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Wednesday, August 6, 2014
Why Rajan deserves AAA for a non-event policy - Latha Venkatesh
Interest rates unchanged: Raghuram Rajan vows to fight inflation to the finish
Inflation Warrior Rajan Refuses to Drop Rate Guard
.......The RBI policy is pragmatic given the macro-economic environment, said Chanda Kochhar, managing director and CEO, ICICI Bank. “The monetary policy statement is a reflection of RBI's continued commitment towards containing infla tion,“ she said. “The policy acknowledges the gradual improvement in economic conditions and the government's commitment to fiscal consolidation. The reduction in the statutory liquidity ratio is a welcome step as it would make more lendable resources available for various sectors of the economy .“
Read - ET
Walking together
Jaitley welcomes Rajan statement on rates' easing
Responding to Reserve Bank of India (RBI) governor Raghuram Rajan's statement that the central bank will not keep interest rates high longer than warranted if disinflation persisted, Finance Minister Arun Jaitley said the latter process had already begun. "Going forward, RBI should examine the liquidity situation, inflation and growth in setting policy rates," the finance minister said. In a statement posted on his Facebook page, he said the recent data showed inflation was moderating...........
Governor Rajan maintains wait and watch approach
.............Interestingly, the statement does signal that RBI will be keeping a close watch on the global economic scenario, especially the actions of the US Federal Reserve. With strong GDP numbers and greater employment creation in the US, there is a high probability of the Fed recalibrating its monetary policy. Such a policy move could have implications for global capital flows, especially to emerging markets such as India.
RBI governor Raghuram Rajan adds Rs 40,000 crore to banks lending corpus
Reserve Bank of India governor Raghuram Rajan on Tuesday added nearly Rs 40,000 crore to the banking sectors lendable resources by reducing the statutory liquidity ratio by 50 basis points to 22% even as he kept other key policy rates unchanged....
Inside RBI’s GDP survey
................“The net response on future spending increased and witnessed positive sentiments for the first time in the last four rounds of surveys, as more than one third of respondents reported increase in future spending. During the current round, about 25-30% of respondents felt that it was a good time for making outlays for big-ticket purchases such as house, durable goods and gold. Less than 20% of the respondents felt that it was the right time for purchasing motor vehicle,”............
India no longer a problem economy: Rajan
..............Rajan also said formation of a stable government at the Centre has strengthened the country's position among overseas investors. "Political stability to my mind is worth a tremendous amount, as far as the external situation goes and that is a big change," the Governor said, adding both the government and RBI have together tried and improved the macro fundamentals..........
Hawkish policy
.........The question is whether inflation will remain benign or, as growth picks up, it too will begin rising. Which is why, as RBI puts it, ‘while inflation at around 8 per cent in early 2015 seems likely, it is critical that the disinflationary process is sustained over the medium term’. And, of its 6% CPI target for January 2016, RBI says the risks ‘are still to the upside’. Indeed, which is why RBI Governor said he was trying to lift impediments on the supply side...........
PSU banks' governance needs a re-look, says RBI Governor
...."I would like to suggest to look at the governance of the public sector banks and understand the deficiency there and try and improve it. There are lots of highly qualified and reputable people working in public sector banks," ........
'RBI could have leveraged abating inflation to cut rates'
.........."At a time when industrial growth continues to be sluggish, CPI-based inflation is moderating and above all, inflation risks are gradually abating due to improvement in monsoon conditions, the RBI could have taken this opportunity to effect a cut in interest rates," .............
RBI monetary policy: Save now to spend later
..........“Though a straightforward rate cut is unlikely for the next quarter or so, RBI is taking long-term measures for improving the credit market. When rate cuts do happen eventually, all these factors will come into play and are likely to initiate a new cycle in interest rates,”.......
Monetary policy review: RBI switches to a neutral stance
..............On balance, the stance on the policy has turned neutral, with risks to inflation increasing since the June policy. This neutral stance can persist, as long as uncertainty around various inflationary pressures remains. A key operational issue which needs to be addressed going forward, is the heightened volatility in the overnight rates in the inter-bank market, within the repo and marginal standing facility rates corridor. RBI aims to develop ..................
RBI signal in policy review: Forget rate cut this year
.......... “The idea behind the SLR cut is, if the government finances are improving and the government is on a fiscal-consolidation path, we can afford to liberate more access to government financing and make it possible for the private and public-sector firms to get access to that financing,” .......
