..............The RBI could have tightened further and then subsequently eased, but it appears to prefer - correctly, in my view - an extended neutral stance. The recent decline in the benchmark 10-year government yield because of the issuance of a new benchmark shouldn't be taken to contain any signal about the RBI's monetary stance. Unlike the June policy statement, Tuesday's review will also be complemented with a media interview with the RBI Governor Raghuram Rajan and his team, and a conference call with analysts. Consequently...........
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, August 5, 2014
Strategic reserves
In his first public statement after he took over as governor of the Reserve Bank of India in September 2013, Raghuram Rajan had said India needs to build a bulletproof national balance sheet if it is to withstand global financial shocks. The central bank has since then added nearly $45 billion to its foreign exchange war chest....................
Raghuram Rajan must prepare ground for a post-taper world
RBI governors have no option but to master the art of tightrope-walking. Regardless of what diehard inflation-targeters may say, the reality is central bankers have to strike a careful balance between price stability and growth while framing monetary policy. In that sense, Raghuram Rajan's position as he contemplates his third bimonthly policy statement tomorrow is no different from US Federal Reserve chairman Janet Yellen's. But there the similarity ends.............
Decoding RBI’s inflation dilemma: India may have to wait longer for a rate cut
.........The RBI, during the regime of Duvvuri Subbarao, has all along maintained that the RBI cannot be an inflation targeting central bank unlike those of countries like New Zealand and Chile. Rajan too has maintained the same stance and has refused to admit that he has embraced an inflation target, but in reality, the central bank has quietly moved to inflation targeting already. That’s where the problem lies............
Will RBI cut rates? It should!
.......But there might be a larger reason for Jaitley sticking to the 4.1% deficit target. It is to convince RBI that there is an additional reason to cut rates on August 5, and reason beyond the sharp and stable decline in inflation rates. So, will RBI oblige? The market certainly does not think so.........
Award for IVDP president
............The Award was conferred on Mr. Francis for his contribution in the field of social service since 1979. It carries a trophy, a citation, and a donation of Rs. 5 lakh to a charitable trust/NGO as per the choice of the awardee. Deputy Governor of Reserve Bank of India S.S. Mundra presented the Award to Mr. Francis........
The Emerging Big Picture
......The volume under review has twenty- one contributors out of which eleven are from the R B I family. Out of sixty articles thirty one are by RBI Executives – past and present. This includes four Governors, two Deputy Governors and this invests the book with special authority and importance. In a learned introduction, Dr. Kapila points out how after half a century of zero growth between 1900 and 1950, India grew at 3.5 per cent in the first decade of planned development. In the past two decades the growth rate doubled to 7 per cent. The peak growth was 9.5 per cent during 2005- 2008. However, it slumped to 6.2 per cent in 2011- 12 and further to 5 per cent in 2012- 2013. This could be the rate for 2013- 14............
Jaitley to address boards of RBI, SEBI on Sunday
.............The customary post-Budget meeting of the Finance Minister with the boards of the two regulators on August 10 is taking place against the backdrop of pick up in economic indicators after India posted sub-five percent growth for two fiscals in a row. The Reserve Bank will announce its third bi-monthly monetary policy tomorrow amid expectations that it may cut rates and take other steps to promote industrial activities. Jaitley was earlier scheduled to address the RBI board on Saturday........
Recruitment of ‘Specialist Adviser (Research) in Grade-F’
..........This is a newly created Specialist position for Research purposes. Since this is a leadership position, no further career progression is envisaged in the normal course for the position. Associated benefits are on ‘ín-situ’ basis only..............
Bandhan to hire most staff from rural areas
..............“We work predominantly in the rural areas, so it’s where we would be drawing most of our staff from. Close to 70% of our 57 lakh customers resides there and we wish to continue serving them. The reason is our staff need to have a through understanding of the need, culture and socio-economic environment of the people they would be serving if we wish to meaningfully contribute to our customers. Also, it is difficult to retain staff if we send urban people to work in rural branches thereby creating problem in staff retention while a village folk would be too willing to serve in an urban branch,”........
