..........Rajan is also clear that RBI’s job is to tackle inflation and, Volcker-like, break the back of inflationary expectations that have built up over the past few years. His preferred measure of inflation appears to be the Consumer Price index, not only because it is a more comprehensive gauge than the wholesale index, but also because it is the benchmark on which retail inflationary expectations are formed and against which real returns are measured. ...........
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Wednesday, October 30, 2013
Raghuram Rajan: A Volcker at RBI
..........Rajan is also clear that RBI’s job is to tackle inflation and, Volcker-like, break the back of inflationary expectations that have built up over the past few years. His preferred measure of inflation appears to be the Consumer Price index, not only because it is a more comprehensive gauge than the wholesale index, but also because it is the benchmark on which retail inflationary expectations are formed and against which real returns are measured. ...........
I have never applied for citizenship of another country: Raghuram Rajan
...........“I have never applied for a citizenship of another country, have never been a citizenship of another country and I have never taken pledge of allegiance to another country… On occasions I have held an Indian diplomatic passport because my father was in the foreign services and when I have travelled on behalf of the Ministry of Finance.”..........
Expert group on new bank licences to hold meeting on Nov 1
A high-level panel chaired by former RBI Governor Bimal Jalan that will scrutinise applications for new bank licences will hold its first meeting on November 1. Other members of the high-level advisory committee (HLAC) are former RBI Deputy Governor Usha Thorat, former Securities and Exchange Board of India Chairman C B Bhave, and Nachiket M Mor, director of the Central Board of Directors of RBI, Governor Raghuram Rajan said. The committee will hold its first meeting on November 1, Rajan said today in the RBI's Second Quarter Review of Monetary............
Bankers ask RBI to avoid regulatory arbitrage in specialised banking licence
..........."In today's meeting, they (RBI) were wanting to hear our views. The biggest issue is that we should not disturb the equation of regulation and create a regulatory arbitrage. When we talk of (specialised) licensing, the biggest thing that needs to be kept in mind is that we do not allow a regulatory arbitrage to get created. That is the point that was really made," Chanda Kochhar, managing director and chief executive officer of the country's largest private lender ICICI Bank, said.........
Red carpet welcome
..........But Raghuram Rajan’s statement that now foreign banks could take-over Indian banks, indicates looming dangers to the Indian banking system. It is an open secret that banks abroad, especially European and American banks are going bankrupt, losing confidence of the people. Our prime minister Manmohan Singh has also been saying very proudly that Indian banking systems is one of the safest banking systems and is insulated from the global financial upheavals. And now the present RBI governor’s endeavor to allow foreign banks to take over Indian banks, may create dangers to the existence of the ‘safe’ Indian banking system. ...........
‘People still unaware of banking Lok Pal’
The banking regulator, Lok Pal of the Reserve Bank of India (RBI) had received over 3,900 complaints, most of them related to ATMs against both private and public sector banks functioning in Punjab, Haryana, Chandigarh and Himachal Pradesh. The banks included SBI, PNB, HDFC, and ICICI in most cases, said Ashok Kumar, AGM, RBI. Bank customers lodged complaints with the RBI Lok Pal, Chandigarh, after erring banks did not take remedial measures. But customers in Himachal had little awareness about the banking Lok Pal as 98 per cent complaints were lodged by customers in Punjab, Chandigarh and three district of Haryana covered under the Lokpal in the region, said the AGM.
These facts came to light here as the RBI Lokpal has staged an exhibition at the Kullu Dasehra ground to create awareness among people of the state. “We have put the exhibition last year here as well to create awareness about the Lok Pal and how to get redressal of complaints against erring banks,” said Ashok, who is handling the exhibition here. He said most complaints related to the ATM withdrawals. The amount was debited from customer’s bank account even when cash was not dispensed by the ATM. In such case, dispute arose when two banks were involved — the account holder bank and the ATM withdrawal bank — he added.
