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| Governor Raghuram Rajan interacting with media at Shimla |
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.
Friday, May 16, 2014
RBI to launch plastic notes next year: Raghuram Rajan
Four challenges for new government: Rajan
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......“Growth, fiscal deficit, current account deficit and inflation — these are the four biggest macro-economic challenges and we have to work on all of them. They are all inter-related,”......
An agenda for the first hundred days - Dr.S.S.Tarapore
.....The RBI governor Raghuram Rajan, last week in Switzerland, unequivocally stated that he sets out the monetary policy and the government has the power to fire him; he did indicate that he was happy to talk to government but ultimately the interest rate is set by him. This statement is going to go down in history as the locus classicus on RBI-government relations. The kind of autonomy the RBI needs is headroom to effectively execute monetary policy within transparently laid down objectives..........
Financial Inclusion still a challenge for the country: DGM RBI
Jowai, May 15: : T. Lhungding Deputy General Manager of Reserve Bank of India, Shillong branch said that financial inclusion is still a challenge in India. Elaborating on the subject Lhungding also said that in spite of the economic growth of the country, yet a large section of the rural population in the country are still not included in the economic growth. We need to bring the rural population and the poor section of the society in the scheme of things and to begin with they need to at least have bank account in any bank in the country concluded Lhungding. Having a bank account is only the beginning of financial inclusion of the citizen of the country...........
Governor's reply to a 10-year-old girl
..............Please do visit Reserve Bank of India whenever you plan to visit Mumbai, to ascertain how the Reserve Bank of India is managing the country's foreign exchange reserves.............
ये क्या! 'आरबीआई की महिला अफसर' ने युवक को ठगा
....शिकायत के बाद पुलिस ने जांच कर इस संबंध में मामला दर्ज किया गया है। नखड़ौला गांव के युवक ने उमेश कुमार (बदला हुआ नाम) के पास तीन अप्रैल को एक कॉल आया। फोन करने वाली महिला ने अपना परिचय आरबीआई की फॉरेन एक्सचेंज विभाग की चीफ जनरल मैनेजर कविता शर्मा के रूप में दिया।........
Read - Amar Ujala
‘Stop, look and proceed’
My View on "A window of opportunity":
This is a timely reminder to both the central bank and GOI. A change of guard in New Delhi is an opportunity to ‘stop, look and proceed’ on all policy issues affecting India’s future. Financial sector is important, maintaining the positive notes in the market is essential, but equally important and significant is ensuring a smooth transition from pre-May 16 rigidities to post-May 16 scenario instilling confidence across divergent sectors and geographical areas which are at varying stages of development and therefore have different priorities. Such an approach will demand a thorough understanding on the part of those who will be taking charge of governance in Delhi, of the sources and uses of country’s resources, mapping them irrespective of their ownership and ensuring appropriate measures for preventing further leakages. Forex reserves maintained by a country is one of the indicators of a nation’s financial strength and therefore building up reserves should be an ongoing process. RBI and GOI should also bring transparency in accounting as also standardisation where necessary and preservation of precious wealth lying idle with various organisations including palaces, temples and other religious bodies.
No professionalism in PSB Boards
My View on "PSU bank boards reasonably professional":
There is hardly any professionalism in PSB Boards. If it were there, there would have been better NPA management. When inconvenient and embarrassing questions are posed men like Pratip Chaudhary find it convenient to transfer to politicians. If there was professionalism where was the need for Pratip to clean up the balance sheet as soon as he assumed charge in the public glare? If there was professionalism as claimed by him how could King Fisher corner Rs.4000-odd crores and push it to NPA books? If it is tens of lakhs or tens of crores, accountability could be fixed. When it is in thousands of crores how can accountability be fixed? Even if fixed, how can any punitive action follow with only a small fraction held in PF or pension funds? How many times the Board members raised questions on the credit sanctions and NPA management by the Bank and what actions were reported? The Board has representatives from the Fin Min and RBI sitting and the workmen directors ornating the Boards? For once, Nayak Committee laid bare facts and offered solutions that are practical although privatization by itself is no panacea as demonstrated by the TBTF when the Fed Reserve had to come to rescue and in UK nationalization of a few banks had to be resorted. The chemistry of banks needs certainly to be looked into with great care and the time is ripe.
- Dr.Yerram Raju
Political banking
...........However, there is a need to end the era of political banking that has been flourishing since the nationalisation of banks. The system of appointing CEOs and directors on the boards of listed PSBs by the government needs to be brought on a par with that of private banking companies. The government, as the majority shareholder, may exercise its control over PSBs through the board, instead of meddling directly in the management.
RBI must exit bank boards
........The committee rightly recommends that RBI should step down from the board of banks, which makes a lot of sense. Having a regulator on the board of the regulated actually makes the regulator a part of all actions, which raises ambiguity when it comes to inspection as all decisions have implicitly been approved by the regulator. However, in the same breath, it also recommends that the directors on board of old private banks should be approved by RBI. Given that we are trying to keep the government and RBI away from the functioning of banks, this step does look a bit out of place..............
`Only a Resolute FM can Help PSBs Deliver
......... “So, you need a purposive board. You need talented and skilled professionals to sit on boards. There are many such people on boards today, but if you talk to bankers today, such people are small proportion of these boards. You don't have independent board members today, it's a complete violation of the listing agreement,'' ............
Read - ET
Is India Ready to Relinquish Control of its State-Owned Banks?
...Still, New Delhi has been reluctant to relinquish control. The state-run banks account for no less than three-fourths of the lending in the country. Politicians and bureaucrats sometimes try to use them to promote their causes, a benefit they do not want to give up. State-run banks have two masters – the Finance Ministry as well as the Reserve Bank of India. In addition to the regulatory orders from the RBI, they regularly receive missives from the ministry to push the social agenda of the government. In the period from October 2012 to January 2014, for example, the Finance Ministry issued 82 circulars to public sector banks, the RBI panel report said. “It is a fundamental irony that presently the government disadvantages the very banks it has invested in,” the report said......