RBI shifts inflation goalpost to Jan 2016
Reserve Bank of India (RBI) governor Raghuram Rajan has managed to divide economists yet again. While nobody was expecting RBI to cut rates on Tuesday, the stance was expected to be more accommodative. RBI's 'balanced' commentary has left enough room for interpretation. The two key takeaways from the current policy statement would be: ..........
Policy rate cuts—What, how?
...........One could argue that RBI would resist using monetary accommodation and deploy credit availability and liquidity-supportive measures till the medium-term inflation target is achieved. While RBI has been adopting this strategy since April 2014, frictional stress in money markets persists and credit offtake remains lacklustre despite initial signs of a turnaround in the economy. It’s not surprising that .............
Steady as she goes: Sonal Varma
............In this backdrop, the forward guidance suggests that while RBI is relatively confident of meeting the eight per cent inflation target by January 2015, it sees upside risks to the six per cent CPI target by January 2016 i.e. it is in no rush to cut rates.........
As RBI Fights it, MPs Unaware of Inflation
Here's a lesson in economics. Lalita-ji goes to the local mandi with Rs. 80 in her purse. What can she get? 1 kg of tomatoes. Jaya-ji goes to the canteen where she works, also with Rs. 80 in her purse. What can she get? A bowl of tomato soup with a slice of bread (Rs 8), fried fish and chips (Rs 25), a chicken sandwich (Rs 6), fresh fruit juice (Rs 14), fruit salad with cream (Rs 14), pudding (Rs. 12) and still have one rupee left over, which could presumably be used to tip the server. Welcome to the land where time seems to have stood still, at least as far as inflation is concerned -the Houses of Parliament...........
Read - ET
Read - ET
Banking on facts
.......The bank nationalisation of 1969 was an overnight decision of a single individual (incidentally, a non-expert on the subject) against the expert advice of the then Reserve Bank of India Governor L K Jha, and that too without any rationale. The only reason for the decision, narrated to a friend years later by the august personality who took it was: "They (my political adversaries) drove me to the wall and left me with no other option," (vide RBI History Vol 3 p.53).
RBI’s Own ‘Financial Inclusion’
While RBI is gearing up to play a key role in the grand plan to bring 150 million households into the formal financial system, RBI employees have obtained a nice fat ‘financial inclusion’ of their own.............
Grievance about Grievance Mechanism - A.Chandramouliswaran
I have read with interest Dr TVG's experience with ICICI bank published in 'MoneyLife' and reproduced in VITALINFO. A good number of people have been having such grievances with these banks for a long time and there seems to be no solution in the Indian banking machinery. I share his view that the knowledge of the officials at the operational level (including the Branch Manager) of these high tech banks leaves scope for substantial improvement. They probably do not need this knowledge as they have practically no authority and are worse than post offices. All that they do is to pass on every request received from their customers to their superiors at the controlling/head offices and act as per the instructions received from them. The top officials of these banks before they moved to these banks used to complain about over centralisation in the RBI !! I also agree with TVG that while the Grievance Mechanism has been put in place, it does not really solve your grievances ! I have even experienced that the staff entrusted with dealing with the grievances (I have a suspicion that this work has been outsourced !) do not understand the issues raised and send you irrelevant responses. The tragedy is that when the matter is taken up either with the Ombudsman or with the Customer Service Department at the central office of RBI, the grievance does not get redressed. Some junior officials at the RBI deal with these references in a casual and routine manner. Incidentally, my high tech bank, to my good luck, has no issues in sending me the OTP to my registered email address and to my registered mobile number. I received the OTP thru SMS to my mobile even though I have not opted for International roaming as I am also presently in USA.
- A.Chandramouliswaran
Obituary
I deeply regret to advise you of the demise of Shri.S.Rama Iyer in Andheri, Mumbai on August 4, 2014. He was 91 years old and had served in the Bank for almost 40 years. He was a Comptist in the Exchange Control Department. He is survived by his wife, two sons and a daughter. The elder son and daughter are working in RBI, Mumbai. Rama Iyer was a dedicated, humble man and deeply religious. We pray that his soul rests in peace.
- P.P.Ramachandran
RBI inter-school quiz
..........SS Barik, Regional Director, RBI, Guwahati will be the chief guest of the quiz competition. Pradeep Atmaram, GreyCaps India Pvt Ltd will also attend the programme as the quiz master.......