Bigger or smarter? Why SBI should divest its subsidiaries and not merge them
.........At some point in the future, when policy allows, the SBI should even consider selling its subsidiaries. Even now, it could consider retaining 51 percent and letting a private promoter buy a 10 percent stake and run the show. This way, it would get a bigger value for its stake dilution. Public ownership with privatised management is an idea whose time may have come.
The only argument one can see against SBI selling its subsidiaries is this: it may not want its own former subsidiaries to compete with it. But the point is this: competition is anyway going to grow. So this is not necessarily a great argument. This is the time for all three – the RBI, the government and SBI – to try out new ideas. The old idea of growing big is passé. Big may merely mean fat in future. The thing is to get smarter..........
Reshuffle on Cards for SBI Top Brass
..........State Bank of India is set for a major churn at the top after the government appointed two new managing directors in the bank, opening up the possibility of more down-the-line promotions. But the new government took time to promote B Sriram and VG Kannan as MDs which has delayed the entire process, an SBI official said, refusing to be named.............
The technology that banks use, can land you in trouble - Dr.T.V.Gopalakrishnan
............I think it would be better for the Bank to improve its services for domestic customers first, before it attempts to introduce/ improve its services to customers outside the country. The bank has a system to receive complaints and feedback, and these can be registered at various levels, but the fact remains that the replies are standardised from all levels and the complainants receive the same stereotyped replies. Knowledge of banking is alien to its operational level staff and the human touch and interaction cannot be expected of them......
Five free transactions from third-party ATM likely to come down to two
Saving account holders in the cities might soon have to limit their transaction from third party ATM as the number of free withdrawals is likely to come down to two from five a month, a daily newspaper has reported........
Where are the role models?
........... Does it need to stressed that the top echelons should become role models for the lower hierarchy? The arrest of Syndicate Bank Chairman and Managing Director Sudhir Kumar Jain and his accomplices proves that corruption at higher levels percolates to the lower level, which results in the common man suffering the most. Is it not time these ........
Govt Must Not Name Bank Chiefs
............The government should accept the RBI's suggestion to disassociate itself from the process to name heads of public sector banks, and give the job to an independent panel of experts. Appointments can then be fully delinked from political patron age. Two, the remuneration of public sector bank chiefs should be market linked. Now, their pay is far lower than the private sector, prompting a few to use unscrupulous ways to make money . Also, PSBs cannot attract and retain talent when their competitors pay more. This must change.........
Read - ET
Calling PSU banks to account
................. A scheme is reportedly being prepared, the goal of which will be to ensure that every family in the country has at least two bank accounts and access to a Rs 5,000-overdraft facility. On the face of it, this smacks of the old-style approach of using PSU banks for wider social objectives without regard to profitability. There is no doubt that financial inclusion is an important objective, but to achieve it we must devise strategies that rely less on target-setting and more on facilitating the adoption of technologies and partnerships that can significantly drive down the costs of delivering financial services. Meanwhile, ........
We will release names of bank loan defaulters, says AIBEA
...........Rather than recovering the non-performing assets, the Union Government, and Reserve Bank of India were attempting to cover it up through steps such as adjusting them against profits, and creation of Asset Reconstruction Company, said S. Ganesh, Erode unit general secretary of All India Bank Employees Association here on Saturday....................
How to deal with corrupt bosses of state-owned banks
............Yes, there are bank chiefs who are dishonest. They give loans to those who don’t deserve them and make money cutting such deals. They make money but their banks pay the price. The Reserve Bank of India (RBI) is well aware of this practice. So is the finance ministry. But they don’t openly talk about it as that may shatter public confidence in our banking system, some 70% of which is accounted for by state-owned banks.......................