Lenders Should Come Under Cos Act, Says Chief Of RBI Panel On Corp Governance
..“The Bank Nationalisation Act of 1969 was necessary at that time and its enactment was for government ownership of the banks. But 45 years after the Act was promulgated, it is important for us to ask if this is the best legislative structure under which the banks should now function. For a long time, we had an unreformed Companies Act, but in 2013 we got the new Companies Act which creates good governance structure at the level of the board.” According to Nayak, one of the perspectives that guided the panel was that there should be only one kind of bank licence irrespective of ownership and all banks should come under the Companies Act. “.......
Read - TOI
Esha Media Research aims to monitor 200 channels in next 2 months
...“Private sector banks enjoy a higher multiple in terms of price to book value over their public sector cousins and thereby a better valuation on the stock market. Our monthly report for April also endorses that the private sector banks have been able to occupy more TV media space than public sector banks, deriving better perception points,” he added. The research report further found that Reserve Bank of India (RBI) occupies 22 per cent space of the total news in the banking sector on TV. And RBI’s credit policy governs the news coverage. “Reserve Bank of India governor Raghuram Rajan occupies more space than the vocal deputy governor K C Chakrabarty,” the research further added........
Investments in RIDF can be counted towards priority sector lending: RBI
............RBI has now allowed them to include the outstanding deposits in RIDF as part of indirect agriculture lending. Accordingly, the deposits as on 31 March under RIDF and a few other funds with Nabard will be treated as part of indirect agriculture loans and will count towards their overall priority lending target, RBI said in a notification. Nabard has an RIDF outstanding of about Rs.75,000 crore on 31 March..............
RBI, Finance Ministry talk contingency plan for May 16
The Reserve Bank of India (RBI) has discussed contingency plans with the finance ministry and the stock market regulator to deal with any excessive volatility from election results to be unveiled on Friday, Governor Raghuram Rajan said on Thursday. The RBI will also be ready to deal with any volatility in the rupee, Rajan said during a news briefing after the RBI's board meeting in Shimla.....
After Two Years of Firefighting, PC Logs Out of North Block
........Soon after that, he had to battle another crisis -a seemingly inexorable slide in the rupee that was triggered by Ben Bernanke's comments about the US Federal Reserve tapering its stimulus. He put in place measures to rein in the ballooning current account deficit curbs on gold imports and plans to shore up reserves. He was joined in battle by Raghuram Rajan as the new governor of the Reserve Bank of India. Rajan took over the post in September last year after serving as Chidambaram's chief economic adviser..............
Will the next FM rise to the challenge?
............As the banking system is the backbone of the economy, the government will have to recapitalise state-owned banks adequately and make sure their stressed assets come down. Their needs are assessed at Rs 5 lakh crore by 2019. As the government cannot meet the financial needs of the banks from its budgetary resources, the finance ministry is evaluating options such as a special purpose vehicle, a holding company and employee stock options. It should consider the report of an RBI panel which talks of divesting stakes in state-owned banks to less than 50 per cent. It may also look at consolidation of public sector banks which UPA could not do. To achieve economies of scale, it is imperative and bank unions should be taken into confidence..........
Modi impact on Rupee
..........If a Modi government comes to power, the belief is the R will move up to levels of 57-58. Much of this is predicated on FIIs remaining bullish on Indian markets—since mid-February, they’ve bought $8.6 billion worth of stocks and bonds. In the short run, the R could well surge to those levels, but it is likely to retreat thereafter. For one, while RBI may not explicitly express its views on where the R should be trading, the central bank’s commentary suggests it concurs with the finance ministry's view that 60-62 is reasonable...........
The inflationary pincer
.........Does this mean, then, that it should lower rates to stimulate growth? Unfortunately, tempting as this inference may be, it is not necessarily correct. While lowering inflation may be proving to be a huge challenge, provoking it to accelerate will turn out to be surprisingly easy. The first sign of the RBI having lowered its priority on inflation fighting could trigger a spiral, which, historical experience tells us, is extremely difficult to contain. Frustrating, no doubt, but this is the price that the economy must pay for ..........
RBI's best tool to control inflation is interest rate: Rajan
..."We do not use rupee as the way of managing inflation. We are not trying to rely on a particular level of rupee to help us on inflation front," he said. He said sometimes it can prove dangerous if "you become overly reliant" on certain level of rupee. Instead what RBI has focused on is creating conditions inside the country for reduction in inflation. "Thus far we feel comfortable with the pace of progress. Of course, there are blips up and down...,"
Mayaram upbeat about fall in inflation but cautions on El Nino
..."We are encouraged that the inflation numbers are coming down... On the whole at the moment, it appears that we are on track as far as inflation is concerned...(it is) something to smile about,"......
SBI opens RASMECC in Shillong
.......The RASMECCC is a is a specialized loan processing, sanctioning and maintenance hub, which deals with the Personal and SME loans of 21 city based branches, handling more than 20000 loan accounts including big branches in the state. The centralization of loan processing, sanctioning and maintenance enables the bank to give better customer service, besides.................
Why you must thank RBI for ending penalties on pre-paying home loans
......This clearly shows that pre-paying a loan benefits you tremendously. Now with no pre-payment penalty, the amount you save is even higher. For the above example, if a pre-payment penalty of, say, around 3 percent was still applicable on the sum of all pre-payments made, the prepayment fee would have added up to Rs 7,800. But, with the apex bank’s new move, you can even save this amount.
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