Students invited for quiz competition on RBI's role, banking
....................."The Reserve Bank of India, New Delhi Office invites students in IX, X, XI and XII of all the schools including government schools, private schools and public schools, to participate in RBIQ 2014, an all-India Inter-School Quiz," RBI said in a release. .........
Income tax: Don’t panic if your return is under taxman's scrutiny
...........An individual need not panic if his case is up for scrutiny and must reply to all queries raised either through a letter or by appearing in person. The tax official can demand salary certificate or Form 16, which gives details of gross salary paid and taxes deducted, rent receipts and rent agreement with the landlord, if any rent exemption is claimed, and bank statements. The TDS certificate in Form 16A must be preserved and produced before the income-tax official. The income-tax department can send the notice within a year from the end of the month in which the assessee filed the return. The notice has a predefined format with the taxpayer’s name, address, Permanent Account Number and the year for which it has been issued,........
Banking Revamp Bill Won't Burn a Hole
............As the late I G Patel mentions in his memoirs, Indira Gandhi summoned him and said, “For political reasons, it has been decided to nationalise the banks. You have to prepare within 24 hours the Bill, a note for the Cabinet and a speech for me to make to the nation on the radio tomorrow evening. Can you do it and make sure there is no leak?“
Read - ET
Waking up to the BRICS
...........Then, there are other questions that will need to be answered in the days ahead. If China is unable to dominate this institution, will it prefer to prioritise investments through its (proposed) Asian Infrastructure Investment Bank? How soon can the central banks of the member countries devise arrangements to act as depository institutions for the NDB? And, how will the NDB raise funds in different countries? What will be the currency or currencies of choice? All important posers which can be addressed if the resolve is unerring...............
`Not even grads, but on bank boards'
You might expect renowned financial or business experts to sit on the boards of banks, but that isn't always true in the case of state-run banks. Petrol pump owners, a Doordarshan anchor, the head of a ladies club, trustees of religious boards and a clutch of small-time politicians are some of the independent directors on boards of public sector banks. The presence of this motley bunch seems to have driven the government to initiate a clean-up............
Read - TOI
Read - TOI
Will India Inc actually bring women on board?
India can become an inspiration for other developing countries if it is able to demonstrate an actual change in the women representation on corporate boards, mandated by the new Companies Act, as well as influence their presence in senior leadership. Amongst the developing economies, where India is the first country with such an Act, China led with an 8% representation of women on boards. Brazil followed close with 6%, and India was at 5% as of 2012. However, these numbers are far lower than the developed countries...........
Read - TOI
Read - TOI
Syndicate Bank case doesn't reflect entire PSB system: Rajan
.................."I think the balance has to be maintained, and we have to be careful that while we do a thorough investigation and culprits are brought to book, it doesn't become a witch-hunt which then stalls the entire credit process. So, we have to be careful and I think that the investigative agencies will do their job appropriately,"...............
Syndicate Bank fiasco: Caution note for PSBs
..........“When the government gets complaints against CMDs of PSBs and confronts them on it, their standard response is that the decision was taken by the credit approval committee. It can’t be collective responsibility. Head of the committee has to be accountable,” the official added. A former RBI governor, however, said the problem cannot be fixed unless the government stops interfering in the functioning of state-owned banks.........
CBI sets up probe against own officers
Central Bureau of Investigation (CBI) has ordered an internal inquiry against its own officers probing the bribery scandal involving Syndicate Bank chairman and managing director S K Jain. The CBI has initiated the latest inquiry against its sleuths for not arresting Neeraj Singhal, vice chairman and managing director of Bhushan Steel, one of the companies that was trying to settle its outstanding loan with a bribe. CBI team had explicit orders from the agency director Ranjit Sinha to arrest Singhal but they decided to let him go after they reached his bungalow in Delhi last Saturday..........
Syndicate Bank's woes
.............With his arrest and the bribery scandal coming to light, the Manipal-headquartered bank, which prides itself as "Faithful. Friendly" will see its credibility take a beating.
Bihar govt not serious about fake chit fund firms
.....Regional Director, Reserve Bank of India (RBI), Patna region, M K Verma told reporters on Monday that the state was yet to have its own registrar of chits (ROC) and, as a consequence, all the 26 chit fund companies of the state are illegal as of now for no fault of theirs, adding that it was the Chit Funds' Act that made it mandatory for every chit fund company to get the state government approval through the ROC concerned. He said the list of chit fund companies was also given by the RBI to the state government officials concerned......
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