...More importantly, psychologically, it is more frustrating to be unemployed rather than facing inflation. The present tight monetary policy has not been successful in arresting the price level because it is based on a wrong premise—rising food prices—which cannot be tamed by rising interest rates. Rather it shall be helpful to lower the interest rates and provide positive impulses through forward guidance and ushering certainty in policy path to revive growth and investment...............
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.
Tuesday, December 10, 2013
The Economy of India: Why Not to Take a Balanced View
......Both the government and RBI are expecting the CAD to be below $56 billion in the current fiscal compared to the record high of $88.2 billion, or 4.8 per cent of the GDP last fiscal. The government has taken several steps, including hike in gold import duty to 10 per cent and restrictions on import of gold bars and medallions, to restrict CAD. It has also taken measures to boost exports. A very recent study.........
Raghuram Rajan attributes current economic woes to domestic factors
.............Addressing investors at an Citibank event in New York, Rajan said economy has slowed to below 5 per cent from an average of 8 per cent between 2002-2012, mainly on account of domestic factors............
Read - ET....
Raghuram Rajan expects a spending squeeze as India aims to cut deficit
..........The Governor reiterated his commitment to the five pillars to improve the financial system. These include clarifying monetary policy framework, strengthening the banking structure through entry of new banks, broadening financial markets, moves towards financial inclusion, and to improve systems to deal with distress faced by financial institutions and corporates. Rajan blamed the financial stimulus for leading to an over-heated economy, high inflation and wage growth and consequently...........
Read - ET.....
Prepared for the taper
......For India, fortunately, the swap agreement that RBI put in place ensured $34 billion more came into the economy and, more importantly, in recent months RBI found a way to remove a very significant part of the demand for dollars—$164 billion in a full year—from oil importing PSUs from the daily market for foreign exchange. While RBI managed to slow down the depreciation of the rupee by selling dollars directly to oil PSUs and then entering into swap agreements—this ensured forex reserves didn’t fall—with them for a date in the future, the markets always felt this would worsen matters when .......
Raghuram Rajan says inflation still major worry for RBI
.........High inflation “is and will remain the key priority of monetary policy” even as there is a need to manage inflation “with an eye on the economy, so that you don’t kill growth”, said Rajan speaking at an interaction with institutional investors in New York, organized by Citigroup, on Friday night. Since he took charge from D. Subbarao on 4 September, Rajan has raised the key rate twice from 7.25% to 7.75%............
The microfinance sentinels
......In 1998, the National Bank for Agriculture and Rural Development (Nabard) set up a task force on Supportive Policy and Regulatory Framework for Microfinance, which found that microfinance institutions (MFIs) were an important vehicles for delivery of credit to the self-employed, particularly women, in rural and semi-urban areas. It suggested setting up a special cell within the Reserve Bank of India (RBI) to liaise with Nabard and MFIs to augment the flow of credit to this sector. The task force recognized the need for a mechanism of...........
RBI told to keep industry and banking separate
.....“Banking being a highly leveraged business involving public money and public welfare, the Committee are of the considered opinion that it will be more in the fitness of things to keep industry and banking separate. The Committee, therefore, desire the Government/Reserve Bank of India to review the licencing guidelines accordingly,” the report tabled in Parliament said...........
RBI’s Raghuram Rajan plans consumer-price linkers to lure savings
.......The new securities will help central bank Governor Raghuram Rajan boost the savings rate from a 2008 low. Better protection against living-cost swings may limit demand for bullion as a store of value in the world’s biggest gold-consuming nation and cut the government’s reliance on import curbs..........
Welcome move
......... The new regulations allow foreign institutional investors to buy and sell these contracts with minimal restrictions. Since the RBI recently permitted foreign investors to hedge their currency risk through exchange traded currency futures, they can now protect themselves against interest rate and currency volatility, reducing the need to rush to the exit door in volatile times. While these changes are welcome,........
We are making a tectonic shift from wholesale banking to retail banking: Arun Kaul
........ RBI's credit policy is largely directed by inflationary expectations. We expect the winter crops to be good because of the good monsoon. We have already seen onion prices coming down and expect vegetable prices to fall further after December. I will like to wait and see what happens in RBI's credit policy in December. But clearly, my view is inflationary pressures will come down going forward and the central bank will take appropriate steps........
Bank unions to go on strike on December 18
...........Bank unions have called a one-day strike on December 18 to protest against the decision of the Reserve Bank of India to accord national treatment to foreign banks. “The United Forum of Bank Unions (UFBU) have given the call for the all-India industry strike,” Canara Bank said in a filing to the BSE...........
Bangkok fast emerging as safe haven for fake Indian currency
....Pakistani nationals based out of Thailand have used this South East Asian country as a safe haven to transport high denomination Indian currency into the country. Mostly, the fake Indian currency is transported via businessmen, tourists and couriers visiting Thailand on leisure or business. These Pakistani operatives having links with terror outfits as well as Inter Services Intelligence (ISI) also orchestrate a well-charted smuggling racket in fake currency into India...........
RBI Claims It Reaches Indian Villages for Financial Literacy
......Some of the popular comic books brought out by the department of communication are Money Kumar, Raju and the Money Tree and some films which very simply impart messages on financial education to children. The department of communication also hosts groups of school children and explains the working of RBI to them and imparts simple financial concepts to them...........
