......"... traction on deep rooted structural reforms is needed to significantly improve the inflation-growth trade-off in the short as well as medium term," HSBC Chief Economist for India & ASEAN Leif Lybecker Eskesen said, adding that the RBI will have to approach any further easing with "caution".
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, June 1, 2012
Rupee decline, wobbly markets and 'lowest' GDP growth highlight inept handling of economy by UPA-II government
....Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. "It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power," C Rangarajan, chairman of Prime Minister's Economic Advisory Council told ET...................
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Rupee fall: Did RBI ask PSU banks not to purchase dollars?
The rupee spiked, breaching 56 to the dollar, on market chatter that the RBI has asked state oil companies to restrict purchases of dollars through four state-run banks, but senior officials from the RBI and oil firms said the talk was not true. A senior official at the Reserve Bank of India called the rumours “preposterous” and said he was not aware of any such directive being issued...........
Thursday, May 31, 2012
Six districts are underbanked in Karnataka
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| Review on performance: (From left) Mr Subir Hari Singh, Additional Chief Secretary and Development Commissioner, Government of Karnataka; Mr S.V. Ranganath, Chief Secretary, Karnataka; Mr M.G. Sanghvi, Chairman, SLBC and Chairman and Managing Director, Syndicate Bank; Ms Uma Shankar, Regional Director, RBI; and Mr S.N.A. Jinnah, Chief General Manager, Nabard, at the State Level Bankers committee meeting in Bangalore on Tuesday |
The State Level Bankers’ Committee (SLBC), Karnataka, has identified six districts in the state as underbanked districts. The districts are Bidar, Bangalore rural, Chamarajanagar, Gulbarga, Koppal, and Raichur. It has initiated steps to open bank branches in these districts before September 2012 as directed by the Reserve Bank of India (RBI).................
Bad vaastu of rupee symbol caused its fall: Expert
An inauspicious symbol is behind the fall of the Indian rupee and a slump in the economy, aims a vaastu shastra expert in Guwahati. According to vaastu consultant Rajkumar Jhanjhari, 50, the lower horizontal line of the symbol has 'slit the throat' of the Indian rupee leading to its slide. Dharmalingam Udaya Kumar, assistant professor in the design department of IIT-Guwahati, had designed the rupee symbol in 2010. They symbol was incorporated in currency notes of 10, 100, 500 and 1000 from January and in notes of 20 and 50 from April this year. The symbol is a combination of the Devanagari "?" (ra) and the Latin R without its vertical bar. The designer's concept note had explained that two parallel lines at the top represent the Tricolour and depict an equality sign symbolising the nation's desire to reduce economic disparity..........
Rupee’s roller coaster ride
........Doing a post-mortem of rupee depreciation, the RBI has blamed the international financial crisis while others hold domestic factors to be equally responsible. Subir Gokarn, Deputy Governor, Reserve Bank of India, said the rupee was under severe pressure largely due to global factors arising out of political uncertainty in Greece. “Now in the last two or three days the pressure has been global. Rupee responds to very strong global forces,” he said during a programme organised by Indian Chamber of Commerce (ICC).He added that increased demand for dollar from importers and capital outflows were adding to pressure on the Indian currency. C.Rangarajan, Chief Economic Advisor to the Prime Minister echoed RBI, “Globally, the US dollar remained strong against a basket of major currencies with the euro remaining under pressure as the European Union leaders’ pledge to unitedly fight against the debt crisis failed to impress investors.”......
Financial inclusion for whose benefit?
.......In a recent article, Mr K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, defined financial inclusion as “the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by mainstream institutional players.” That is an excellent definition, and one which is capable of transformational change — if implemented in letter and spirit. The trouble is, when it comes to implementation, the process has been largely driven by government fiat and regulator-pushed (even if implicitly so) quota regime............
Banks' credit-deposit ratio for West Bengal falls to 64%
...............UBI, the convenor to state level bankers' committee in Bengal, held a meeting with senior officials from state government, Reserve Bank of India and other lenders on Wednesday. ""I am not delighted,"" state finance minister Amit Mitra told bankers at the meeting. ""We have to find out the factors behind the low CD ratio."....................
