Keep it up, Grace !! - Dr.D.Subbarao

My View on RBI's independence under threat, says former Chief General Manager

Dear Grace: 

Just a short mail to congratulate you for your contribution to the Central Banking Journal on RBI's independence.  I learnt about it from Tarambale's VITALINFO. Even the central banking website carries only the synopsis. I take it the journal issue is not yet out.  

I want to commend you for many things. First for keeping intellectually active. Second, for the extensive research you'd done. Third, for publication in a prestigious journal like the central Banking Journal where, I know,  the quality standards are high. And most importantly for taking the debate to an intellectual level. 

Look forward to reading the full article when it's out. Meanwhile keep well and keep writing. 

My regards to Thomas and you. 

Subba

Training for commercial bankers - G Gopalakrishna

Speech by Mr G Gopalakrishna, Executive Director of the Reserve Bank of India, at the inauguration of the Academic Block of the NITTE Institute of Banking and Finance, Mumbai, 9 November 2013

........My thoughts today are focused on the increasing need to integrate the present with the future. The past is passé though it has taught us many lessons. Gone are the days of conventional banking where things could be predicted with reasonable precision. The changing scenario around us and across the world leads to the conclusion that there is an imminent need to keep abreast of everything under the sun when it comes to banking... This then forms the crux of our interaction today – how can such far reaching changes be brought in the mind-sets of millions of bankers who.............

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RBI Deputy Gov stresses on institutional control

Given the fact that public institutions are not performing with optimal efficiency leading to leakage of revenue, there is an urgent need to strengthen institutional control mechanisms, particularly in banks, financial institutions and PSUs, K C Chakrabarty, Deputy Governor of RBI, said............

Read - IE

RBI releases financial literacy material in regional languages

The Reserve Bank of India (RBI) on Tuesday released financial literacy material consisting of financial literacy guide, financial diary and a set of 16 posters for use by banks and all other stakeholders in four regional languages, namely, Bengali, Kannada, Telugu and Urdu........

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Introduction of polymer rupee currency by RBI notes to combat fake currency racket

.....First step from RBI, one would expect, is to announce that they intend to switch over to polymer plastic currency within a particular time frame. If this is considered as letting the cat out of the bag, then, without much publicity, we ought to introduce these polymer based currency notes in high value of Rs500 and Rs1,000. Within a scheduled time frame, we need to mop up the paper currency of these denominations and replace them totally. Only then the FICN can be prevented from entering the country.......

Read - Moneylife

Bad news on the economy

.............. As if this were not enough, there was further bad news. The rupee was once again in reverse gear, having lost 47 paise on Tuesday to return an exchange rate of 63.71 to a dollar. Since early September, the rupee had begun to stabilise around 61- 62 to a dollar. This was due to certain steps taken by the new RBI Governor, including the opening of a special window for the oil companies to source their dollars for imports of crude and a special interest rate for NRI bank deposits. Additionally, the pressure on the rupee had eased somewhat when the US Fed assured that it was not about to switch off the easy liquidity tap. The RBI has now closed the special window for oil companies and, therefore, necessarily they must now buy dollars from the open market...............

Read - FPJ

Passport for progress

........But it should not have been the end of the road even if Rajan's passport had been found to be American. We have engaged foreigners for crucial jobs in the past also. And today, in the age of globalisation it is still less objectionable...........

Read | Business Standard

Banking on popularity

It's not Raghuram Rajan alone who is seen as a rock star by his admirers. At a recent banking event, a host of leading private and foreign bankers (the public sector bankers have to wait, it seems) were surrounded by many admirers. .......

Read | Business Standard

Banking on foreigners

.......RBI’s main purpose for incentivising the conversion of foreign bank branches into subsidiaries seems to be ring fencing the Indian operations of the parent in case of crises, and protecting the interest of the local depositers by ensuring adequate capitalisation and liquidity.

As foreign banks expand their presence in India, there would be increased competition for local banks. However, RBI has made sure that the foreign banks do not dominate the Indian banking sector by restricting entry of new foreign bank subsidiaries beyond 20% of the total capital and reserves of the banking system. For those foreign banks opting for the branch mode, RBI would deny new licenses when .........

Read - FE

Gold questions

.....There are, of course, solutions to India’s gold problem. For example, one reason for the huge demand is the search for value in an inflation-prone economy. Gold-backed funds can obviate the need to hoard the metal. These funds have not been..........

Read - Mint

Proactive RBI

.......The other interesting point Governor Rajan made, possibly in response to fears that, with the CPI rising, another rate hike was on the cards, was that RBI would look at all data before taking its next rate call and that, so far, the data on growth was not encouraging. The fact that RBI announced it would do OMOs next week also suggests it is worried about yields shooting up beyond 9%. That’s reassuring.

Read - FE

Take a deep breath to examine the fundamentals, urges Raghuram Rajan

..........For Rajan to address a press meet with no specific announcement to make is a bit out of the ordinary, definitely a step towards better communication, to clear negative sentiments and offer clarifications in case of any ambiguity - we haven't seen very many Governors do that so far.

Read - Business Today

Finmin promises FIIs policy support

.........The FIIs are also said to have discussed marco-economic matters such as India's current account deficit and fiscal deficit targets, which, they were assured promptly, will be met. “Everyone was bullish, there were no concerns,” Chidambaram told reporters when asked about the meetings. Later in the evening, Mayaram and senior ministry officials met RBI Deputy Governor HR Khan and officials from the central bank as well as Securities and Exchange Board of India to discuss clarifications on the definitions of FII and Foreign Direct Investment (FDI)............

