RBI chief cautious, sees brighter future

The good news for India Inc and all borrowers is that there will be no interest rate hike or further policy-tightening measures if inflation stays on its southward journey along the intended “glide path” laid out in the Urjit Patel committee report.............

Read - Deccan Chronicle

Unexpectedly as Expected, for Once

............It is interesting to note that after seeming to endorse a monomaniacal form of inflation-targeting as recommended by the Urjit Patel report, the RBI is taking a more nuanced approach even to its preferred measure of inflation, the combined consumer price index. It will not give in to the statistical guile of low inflation over ..........

Read - ET

‘Loose fiscal policy calls for tight monetary policy’ - Charan Singh

............"The Monetary Policy has both positives and negatives. The positive  component is that interest rates have not been raised and term repos have been encouraged. Further, Inflation targeting has been put on hold. The negative components are that too much importance is being accorded to prices of food and vegetables, no measures have been announced to revive growth in industry; no mention of improving the NPAs, or credit to the.....................

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Steps to make RBI’s monetary policy transparent

........In particular, the yearning for and excitement about decisive governance could easily translate into activist fiscal policy of the pump-priming variety. In such a scenario, the central bank may have little choice but to hike rates again to preserve its credibility. In other words,.........

Read - Mint

Why Raghuram Rajan’s battle is far from over

.........the Indian economy is now far more stable than it was in recent years, thanks to the gradual reduction in inflation as well as lower risks to economic stability. That gives Rajan some breathing space. However,..............

Read - Mint

The Reality of Financial Inclusion

Financial Inclusion means the inclusion of the poorest of the poor into the banking stream. It was introduced after the recommendations of Khan Commission set up by RBI in 2004, with the aim of extending banking facilities to the poorest of the poor. The benefit may be seen when looked at the expected benefits like Electronic Benefit Transfer wherein social payments to common man can be made directly. The concept was novel and ..............

Read - Greater Kashmir

El Nino weather phenomenon may have a bearing on inflation: Reserve Bank of India

..........."It's not a given that El Nino will happen and it's not a given that food production plummets. If food production plummets, it is not a given that inflation across the board will be high...I don't think at this point we can anticipate precisely what will happen," 

Read - ET

Search panel recommends Mundra for RBI Deputy Governor post

The search panel headed by RBI Governor Raghuram Rajan is believed to have recommended the name of Bank of Baroda chief S S Mundra for new RBI Deputy Governor in place of K C Chakrabarty who has opted to leave the central bank ahead of his tenure. ...................

Read | Business Standard

Justice delayed is justice denied..............

"If Government rules are brought in in support of updation, we have to accept that updation can take place only once in 10 years.  Shri Donde, quoting the late Governor, Shri R..N. Malhotra, has also agreed with this point. The rationale for updation of pension is that pensioners who had retired in a particular grade (regardless of the date of their retirement) have to be treated equally and paid the same amount of pension. If pay revision takes place,say, after 5 years, employees who retire after this pay revision would have to be paid pension on the basis of the revised pay which would inevitably result in an invidious distinction between pensioners (who had retired in the same grade) if updation of pension does not also take place after the pay revision. This is the reason why pay revision and pension updation have to go together and can take place only with the periodicity of 10 years. Furthermore, I had also mentioned in one of earlier mails that if the RBI have counted certain allowances for 'pay' and accordingly also for retirement benefits which are not in alignment with the Government rules, we have no alternative but to fall in line with the rules in the Government. 

I agree that it is irrelevant (also sheer arrogance)  on the part of the Government to bring in the issue of rationalisation and review of 'perks' of serving employees while discussing the issue of updation even while some of us may legitimately opine that these 'perks' have gone a little far in recent periods for an organisation like the Central Bank of the country ( which is not a commercial organisation). Governor, with his formidable stature, standing, intellect and skills in argument ( two famous books which he had authored are master pieces and a delight to read)  would have to impress on the Government this point and insist on this issue being delinked from pension updation and taken up separately and discussed. I am sure he would do it and hope he would do it immediately. Finally,as all of us know, time is of the essence for very obvious reasons and hence implementation of updation of pension cannot brook any further delay!! "

 - Forwarded by Shri A.Chandramouliswaran

Also read - TOI Forwarded by Shri L.R.Parab

Poll squad detains RBI trucks carrying Rs 5 cr suspecting bribe for votes

An over-enthusiastic election squad detained 7 RBI trucks carrying Rs 5 crore in Rs 5 coins heading from Kolkata to Chennai, early on Monday. The squad comprising police and revenue officials suspected the money was meant to bribe voters. The truck was finally released following the intervention of senior RBI officials.............