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Morgan Stanley gets RBI nod for banking licence
Leading US bank Morgan Stanley has received an in-principle approval from the Reserve Bank of India (RBI) for a banking licence............
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Improving priority sector lending norms main focus: IDBI
.......... do not expect any immediate policy announcement from the RBI. The macro economic indicators are still not showing concrete indication for policy movement either in one direction or the other. I would expect the RBI would continue to watch these indicators carefully as it moves towards June 18 announcement.................................
Was 2011-12 India’s worst year since the global crisis?
....In short, growth so far below what RBI considers the trend rate of growth of around 7.3%, could mean the central bank becomes more worried about growth than about inflation.........
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Don't blame the eurozone
,,,,,,,,,,,,A comparison of actual FDI vis-a-vis the potential level determined on the basis of macroeconomic factors showed that "actual FDI which has generally tracked the potential level till 2009-10, fell short of its potential by about 25% during 2010-11… this large divergence between actual and potential was partly on account of rise in policy uncertainty", according to a recent Reserve Bank of India (RBI) study on 'Foreign Direct Investment Flows to India'...........
Left in a limbo
.....The country's banking system, which remained dormant in the area for quite sometime for reasons obvious, had suddenly taken a fancy to give advances to the MFIs that mushroomed across the country in recent years. This is borne out by the figures of the Reserve Bank of India (RBI) which reported that the outstanding credit of scheduled commercial banks to MFIs during the last three years rose from Rs. 5,572.15 crore in March 2009 to Rs. 7,960.21 crore in March 2010 and to a mammoth Rs. 15,467.58 crore in March 2011. But following the fracas of a few leading MFIs, particularly in Andhra Pradesh, slapping exorbitant interest rates which led to suicides of hapless and harried borrowers, the State government enacted the Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act 2010......
Infra finance cos to have uniform risk weight: RBI
The Reserve Bank of India (RBI) has allowed infrastructure finance companies (IFCs) to have a risk weight of 50% on bonds that cover their public-private partnerships as well as commercial operation date projects........
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Historic moment for the IMF
......While the IMF should be applauded for taking a hard look at its view on regulating cross-border finance, we think further revision is needed in order for the Fund to have a policy that will truly be useful for nations to prevent and mitigate financial crises..............
Indian bank business shrinking in this fiscal, says RBI
Deposits and advances with Indian banks have shrunk so far in the fiscal year that began in April, with sluggish economic growth crimping loan demand, the Reserve Bank of India said on Wednesday...........
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India GDP growth could dip below 6%
.....the central bank, which delivered a surprise 50 basis–point cut in interest rates in April, finds itself restrained in its ability to boost growth with further rate cuts, due to continued inflation pressures.
The RBI is seeking a return to “trend growth” of 7% to 7.5% for the economy. But given the latest indications, “the economy will struggle to see year-on-year growth return to trend anytime soon, which in turn will reinforce the dilemma facing the RBI,” .......
RTI made easy: Government to set up call centres website for filing applications
While the government is consistently blamed for diluting the RTI (Right to Information) Act in several ways besides making illogical amendments at the state level, it is gearing up to make filing of RTI applications by just making a phone call. Citizens will not have to take the pains of either writing a RTI application or taking the pains to post it or physically deliver it. Proposals for setting up such privately run call centres have been advertised by the “Department of Personnel & Training” (DoPT) with the last date of submission being 10 July 2012.............
Wednesday, May 30, 2012
'Correction' in Re to aid cut deficit: Rakesh Mohan
Former RBI Deputy Governor Rakesh Mohan tells CNBC-TV18 that the fall in the rupee is to be seen as a correction, He explains that the new level of the rupee vis-Ã -vis will make the country competitive and aid in reducing the current account deficit. Mohan adds that the RBI has a very tough road ahead and needs to use every option that is available.
