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Wednesday, June 4, 2014
FM lauds Rajan for 'balanced' policy
The FinMin-RBI equation
......A good understanding and relationship between the government and the Reserve Bank of India (RBI) governor is a prerequisite for the success of our economy. There should be clarity about their respective objectives. The finance minister is a generalist who is assisted by a team of specialists and, therefore, should treat advice from RBI with an open mind. Secondly...........
RBI policy: Delhi-Mumbai ‘accord’
With the new government at helm in Delhi, rhetoric from the finance minister has been rudiment and clear. That is, going forward, efforts will be towards reviving growth and containing inflation, while progressing on fiscal consolidation. Although requisite steps in this direction are yet to be taken, the yearning appears to be unprecedented. Complementary for setting up of monetary policy, the kind of realisation that the new government has shown towards tackling inflation has given RBI confidence that Delhi and Mumbai will work coherently towards the common goal...........
Reserve Bank’s policy: Leap of faith?
...........This is how the move towards targeting retail inflation with an unambiguously stated glide path came into existence from January. While the market is still trying to debate and weigh the pros and cons of such a move, it was a paradigm shift in India’s monetary policy history. This background is important to highlight that RBI has indeed managed to anchor expectations by infusing disinflationary impulses through its tight monetary policy in an economy that has seen a substantial loss of growth momentum over the past three years..........
RBI’s zone of comfort
....... Some analysts have seen an incipient dovishness in the monetary policy statement. They are mistaken. RBI has merely stated the obvious—that it will have headroom to ease policy in case disinflation is faster than expected. It has mentioned enough risks on the other side as well. Yet, there are signs of greater confidence. ........
Nayak committee reforms a must now
..........So, will the recommendations get accepted? The Committee has been fortuitous with timing, with the report being made public as a new government came in. Fiscal pressures mean that the government has little choice but to act. One can argue about the specifics or quibble about the sequencing or the eventual timing of such moves, but the government will have to grasp the nettle.
FinMin may not allocate more funds
.............The ministry reiterated banks should act tough on wilful defaulters. Options, including change of management of defaulting companies, financing of acquisition of bad assets by strong companies, were discussed. The ministry is toying with the idea of a separate statute for high-value wilful defaulters with special courts and time-bound disposal.
Govt mulls common law for all financial-sector regulators
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Lessons for UFBU and Aam Banker from 2014 Elections
.......I too thought of analyzing the results from the perspective of Aam Banker based on their plight since 10th BPS has already overdue for a long time now. The results seem to have thrown all the constituents of UFBU into disarray and they are so shell shocked that hardly any one of them have spoken a word about the whole event. The Hindi proverb “saap soongh lena” appears to be true for the current situation.........
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15 months on, Rupee bank merger hangs in balance
Fifteen months after the Reserve Bank of India (RBI) suspended the Board of Directors of the Rupee Cooperative Bank and imposed strict regulations on it, plans to merge it with another bank have not made much progress. A proposal to merge the bank with Saraswat Bank is with the RBI, the move to merge it with Allahabad Bank is stuck pending a due diligence report and merger talks with Bank of India has not made any progress.......
RBI में ग्रेजुएट्स के लिए निकली नौकरियां
जर्व बैंक ऑफ इंडिया (आरबीआई) में ग्रेड बी ऑफिसर पद पर 117 रिक्तियां जारी की गई हैं. आवेदन करने की अंतिम तिथि 23 जून, 2014 है.
Seminar on Imperatives of Basel III Capital Requirements
.......The objective of the seminar is overall in-depth understanding of the Basel III guidelines and its challenges and to equip CMDs/CEOs of banks to implement the transitional requirements, plan their capital requirements and manage the impact on their businesses........
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Economic Survey may bear Virmani's mark
.............This time, advisors may take cues from Virmani, Kaushik Basu’s predecessor at the finance ministry. In the 2008-09 survey, Virmani had suggested various big-bang reforms to the government of the day — United Progressive Alliance-II. These included suggestions on fiscal sustainability and tax simplification, financial market, energy, improving the investment environment, public goods, institutions, education and employment-generation. On fiscal sustainability and tax simplification, the survey had suggested phasing out surcharges, cesses and transaction taxes. An official, however, said this time, the nature of reforms suggested might be quite different as the economy had changed a lot since then.........
RBI moves away from sector-specific refinance
.............The RBI said that this was “in pursuance of the Dr. Urjit R. Patel Committee’s recommendation to move away from sector-specific refinance towards a more generalised provision of system liquidity without preferential access to any particular sector or entity.” “This should improve access to liquidity from the Reserve Bank for the system as a whole without the procedural formalities relating to documentary evidence, authorisation and verification associated with the ECR. This should also improve the transmission of policy ..........
RBI policy review: An ambiguous turn
..........One of the maxims of central bank communication is that each word should be chosen with care. Thus, changes in policy statements, particularly on guidance, are always well thought out and tightly scripted. By playing fast and loose with its guidance, RBI risks introducing ambiguity in the minds of stakeholders and undoing some of its good work on clarity and transparency.......