Appoint young guards at ATMs, banks told
.........As a first step , banks have been asked to place 24-hour security in place. As most ATM centres are guarded by elderly men, banks are specifically advised to appoint youngsters in their place. Burglary alarms/smoke detectors and infrared sensors for cash chests should also be put in place........
After ATM security headaches, banks face uproar for chargeback problems
After security concerns at ATMs, the Reserve Bank of India has now flagged the problem with charge-backs, that is, money debited from accounts without cash dispensation at the time of withdrawal. Delays in returning money for disputed transactions have also come under RBI’s scanner. The numbers of complaints about chargeback at Automated Teller Machine (ATM) are substantial - about 3,000 a day (that is 90,00 per month)– according to National Payments Corporation of India (NPCI) managing director and chief executive said A P Hota.........
Read | Business Standard
RBI has second thoughts on Indian Tier 1 structures
...The RBI has told Bank of India not to include a “temporary writedown and write-up” feature on a planned issue of Additional Tier 1 capital securities, sources said. The bank is the only Asian regulator to have explicitly allowed the reinstatement of capital securities but its recent move adds to confusion surrounding its position, potentially complicating efforts to bring the first deals to market.............
Enlarging India’s capital choice options
........The Reserve Bank of India (RBI) has had some success in the past acting counter-cyclically against lending in the housing market, and that is probably a prerequisite for removing investment restrictions. That said, the cyclical forces in the mortgage market were not so powerful and pervasive in India as in other countries that have been less successful at taming the boom-bust cycle so there is no room for RBI to rest on its laurels...........
RBI's operational guidance on novation to deepen derivatives market
..........As per the conditions laid down by RBI the transferor bank can novate a derivative contract only after the contract has been held by transferor in its books for a minimum period of six months for contracts with original maturity of up to one year, and nine months for contracts with original maturity of more than one year. But RBI said that this condition would not apply in cases where transferor bank is...........
Govt has not banned banks from selling gold coins: FinMin
............"The government has not banned banks from selling gold coins. However, RBI has prohibited import of gold in form of coins and medallions," Minister of State for Finance Namo Narain Meena said in a written reply to Lok Sabha last Friday. Seeking to reduce the import of gold, the Reserve Bank on August 14 had prohibited inward shipment of gold coins, medallions and dores without licence........
Burying all talk of a new normal
...........So instead of supporting the RBI in its feeble and belated attempt to rein in demand through raising interest rates, the Finance Minister, both the incumbent FM and his predecessor kept urging lower interest rates. The net result: inflation and worse, inflationary expectations, have got deeply entrenched. The latest household survey of the RBI shows .........
Read - ET
Govt okays SBI plan to raise Rs 9,576 crore via QIP in FY14
.........Raising of the capital would be subject to requisite approvals from the shareholders and the Reserve Bank of India, the bank said. The government will infuse Rs 2,000 crore in SBI this year and towards this it will issue preferential shares worth the same quantum to the government.........
Bank loans to SMEs and the reality
......In order to gauge this preference of banks conversations with a small business enterprise, often referred to as micro, small and medium enterprises (MSMEs) says it all. For a micro and small business, to get loan from a bank is nightmare. This has been happening in spite of dedicated MSME branches set up by various banks and MSME lending being a part of priority sector lending. RBI data in this regard is an eye opener. More than 92% MSMEs run their business on self-finance and have no source of institutional finance......
SBFCs can play much bigger role in financial inclusion: Sinha
Small Business Financing Companies (SBFCs) can play a much bigger role in financial inclusion in India provided they are treated differently in terms of opportunity and regulatory environment. For that, there is an immediate need for formation of an independent regulator to formulate framework for sustainable and better functioning of Small Business Financing Companies (SBFCs) that has been doing a wonderful work for promoting growth of small business in India, senior Bharatiya Janata Party (BJP) leaderYashwant Sinha said.........
Lenders find clothier to the nation doesn't have enought to cover itself
......The move came after Finance Minister P Chidambaram said while many companies were getting sick, their promoters remained rich. Indian banks have written off corporate loans worth Rs 1 lakh crore in the past 13 years, according to the Reserve Bank of India. Kasliwal did not speak to this newspaper when contacted over telephone. His office did not give his email address. A list of prominent defaulters published by the All India Bank Employees Association (AIBEA) last week identified S Kumars Nationwide as one of the top ones. The company owes close to Rs 3,000 crore to government-owned banks, it appears...........
35% tax slab for the rich
NEW DELHI: The new Direct Taxes Code Bill is likely to have a higher tax rate for the rich. The government, it is understood, is introducing a new income tax slab of 35% for annual income of over Rs 10 lakh. “ This is being proposed in lieu of the surcharge. Effectively, there is no change in the tax rate”, the official said.
FPJ
FPJ
BIAN adds first Middle East member
.........Also joining as new members are the Institute for Development and Research in Banking Technology, an R&D operation set up by the Reserve Bank of India, and Achmea, a Netherlands insurance provider. They will work with BIAN’s 42 existing members to build and promote a common enterprise architecture framework designed to resolve universal banking interoperability issues. “It is great to add three more key members to our growing global network........
Subscribe to:
Posts (Atom)