everyone has access and can use the broad range of financial services they need to improve their lives? World Bank President Kim has identified 2020 as a target for achieving universal access to basic transaction services via mobile money, debit cards or simplified bank accounts. This is an important first step towards that broader range of services.........
Banks complete first phase of financial inclusion
Commercial banks have achieved the target of providing banking outlets to all villages in Karnataka, with a population of over 2,000 people. Till now, the banks have covered 3,395 such embanked villages by providing outlets, of which brick and mortar branches have been opened in 402 villages in the first phase under the financial inclusion scheme........
Moolah Mantra
......... Financial planning has been highlighted in the regulations and the certification there under as eligible category for accreditation. The recently notified Reserve Bank of India guidelines on wealth management in banks are also on the same lines. It is expected that implementation of these guidelines will also expand the career opportunities for financial planner (FP) in the banking sector...........
Will banking dreams of corporates under probe be scuttled?
........With agencies now going after business houses with a vengeance - what many are calling a witch hunt of sorts, even honest bureaucrats are scared stiff to take any decision. So will this growing vigilante atmosphere also make the job of the RBI, which is all set to give out new bank licenses to corporate houses, much tougher than anticipated? .......
SBI to get Rs 2000 cr as part of Rs 14K cr banks fund infusion
The Finance Ministry today decided to pump in Rs 2,000 crore in State Bank of India and Rs 1,800 crore each in IDBI Bank and Central Bank of India as part of the Rs 14,000 crore capital infusion plan for the current fiscal. "SBI is getting Rs 2,000 crore. Bigger banks are getting more," Financial Services Secretary Rajiv Takru said here...........
Soft loans will be hard on the exchequer
........It is notable that this policy announcement was made with the apparent implicit approval of the Reserve Bank of India (RBI) Governor Raghuram Rajan - he was present at the finance ministry meeting that approved the "in-principle" decision to infuse more capital in public sector banks to drive the festive season. This is the same economist who famously warned of the impact of indiscriminate subprime lending in the US, well ahead of the crash of 2008, and who has made inflation control the centre of his last monetary policy.............
India's third biggest gold fund reopens to investors
..............Reliance Gold Savings Fund, which manages about $300 million according to Lipper data, will begin accepting subscriptions from Wednesday after suspending inflows on August 1, according to a notice sent to investors. The government and the central bank launched a series of measures this year to curb the country's appetite for gold as India battled a ballooning trade deficit and a weak currency. Gold is the biggest item on India's import bill after oil......
Financial markets and the real economy
....Overall, it may be premature to believe that the current account deficit could be well below $70 billion (as finance minister P. Chidambaram says) or that the current account deficit is no longer a problem (as RBI governor Raghuram Rajan says). Coming back to the apparent stability of the exchange rate, we should not forget that this is the result primarily of a daily demand of $350-400 million being met outside the market, through the swap facilities made available to the oil importers. We should not forget that............
Teaser home loans make a comeback
Three foreign banks — Citibank, Standard Chartered Bank and HSBC Bank — have launched semi-fixed interest rate home loans, popularly known as teaser loans, to attract customers during the festive reason. To avoid the Reserve Bank of India’s frown, they have made these products transparent. A few years ago many banks had launched teaser loans but subsequently withdrew them. In case of Citibank and HSBC Bank, the new offering is valid on loan bookings till November 30..............
Rising NPAs a Worry, But You Can Bet on Select Pvt Banks
..“Private
sector banks are likely to perform better than their public sector
counterparts due to their lower NPAs, aggressive management and ability
to protect margins. Despite their higher valuations, you could buy some of these stocks on dips,”............
No end to banks' woes; NPAs at 4.4% by Mar 2015: S&P
Indian banks will continue to face asset quality troubles till March 2015, and the gross non- performing assets (NPAs) in the system will grow to 4.4% by then, global credit ratings agency S&P said today. "Sluggish economic growth, rising interest rates, and the volatile currency are hurting the country's highly leveraged corporate sector," it said in a note, adding that NPAs will grow to 4.4% by March 2015, from 3.4% in March 2013 due to corporate defaults........
How banks play with our money
..........Don’t believe me? This is what K.C. Chakrabarty, Deputy Governor of the Reserve Bank of India, had to say on the matter in the course of a speech he delivered in Udaipur earlier this month: “Our experience in India demonstrates that the pricing of the products and services — both on the liability as well as on the asset side — are heavily weighed against the retail customers as a group.” Translating for bankerspeak, what the person tasked with overseeing banks is saying is that whether it is relating to deposits (liabilities) collected from retail customers (you and me) or loans (assets) extended to them, the terms of trade are all on the side of the banks. In other words, you are not getting a fair price for your money, and you are not being charged a fair sum for your credit............
Hackers hit bank, steal Rs 16 lakh
MUMBAI: Personal details provided to the bank as part of know-your-customer (KYC) norms are no more secure. In a recent fraud, at least Rs 16.7 lakh was stolen from a Mumbai company’s bank account after fraudsters hacked into the bank’s server and tampered with the information submitted under KYC guidelines.............
Frauds are just a click away...
.......Information Technology Act 2000 mandates a statutory compliance from banks to ensure that the internet banking service offered is safe and secure. The Reserve Bank of India has directed the banks to have a comprehensive internet banking policy to protect the customers against security breaches. Rules regarding IT (Reasonable Security Practices and Procedures and Sensitive Personal Data Information ) u/s 43A, require banks to follow the ISO 27001 security standard for internet banking. The user is expected to keep his login ID and password safe and secure and ensure that no security breach happens due to any negligence. Loss of password by the user is very common as the user falls prey to phishing attacks or.............
Malware in ordinary email can lead to online banking shock
...... Most
financial hack attacks, experts said, start with ‘phishing’, where
fraudsters steal a victim’s personal info by sending out emails that
appear to have originated from legitimate financial institutions. These
emails usually ask the user to update or validate account info after
clicking on a link in the mail. Some phishing emails also come
with an attachment that downloads malware onto computers. The malware
can record keystrokes and steal critical data like logins and passwords
without the user knowing. The information is automatically sent to the
scammer via the internet whenever the malware finds an open internet
connection........
De-jargoned: credit card charges
...............The best thing that you can do before swiping a credit card is read the fine print. Ensure to read your credit card statement every month. Also remember that banks revise charges often, so keep a track of it.
Oracle Helps Banks Deal With Financial Crime And Comply With New Regulations
To help banks mitigate risks while complying with the new Reserve Bank of India guidelines in the present volatile financial market, Oracle today announced the availability of its Financial Crime and Compliance Management (FCCM) solutions in India. Oracle Financial Services Anti Money Laundering and Fraud Analytics provides an end-to-end solution that leverages a robust data model and comprehensive dashboard capabilities to deliver a single transparent, holistic view of all financial crime and compliance related activities across the enterprise. .......
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