Click to read an edited transcript of the interview
Kerala needs more centres to dispense currency'
Thiruvananthapuram, May 29: The Syndicate Bank Staff Association has requested the Reserve Bank of India to open satellite centres in the State to deal with currency and coin distribution. The request comes in the context of a RBI move to close down its counters delivering these services in state capital and metros. It has found a mention in the RBI annual policy statement for 2012-13. Distribution of currency notes and coins would now be channelled only through currency chests and bank branches. There are five coin/currency dispensing counters at the Reserve Bank regional office here and two associated with its Kochi office. Mr K. S. Bhat, all-India Secretary, of the Syndicate Bank Staff Association (SBSA), said that the RBI move would affect interests of business and the general public. He urged trade unions as well as the banking public to come forward in protest against this move and force the Centre to take up the matter...................
RBI cancels Chatrapur co-op bank licence
The Reserve Bank has cancelled the licence granted to Chatrapur Co-operative Bank Ltd, Chatrapur, Odisha. With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme. The RBI said that the bank had ceased to be solvent and with all efforts to revive it having failed and the depositors being inconvenienced by continued uncertainty, the RBI delivered the order cancelling its licence after the close of business on May 23................
RBI asks NBFCs to verify documents before opening biz accounts
......"For sake of clarity, in case of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. "Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, NBFCs/RNBCs should call for and verify documents before opening of accounts in the name of a proprietary concern," RBI said in a notification..................
Shake-up in banks’ shareholding?
............The Bill will also give RBI the power to supersede the board of a bank for up to an year and to call for information from banks’ associate companies. These are truly significant changes in that they create the enabling conditions for the banking regulator to take bank ownership and governance to another level, primarily for private sector banks. However, these are necessary but not sufficient conditions. The sufficient conditions can be created through further ......
DMs asked to submit list of new bank branches, business correspondents
In a bid to complete Financial Inclusion in the State, all the district magistrates had been directed to submit the list of new bank branches and business correspondents (BC) of their respective districts in one week. They had also been asked to take initiatives to increase Credit Deposit Ratio.Chief Secretary Alok Kumar Jain issued these instructions to district magistrates in a video conferencing at Secretariat on Tuesday. Recently RBI Governor D Subbarao had agreed to relax the set standard of 1,000 population for opening of bank branches. There ought to be a bank branch in every 5 km distance and a BC in every 2 km distance. He directed the DMs to identify the location and submit the list to him in one week and to ensure connectivity while choosing the location............
LIC hikes interest rates on loans against policies
.....Meanwhile, the All-India Bank Depositors Association and former deputy governor S S Tarapore have suggested to the Reserve Bank of India that premature termination of fixed deposits should be allowed for survivors in a joint fixed deposit account. "The logic behind this is that the joint holder has to usually face a lot of expenses and should not be further penalized through imposition of an early withdrawal penalty," said Ashok Ravat, secretary of the association.
NPAs not a systemic issue:RBI
KVG Bank aggressive on financial inclusion front
The Karnataka Vikas Grameen Bank (KVGB) under the financial inclusion scheme has covered 418 villages and of this, 53 villages have brick and mortar branches. Meanwhile, the bank plans to open 50 regular branches and 50 ultra small branches and achieve a business-level of Rs 13,000 crore. Declaring 50 more villages as solar villages and establishing nine financial literacy centres are other schemes. KVGB chairman C Sambasiva Reddy told reporters here that the bank’s net profit for the year 2011-2012 stood at Rs 128 crore showing a growth of 35 per cent. The bank’s capital plus reserves have risen to Rs 839 crore from Rs 711 crore.
BS
Tardy lending performance raises concern at bankers' meet
.....The RBI Regional Director Uma Shankar said that to make financial inclusion meaningful it is necessary for banks to actually lend to people who have been given new accounts. “Only a small portion of the villages with a population of more than 2,000 persons have been provided with credit facilities,” Ms. Uma Shankar noted. She also urged banks to review and monitor the functioning of banking correspondents appointed by banks. “Banks need to ensure that the conduct of their correspondents does not affect their reputation,” she said............