Ashok said bank account holders should know that the Lok Pal entertained complaint against a bank if a customer was account holder of a bank concerned and had apprised the bank about the complaint. A customer could file a complaint with the Lok Pal and await its redressal within one month, he added. He said more than 95 per cent complaints had been redressed by the Lok Pal. “If the Lok Pal does not redress the complaint in time, the customer can lodge an appeal before the RBI Deputy Governor to get justice,” he added. He said, “The RBI imposes fine on erring banks and orders repayment of amount along with the penalty as provided under the provisions of the Lok Pal.”
The Tribune
RBI asks banks to charge for SMS alerts on actual usage basis
........."Banks are advised to leverage the technology available with them and the telecom service providers to ensure that such (SMS) charges are levied on all customers on actual usage basis," the Reserve Bank of India said in its Second Quarter Review of Monetary Policy 2013-14...............
Frequency freedom
...........“As all commercial banks are now on core banking platforms, it has been decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals,” RBI governor Raghuram Rajan said in the second quarter review of the monetary policy for 2013-14.................
Banks asked not to pay over Rs. 50,000 in cash for at-par cheques
To mitigate the risk of money laundering and terror funding, the Reserve Bank of India (RBI) has asked banks not to pay more than Rs 50,000 in cash to customers holding at-par cheques............
RBI to launch inflation-indexed national saving securities
The Reserve Bank of India (RBI) is set to launch two new instruments by the end of the current calendar year namely Inflation Indexed National Saving Securities (IINSSs) and cash settled 10-year Interest Rate Futures (IRFs). However, the street opines these two instruments may not find significant investors interest..............
Dr Rajan, will RBI look after consumer protection finally?
.......It’s good to see that Rajan is talking about skill upgradation and certification of the RBI staff and of the entities RBI regulates. But he needs to go much further than just consolidating instructions, getting bankers certified and issuing fresh guidelines. There is an urgent need to see the rot in the bank branches and the harm that toxic retail financial products are doing to households that have been tricked into investing in them by their bankers...........
The RBI tweaks it right - A.Seshan
 |
| The option of living with inflation is no longer seen as an option |
............The Reserve Bank of India should be congratulated for coming out with a realistic policy review supported by a document that leaves no illusion in the minds of the readers as to the state of the economy. It has brought down the estimate of the growth rate of the economy to 5.0 per cent and raised the projected consumer inflation to 9 per cent..................
RBI's overdrive to tame inflation may backfire - Charan Singh
The limits of star power
.......The central bank governor can't sort out the trade deficit, the fiscal deficit or the lagging education system. These are among the persistent issues that have plagued India's growth. But, a central bank governor can inspire confidence that he can manage financial stability and has the tools to address a potential crisis. So far, it looks like Mr Rajan has done a lot in just two months. But, can he prevent a crisis? And will the Rajan rally last?............
Rajan toes the Subbarao line
Rajan does a Subbarao, sacrifices growth to control inflation
.....But the second quarter policy has nothing in it to help revive growth. Rajan is following his predecessor, D Subbarao’s footsteps in fighting inflation and sacrificing growth. We very well know where this policy landed us. For that, we will have to wait for his development policies to be unveiled. Till then we will continue to move with the governor’s foot on the brake pedal...........
Finance ministry remains silent on RBI's actions
......In the past the finance ministry had openly expressed its displeasure over repo rate increase or status quo maintained by the then RBI governor D Subbarao but the official said now the priorities have changed and finance ministry also realizes that taming inflation is also important along with GDP growth.............
Rangarajan differs with RBI on inflation projection
.............."Well I think the inflation rate may not be as high as (RBI) report seems to suggest. I would really think as far as WPI is concerned, it will be around 5.5 to 6%. I don't think that it will exceed 6%...I expect the WPI as well as CPI to remain at slightly lower level than indicated," ........
Maturing with Rajan
Saving the Rupee: 10 questions for Raghuram Rajan
........To anybody who understood even the very basic tenets of Austrian Economics, it was amply evident that the previous two RBI Governors, Reddy and Subba Rao, were running highly inflationary policies at the behest of their political masters. But the financial media being filled with people who probably haven’t even heard of Austrian Economics, were very dutiful in paying encomiums to these RBI governors. If anything, they were out-competing in complimenting them. Not only did the previous two RBI Governors debase the Indian currency enormously and continuously over their tenures, their understanding of basic economics in itself was highly questionable..........