Read - Bangalore Mirror

Employee-benefit provisioning to hit public sector banks hard

...........While PSBs in the first nine months have charged additional R4,250 crore to income statement towards amortisation related to enhancement in gratuity limit and re-opening of pension option for existing employees (in line with RBI’s February 9, 2011, circular); some banks like SBI have made provision of R1,800 crore towards additional pension liability. PSBs have also made additional provision of nearly R3,300 crore in the nine-month period on ad-hoc basis for wage revision effective November 2012..........

Read - FE

RBI says United Bank problem one of governance, not ownership

............."All issues point towards corporate governance. We have written to the government to take a set of steps to improve corporate governance and it is not only for UBI but the entire banking system as a whole," .....................

Read - ET

.......“We haven’t conducted any probe. It is the bank chairman who wrote to the governor as well as the FM, saying that, at her bank, accounts are not classified as NPAs and requested the RBI to go for a forensic audit.” ........

Read - FE

Customers may be spared from keeping minimum balance in savings accounts

Bank customers may be spared from the pains of maintaining a minimum balance in savings account as Reserve Bank of India has directed banks to do away with the practice of levying penalty for non-maintenance of it. 

Read - ET

RBI open to merger of banks: Rajan

..............."It's better that the banks themselves voluntarily decide where more value could be created if they merge. All I am saying is that we are open and there is room for both bigger banks as well as smaller banks. So, what we are saying is that we will be happy to consider if banks decide (to merge),".....................

Read | Business Standard

RBI wants govt to pare stakes in banks

.....Stressing the importance of granting complete autonomy in the day-to-day operations of public sector banks so that these could effectively compete with their private sector peers, RBI said such autonomy was contingent upon the government reducing its stake, especially at a time when the Centre was resorting to borrowing for capital infusion in these banks................

Read | Business Standard

Contrasting view on PC screen

.......Chidambaram today went on to criticise his nominee for the RBI governor’s job — Raghuram Rajan — terming his seeking of a clearance from the Election Commission for the new bank licences as sending a “wrong signal” and a case of “playing it safe”..........

Contrasting view on PC screen

EC clears way for RBI to issue new bank licences

.....“The Commission has considered your request seeking guidance of the Commission whether it would be appropriate for you go ahead with the announcement of in-principle approvals for Banking licenses in view of the current enforcement of the Model Code of Conduct,”...............

Read - Mint

On tap licences first for niche banks, then for universal banks: Rajan

............."This will allow people to allow banking capabilities with relatively small size corporations, which will allow them to apply for full banking licenses down the line. So to facilitate and expand entry, we need to look at both on-tap licenses, which is examined regularly, applicants every few years and have differentiated licenses,"..........

Read | Business Standard

RBI temporarily suspends NBFC registrations

.........“These recommendations are being examined by the bank. Several changes to the regulatory and supervisory framework for NBFCs may be called for. Putting in place the required mechanisms is likely to take some time,”..............

Read - Mint

Finance Ministry against raising income tax exemption limit to Rs 3 lakh

The Finance Ministry has rejected a Parliamentary Standing Committee's recommendation to raise the income tax exemption limit to Rs 3 lakh and to adjust other slabs saying that it will lead to an annual loss of Rs 60,000 crore to the exchequer. It has however decided to reduce the age for tax exemption for senior citizens to 60 years from 65 years...........

Read - FE

Foreign Banks Face RBI Stick After Shunning the Carrot

......The RBI’s efforts are in line with other global regulators, which are trying to prevent any contagion effect from economic crisis such as that in 2008. But, foreign banks cite requirement like guarantees from the parent and restriction on dividend payout as impediments in creating local subsidiaries. They are also not happy with the rules on compulsory lending to the priority sector — such as........

Read - ET

Bankers ask EC to bar defaulters from LS polls

The All India Bank Employees' Association (AIBEA) has requested the Election Commission of India (EC) to bar and disqualify candidates from contesting the elections, if they or their companies default on loans to the banks...........

Read - Sunday Guardian