RBI proposes tweaking FII debt limits: source
The RBI has proposed to the finance ministry reducing the minimum lock-in debt investment periods for foreign institutional investors as a way to boost inflows and help protect a weakening rupee, a senior official said on Tuesday. The Reserve Bank of India has also proposed recasting the investment limits within the countrys existing debt categories, an official with direct knowledge of the proposals told Reuters, given more than a third of foreign investment limits across all Indian debt categories are unutilised. He declined to be identified because the proposals have not been publicised. .........
Timely intervention by CM saves four district cooperative banks from their licences being cancelled by RBI
Ahmedabad, Tuesday: Timely intervention by Gujarat Chief Minister Narendra Modi had saved four district central cooperatives of the four districts from their licences being cancelled by Reserve Bank of India (RBI)................
New priority lending norms will hit pvt, foreign banks most
.....Banks may be encouraged to ensure that the number of outstanding beneficiary accounts under ‘small and marginal farmers’ and micro enterprises’ each register a minimum annual growth rate of 15 percent, the committee says. These new sub-targets, experts believe, will be a big challenge for private and foreign banks, since the lending levels for these banks are well below these new targets. The RBI’s view seems to be that it is now time foreign and private banks, having done business in India for long, join as equal stakeholders in the objective of greater financial inclusion. The aim is to increase direct lending to those who have a lack of access to credit and those sectors which generate large employment. How the foreign and private banks respond to these targets remains to be seen.
Moily irked by growing demands for selective exclusion from CCI scrutiny
.....After the banking regulator Reserve Bank of India made a pitch for exempting bank mergers from the ambit of the Competition Commission of India (CCI), there have been demands from other sectors, especially those like telecom which have their own regulators...............
High govt borrowing may crowd out pvt sector – RBI
The government’s large borrowing could crowd out credit to the private sector, Duvvuri Subbarao, governor of the Reserve Bank of India said on Tuesday. The situation would become more critical if there is fiscal slippage, he said at a conference of state finance secretaries in Mumbai.........................
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Inflation: RBI asks states to address supply side issues
Ahead of mid-quarter monetary policy review, Reserve Bank Governor D Subbarao on Tuesday asked state governments to address the issue of supply side bottlenecks against the backdrop of rise in prices. Addressing state finance secretaries here, he said both the centre and the states have important role in generating and promoting the supply response so that inflation could be managed within the comfortable zone.............
India GDP: not looking good
“There are only two [factors that could force] RBI to look at cutting rates. One is what happens to Greece and if there is some severe shock waiting for us. And the second is if growth over the next one or two quarters continues to remain close to 6 per cent – if that is the scenario then RBI would feel compelled to cut rates,”.......
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The rupee saga
The partially convertible rupee on Tuesday closed at 55.67/68 per dollar, 0.9% below its previous close of 55.1850/1950
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Time is ripe for an NRI bond issue to support rupee: Indranil Sen Gupta, India Economist, Bank of America Merrill Lynch
.....RBI Governor D Subbarao is really losing the game of expectations rather than facing capital outflows. Of the $20 billion that the RBI sold in October-January, almost $8 billion remain parked in banks' forex nostro-balances and thus have not left the economy. All the forex market is probably looking for is a commitment that the RBI will rebuild reserves abandoning its policy of trying to appreciate the rupee at the cost of buying forex.........
Rupee fall will not last very long: PM
Dismissing any comparison with the 1991 external debt crisis, Prime Minister Manmohan Singh today said the fall of rupee is a matter of concern but was confident it will not last very long. He said the rupee depreciation was taking place against the backdrop of the global economic problems and the Euro zone debt crisis and expressed optimism that solutions will emerge at the G-20 Summit in Mexico next month...............
Read - Indian Express
The rupee: a reality check
.............Unlike countries such as China, our official policy is not to target any particular exchange rate. The Indian central bank has stuck with this hands-off policy, allowing the market to determine the value of the rupee. One way of looking at the current slide is to consider it an overdue correction after a long period of overvaluation, when the strong capital flows into India sent the rupee soaring. RBI has done well to not target an exchange rate, because recent economic history shows us how difficult it is to defend the value of a currency in a world where capital flows freely across borders...................