Read - FE

Rajan conference highlights: CAD for FY'14 estimated at $56 billion, no fundamental reason for the Rupee's volatility

......RBI Governor Raghuram Rajan soothed Dalal Street on foreign investing institutions (FIIs) pulling out more Dollars from the Indian debt market for the exposure of FIIs in the market has nearly halved to $19 billion from $37 billion in May this year. Rajan said that the repayment of Dollars oil companies had directly borrowed from RBI through the special swap window shall be done by February–April 2014.........

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India Central Bank Chief Tries to Calm Markets

MUMBAI—India's central bank governor Wednesday focused on the brighter side of the economy—narrowing current-account deficit and slowing core inflation—as he tried to calm investors worried over the impact of a likely rollback of easy money policies in the U.S. India is much better prepared now than a few months ago to handle a rollback of U.S. policies, Raghuram Rajan told reporters. His comments came on a day the Indian rupee dropped to a two-month low against the dollar in early trade and stocks extended their losing streak to the seventh session. ..........

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Rajan Returns to Bond, Hits Golden Eye

.......“There are issues we have to worry about and there are issues we should not be so concerned about,” Rajan said. “It is important that RBI clarifies its interpretation of economic events and the likely direction of policies at times of uncertainty so that the market worries about the right things and does not get into a tizzy about the wrong ones.” ...........

Read - ET

Rajan's effect on rupee 'a little bit of hype': Arvind Virmani

....... "I had said that what people were talking about the Raghuram Rajan effect really applied to the rupee above 65 because that was a overshooting and it had to be corrected and he [Rajan] did it very effectively. I think beyond that it was a little bit of hype."...........

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Bankers briefed on joint liability groups

......NABARD assistant general manager A. Parthiban said under the JLG form of lending to which the Reserve Bank of India listed as priority, the credit needs of poor people for taking up micro economic activities could be supported without much of hassle for security. At the same time, lending for JLGs would qualify as ‘weaker section lending’ under the priority sector advances for the bankers..........

Read - The Hindu

Take tough stance against defaulting Corporates, FinMin advises PSBs

.........In order to contain bad debts, the Finance Ministry has advised public sector banks to take a tough stand while sanctioning fresh loan to the corporate houses in case any of their special purpose vehicle (SPV) has defaulted. The move, Finance Ministry is of the view, will help check rising bad loans which has touched a high of Rs 1.83 lakh crore at the end of June quarter...........

Read - The Hindu

Dr C Rangarajan bats for Financial Inclusion at CII F&I Summit

“There is a dire need for a robust and efficient banking system to efficiently fulfill the needs of all the sections and sectors of the economy to fill the existing gap especially in rural India", emphasised Dr C Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, Government of India, while addressing the 3rd Finance and Investment Summit organised by Confederation of Indian Industry (CII), here today. Addressing the 'myths' associated with financial inclusion, Dr Rangarajan further highlighted that, with appropriate financial products, innovation, change in mindsets, technology and partnerships, financial inclusion is a viable business model and should not be treated as a CSR obligation.......

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State Bank of India: Corporate lending zooms, but stressed sectors are a worry

.....While SBI has witnessed lower slippages during the September quarter, consistency in performance will be critical given its high exposure to stressed sectors. The non-performing assets now account for a fourth of the total restructured book, which is indicative of higher risk on the restructured assets.  Hence, stressed assets still elevated at nine per cent of loans, remain an overhang on the SBI stock..........

Read - HBL

SBI not to merge any associate bank this fiscal

........Arundhati Bhattacharya, the incumbent SBI chief, said, “We need to do a little more consolidation on our side before we take that (another bank) on. It is not off the table, but at this point we need to pay attention to what we are doing in a better manner.” A top executive at the SBI said that there is a new chief at the helm and priorities change when a new person assumes charge. Another reason why the associate bank merger has been delayed could be because the country’s largest lender is grappling with higher staff expenses.............

Read - HBL

Liquidation of Anyonya bank's movable assets begins

........A merger proposal with Maharashtra-based Saraswat Cooperative Bank fell flat with a section of Anyonya Bank's staff members stating that they were not taken into confidence for the merger and even relayed this to the Saraswat Bank. Following this, the Saraswat Bank pulled out of the merger and intimated this to the RBI as well. The bank that was once the city's pride and touted to be Asia's first cooperative bank went into liquidation in 2010........

Read - TOI

PFRDA chief Yogesh Agarwal quits, govt appoints Anup Wadhawan

......"Yes, I have put in papers. I will not comment on reasons," Agarwal said outside the Finance Ministry here. Agarwal, who had one and half years more to go as the PFRDA chairman, resigned within days of his name not being included in the selection panel for shortlisting of whole-time members of the pension fund regulator by the Finance Ministry..............

Read - IE

Do Not Let Fraudsters Spoil Your Cover Story

.........Hi, Irda has found out that your current insurance policy is giving you poor returns. As one-time relief to you, we are allowing you to surrender your existing policy and shift to a better product. You just have to pay a nominal fee for this. You also will have to submit some documents...  Many insurance policyholders have been getting similar calls from representatives of the Insurance Regulatory and Development Authority for a while now. In fact, the insurance regulator was forced to issue a public alert recently, cautioning policyholders against falling for such sales pitch by the so-called ‘Irda representatives’..............

Read - ET

NPS : Back to the Beginning

We have been through a long detour on the National Pension System (NPS). In the decade that elapsed until the law was passed in Parliament, many things have been done that were expedient. Now that this phase is behind us, it is time to go back to the spirit of the NPS. This involves a single simple system, harnessing economies of scale, using auction-based procurement and waging war against fees and expenses...........

Read - ET