RBI holds repo rate as inflation woes persist, cuts SLR by 50 bps
.....“The move indicates that RBI is working in independent fashion, regardless of what pressure are supposedly been put by the government,” Madan Sabnavis, chief economist at Credit Analysis and Research Ltd, a rating agency. “The RBI is firm on its stance of inflation control.”..........
Signs of normalisation
.............the RBI has stuck to its guns, asserting that it will not back down from its fight against inflation. This may, of course, get the government's back-up, but, as the RBI governor has made very clear, he alone decides monetary policy. The government would be well-advised not to go down the route of confrontation. It is far more important to begin to quickly address the supply constraints that are combining to keep inflation high. Only if the responses are visible and credible can the RBI justify a reversal in its position. Of course,..........
The RBI Can Do Only So Much
.......The central bank tightened rates constantly through 2013, as prices soared; it can now afford to take a break. Governor Raghuram Rajan has hinted that if inflation slows dramatically , he would consider cutting rates, which could boost investment and growth, which await firm, decisive action by all parts of the government. However, there are two problems.........
RBI’s SLR cut is symbolic of better days ahead
.....The cut in SLR also illustrates the RBI’s confidence in the new government’s commitment to fiscal consolidation. In the current fiscal year, the government is set to borrow a record Rs.5.97 trillion (so far Rs.1.52 trillion has been raised from the market) after borrowing Rs.5.64 trillion last year andRs.5.58 trillion the year before. These are all ........
Rajan holds rate, waits for govt to push growth
........Finance Minister Arun Jaitley complimented RBI for striking a balance between growth and inflation, a stance in sync with that of North Block. He promised to address the inflationary concerns, particularly on food prices, through supply-side measures and fiscal consolidation. He also assured the government would strive to revive the investment cycle for higher growth and employment generation. “RBI has chosen to maintain a balance between growth and inflation while keeping the policy rates unchanged,” Jaitley said on his Facebook page. He reiterated this was also an aim of the government. “It is (also) a priority for the government to maintain a balance between growth and inflation.”............
RBI makes the first move
......... But since RBI talks of the possibility of stronger government action on food supply, this means it is confident the government will dump wheat and rice stocks from FCI to kill foodgrains inflation; RBI seems to be more sure about better fiscal consolidation this time around, something finance minister Arun Jaitley has talked about..........
RBI should wait until budget before cutting rates: C Rangarajan
...."The policy has been very much on expected lines. It is prudent and wise to wait a little longer before taking any decision on lowering the interest rate. "We do not know very much about what the monsoon is going to be. The new Budget is yet to be unveiled and therefore, the decision to lower the interest rate will have to come after some of these events are over with," ......
RBI seeks better transmission of policy rates
........By reducing the statutory liquidity requirement and funds provided under the export credit refinance (ECR) facility, the RBI has gone a step further to align interest rates across different segments to market-determined rates. The objective — as stated in the Urjit Patel Committee report — is to facilitate the transmission of policy rates across segments. For borrowers this means quicker pass through of policy action on banks’ lending rates over the long term.................
Bankers see consistency in Rajan’s rate moves
While the status quo on interest rates was on expected lines, RBI Governor Raghuram Rajan’s surprise cut in Statutory Liquidity Ratio has been welcomed by bankers, who see consistency in policy rates in the medium and long terms...........
Will SLR cut lead to lower lending rates?
......This move, according to analysts, could infuse about ₹30,000-40,000 crore into the banking system. But whether this will have any impact by way of lower lending rates or more credit to the so-called “productive sectors of the economy” remains to be seen. Anis Chakaravarty, Senior Director and Lead Economist at Deloitte India, said: “This is a calculated move by the RBI and should give a boost to growth.” However, bankers seem to disagree that such a move will have any significant impact on lending as most banks have already deployed funds in excess of the statutory requirements in government securities. .......
Things getting better for the economy? Here's what RBI's Raghuram Rajan thinks
Are green shoots of economic recovery round the corner? Are there any indications that the major factors that have worried both the Finance Ministry and Reserve Bank of India (RBI) have moderated? RBI Governor Raghuram Rajan certainly feels that the prospects of economic recovery look better.
Inflation not easing soon; rate hike likely by Dec: Analysts
...Governor Raghuram Rajan, while leaving all key rates unchanged, reduced the statutory liquidity ratio (SLR) by 0.5% to 22.5%, thereby injecting about Rs 40,000 crore into the financial system. Analysts described the RBI actions as "dovish". "If the economy stays on this course, further policy tightening will not be warranted," Rajan said......
Bandhan to go for listing after three years of banking
........."As per RBI norms, Bandhan Bank will get listed after three years of operation as a banking entity," Ghosh said. "The RBI has given us 18 months to start banking operations. .........
RBI approves re-appointment of KVB MD
The Reserve Bank of India has accorded its approval for re-appointment of K. Venkataraman as Managing Director and CEO of Karur Vysya Bank (KVB) for a further period of three years from June 1, 2014 to May 31, 2017, the bank informed the Bombay Stock Exchange on Tuesday.
The Hindu
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