Tuesday, May 29, 2012
Banks asked to ensure every family has at least one savings bank account by June
.....It is important that all such accounts are active and do not end up like no-frill accounts, a majority of which are dormant and hence unviable," said a top executive of a public sector bank. The government has also decided to extend its financial inclusion drive, called 'Swabhimaan campaign', to habitations with population of more than 1,000 in the north east and hilly states as per the 2011 census. The ministry maintains this model of financial inclusion is not in conflict with the blueprint prepared by the Reserve Bank of India. "There are no differences and the RBI's model of "one district-many banks-one lead bank" is being followed," another finance ministry official said.
RBI asks co-op banks to formulate norms for conversion of FDs
Reserve Bank on Monday permitted cooperative banks to formulate policies to check the practice of premature conversion of fixed deposits into other deposit schemes by customers with a view to obtaining higher interest rates. "In order to facilitate better Asset Liability Management (ALM), it has been decided to permit banks to formulate their own policies towards conversion of deposit with immediate effect", RBI said in a notification..........
RBI eases banks' short term deposit restrictions
The Reserve Bank of India has removed restrictions imposed on banks which earlier prevented lenders from levying penalty on customers for foreclosure of some term deposits..................
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Maharashtra State Co-Op Bank omits key information from its annual report
......In the 2010-11 fiscal, according to the annual report, it is pertinent to note that the company was imposed a penalty of Rs5 lakh, for non-compliance of Reserve Bank of India (RBI) directions issued u/s 35A of the Banking Regulation Act, 1949 (The Act). According to Section 35A of the Act, it gives RBI the powers to give directions to a bank, in the interest of depositors and to safeguard their interests. Furthermore several deviations were noted in the annual report and stated in verbatim, below:
Has cloud computing come of age?
......While there’s excitement over the benefits of the cloud, Mahajan cautioned that the industry needs to address the issue of data sovereignty. “RBI (Reserve Bank of India) mandates all the banks and their branches to keep data within geographic boundaries. Hence, there is a gap for pure public solutions,” he said. Garkel of Deloitte agreed that the main concern today was from a regulatory perspective as it (the cloud) had not come under the purview of RBI. For example, regulatory perspectives regarding audits are yet to be introduced in the area of cloud computing. Currently only non-core activities are in the cloud. “There has to be more clarity on how the regulatory landscape evolves,” said Garkel........
Banks can lower interest rates if CRR cut further: SBI
Ahead of RBI's mid-quarterly policy review, State Bank of India today said a cut in cash reserve ratio (CRR) will give a room to banks for lowering interest rates."More the RBI cuts CRR, greater will be the ability of banks to reduce rates," SBI Chairman Pratip Chaudhuri told reporters here................
RBI and 926 bank branches to collect advance income tax
...."As many as 926 computerised branches of public and private sector banks will receive...These arrangements have been made for the convenience of the income tax assesses," RBI said in a statement.......
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Here, women deal a ‘biz’ blow to dry spell
........Manndeshi Mahila Sahkari Bank, which was started in Mhaswad in 1997, has been able to transform thousands of lives in rural Satara. The bank is the first micro-financing initiative in India and tends only to women. Riding on women power, the Mhaswad-based bank has now reached Vaduj, Gondavale, Dahiwadi, Satara and Lonad along with two mobile branches. Each branch has “Rural-B schools” which helps women learn various skills and encourages them to form self-help groups for better sustainability. Despite economic slowdown across the globe, this women bank has grown to Rs2.25 crore from an initial capital of Rs6 lakh. Women are managing finance better than men. “Our repayment rate is 98%. As women are programmed to save more and manage better than men, we were sure about the success of the bank though our application had been rejected by RBI initially,” says Chetna Gala Sinha, the founder of the Mann Deshi Mahila Bank, who gathered all illiterate women of Mhaswad to launch this bank in 1997......