Arrested Syndicate Bank MD S K Jain suspended
...........‘‘We have suspended him (S K Jain) and two executive directors (EDs) have been given charge of the bank as an interim arrangement,’’ the secretary told PTI. M Anjaneya Prasad and T K Srivastava are the two EDs of the Bangalore-based bank. Jain, along with seven other accused were remanded in CBI custody for four days as the agency plans to probe various other angles into the case that may emerge from the telephonic transcripts of the official and conduits........
Syndicate Bank fiasco: Jain helped hide Rs 100-cr NPAs
..................CBI has also alleged Jain used to negotiate directly with the companies on the bribe amount and once the deal was struck, he used the hawala channel to receive the money, the sources said. They alleged that once the bribe amount was agreed upon, the company used to pay a hawala operator who forwarded the payment to other businessmen who finally made the payment to brother-in laws of Jain in Mumbai; they too have been arrested.............
Putting the poor on the list
..............Finally, a key part of financial inclusion is financial literacy. There could be regular interactive training workshops organised in post offices on financial products suited to the rural sector. This will make take the process of financial inclusion much further with a focus on financial literacy and a reason to visit post offices on a regular basis......
A Rs 75,000-crore loan mela?
.................Recall that, some 15 crore people will be covered by this massive programme. If each one of them gets a Rs 5,000 overdraft, India needs to find Rs 75,000 crore of new money from somewhere to lend to those among the poorest. The government is using the term "overdraft", and not loan. Banks will hold no security against this overdraft. It is surely unfair to expect those who have never had access to bank accounts to put up assets to borrow money. They may deserve an overdraft. But the question is what kind of behaviour will it encourage among borrowers?..........
More resources for the poor
...........where will all this money come from and what is the possibility of fair distribution of money in an inefficient and corruption-prone public sector? There is a need to rethink this financial inclusion plan. This money should be diverted to plans that can fix the severe problem of poverty in India. Although,....
India Post may apply for payments bank licence
........If post offices are converted into banks, they will have to offer competitive interest rates to depositors. Besides it remains to be seen whether all bank deposits are offered tax treatment, similar to post office savings, once the postal department is given a banking licence. While the RBI did not grant a banking licence to India Post earlier this year, it said that the postal department and the government should look at the issue separately...........
Sebi in Touch With RBI Over Wilful Defaulters' Regulation
....."We are in consultation with the Reserve Bank of India for finalising the wilful defaulter regulations," Securities and Exchange Board of India (Sebi) Chairman U K Sinha told reporters on the sidelines of an event at the BSE here. The banking watchdog has reportedly been mulling a ban on capital raising activities by such entities. RBI is devising ways of sharing real time information on such activities with the capital market regulator................
RBI cautions against two firms claiming to be NBFCs
The Reserve Bank of India (RBI) has cautioned general public from depositing money with two firms claiming to be Non-Banking Financial Company (NBFC) despite not receiving requisite Certificate of Registration (CoR), said deputy general manager, RBI, Ahmedabad, in a public notice issued here. The public notice was issued by deputy general manager, RBI, Ahmedabad, on August 2............
NBFCs Guard Their Golden Turf Despite Tough RBI Code
..........It is reckoned that nearly 65 per cent of household gold holdings in rural markets. The reach by the likes of Muthoot Finance, which has over 4,400 branches across the country, will help them to tap this growing market. “RBI’s view to maintain the loan-to-value for bank’s gold loans for non-agricultural end uses is a fair one and it shows that the regulators want to shape up this emerging sector for long term giving level playing field to all players,” ..........
Telangana officials to thrash out loan issues with RBI
.....However, the RBI has written to government that it will agree only for rescheduling of loans taken during last year (2013-14). They also informed that they will consider rescheduling of loans only in 377 mandals that were declared cyclone and drought-affected in 2013. Hence, the 77 mandals that were recently declared Phailin-affected last month will not meet the criterion and will not be considered eligible................
Subscribe to:
Posts (Atom)