Read...................
IS GOVERNOR RAJAN SHYING AWAY FROM COMMITMENT?
........What is of surprise is the lack of clear - cut commitment on important macroeconomic issues -- growth and inflation. It was expected that Raghuram Rajan would follow the central bank governor’s ‘ Dharma’ of anchoring inflation expectations. With just a mention of both rising WPI and CPI, it is unclear what the R B I Governor wishes to focus on...........
RBI rate hike: Will North block mandarins get Rajan’s message?
Rajan unveils ‘five pillars’ to strengthen banking system
Reserve Bank of India Governor Raghuram Rajan on Tuesday unveiled his five-point plan to overhaul the RBI's developmental measures over the next few quarters. The first of the "five pillars" of the plan is clarifying and strengthening the monetary policy framework..............
5% GDP growth wishful thinking; trajectory at around 4.5%
........On 29th October, we have been told what RBI itself thinks. There is a confidence interval, but RBI expects 5% for the full year. If you look at the latest round of projections, everyone outside the government expects growth at less than 5%. Finance Ministry expects 5 to 5.5% (at the time of the budget, talk was of 6.7%) and Prime Minister’s Economic Advisory Council expects 5.3%. To show its independence from government, RBI is borderline at 5%. In Q1 we had 4.4%, say 4.5%. Q2 is over..................
Read - ET
Rajan cuts to the chase
If simplicity is the greatest form of sophistication, Raghuram Rajan has been doing just that by making small and nuanced changes in the policy document, to the delight of seasoned policy watchers and even those who are trying to de-code it for the first time. Rajan's intention of presenting a clear and precise policy document that clearly lays out the road map for future monetary actions builds on the policy framework he outlined when he took charge of the governor's office.......
Why higher interest rates may eventually be good for growth
.......The stock of financial savings by households has almost been stagnant in recent years because of the shift to real estate and gold—which means that Indian companies could face borrowing constraints when the economic cycle turns. Higher real interest rates on financial assets are a useful way to convince ordinary Indian savers to move money back into the banking system, as inflation comes down and nominal interest rates rise......
Costly mistake
What Raghuram Rajan said on onions
Reserve Bank of India (RBI) Governor Raghuram Rajan may not have been expecting a pointed question on onion prices during the press interaction post the central bank's second quarter monetary policy review, where it hiked repo rate- the rate at which it lends short term money to banks by 0.25 per cent, but the question did come up...........
Why Raghuram Rajan needs to call Sachin Pilot, the minister of corporate affairs
................However, much contrary to the RBI’s intent of encouraging the bond market, the scope for non-banking non-financial companies to issue corporate bonds is almost completely dried up, with the rules for the public deposits, draft of which was unveiled by the Ministry of Corporate Affairs recently. For those who are wondering as to why public deposit rules affect corporate bonds, it must be understood that in India, public deposits include corporate bonds too, unless the bonds fall in one of the exempted categories.........
RBI policy: Rajan’s war on inflation signals UPA’s death knell
.........The RBI’s policy agenda is amply clear. After two successive rate hikes in less than two months since Rajan took over as Governor, he has signalled his hawkish intent to beat down inflation even if it means sacrificing growth. The bad news for the government is that Rajan’s hammer (interest rates) will only have a limited impact on inflation..............
Rajan Needs Help From Delhi in Inflation Fight
......If India wants to get out of this rut New Delhi and the
Mumbai-based RBI have to work together. New Delhi needs to open its
economy more and lower government spending which is pushing up interest rates
and demand, economists said. The central government also needs to help
encourage investment in the country’s overburdened supply chains, roads, ports
and power plants which exacerbate inflation by adding to costs of delivery and
production...
Increase in term repo rate is a positive step: Pratip Chaudhuri, SBI
......So having increased the term repo rate is a positive which takes the country into the money market more towards the term market. But the RBI has been cautious because they are not complacent on the exchange part because ......
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