Nabard FY14 operating surplus soars 28 pc to Rs 1,635 cr
.....Serving special needs, the bank ploughs back the surpluses in its reserves and other funds and does not pass on anything to the government which owns 99 per cent stake in it with the remaining 1 per cent being held by the RBI, the bank said in a statement issued here. A Bill is pending in Parliament to allow the RBI to divest this residual one per cent stake too. Earlier, the RBI and the government were equal owners of the development bank.............
Tread cautiously on risks, Pranab tells banks
...... the Financial Services Secretary, Mr D.K.Mittal, later told reporters that the current gross NPA level of over 3 per cent for 2011-12 was a matter of concern, but there was no need to panic. “Indian banking system is much sounder than the European system,” he said. Mr Mittal highlighted that there was continued efforts to address the NPA issues in the Indian banking system. Asked whether the Government, in consultation with the RBI, was contemplating a special dispensation for asset recognition in the wake of the current difficult economic environment, he replied in the negative. “There is no need for separate dispensation. Banking system has to face the challenge,” he said..........
Will RBI and government learn their lessons from current crisis?
.....If you do not consolidate your gains and reform during your good times you are forced to do that in the worst of times. If the RBI and the government learn that one lesson from the current crisis, we will have done well. Is that too much to hope for?
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‘Rupee slide to have less impact on sovereign ratings'
.....However, the rupee's fall is also a result of India's existing credit weaknesses such as loose fiscal policy, which has boosted domestic demand, inflation, and import spending; government subsidies, which support India's reliance on imported commodities; and domestic regulatory uncertainties, which have deterred foreign portfolio and direct investment........
Read - The Hindu
Read - The Hindu
RBI's two options to guide rupee
RBI deployed strong ammunitions to dilute the momentum in rupee fall but could not prevent the “run” into 56-57 (low of 56.39). This is seen as strong support zone for rupee where genuine .................
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Rupee decline fans inflation risk
....The Reserve Bank of India will probably be unable to lower borrowing costs until October-to-December, Goldman said. Tushar Poddar, an economist at the company in Mumbai, wrote in a note to clients that the RBI will now likely lower interest rates by half a percentage point in the final three months of 2012, compared with the 75 basis points previously forecast
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Mobile money: Kenya good, India bad
Although the government made a similar push for inclusion in India, the Reserve Bank of India took a more cautious approach when the product was introduced last December. Vodafone could offer its mobile service, says Joseph, but it had to team up with a bank to materially cash in and cash out the transfers.................
Ahmedabad SE plans revival, will sell land to raise net worth
....Tie-up talks between NSE and ASE have been going on for two years. The plans got delayed as Sebi had set-up a committee under former Reserve Bank of India (RBI) governor Bimal Jalan to study working of stock exchanges and prepare a road map. As per recent norms all stock exchanges in India should have a net worth of Rs 100 crore. ........
BANKS SWELL WITH DEPOSITS, DON’T LEND A PENNY IN JK
.....Pertinently, during his visit to the state in March this year, Reserve Bank of India (RBI) governor, Dr D Subbarao had also slammed the banks for having dismal CDR in J&K. According to observers, the CDR should have increased in view of “peace in the state last year”, as compared to past three years when the Valley saw different agitations..........
Monday, May 28, 2012
K R Kamath tipped to become RBI dy guv
K R Kamath, currently the Chairman & Managing Director at Punjab National Bank (PNB), is tipped to move to Mumbai’s Mint Road as a Deputy Governor at the Reserve Bank of India. Kamath’s move to the central bank is being talked about to fill a probable vacancy that could arise if K C Chakarabarty, one of the DGs at RBI, moves to Manila as an Executive Director at the Asian Development Bank. One DG position at the central bank is always filled with a person from the commercial banking space, usually by a chief of PSU bank. Incidentally, prior to joining RBI as a DG in June 2009, Chakrabarty also served as the CMD of Delhi-headquartered PNB.
TOI
Forget Mussoorie, hold meets at HQ: FM to PSBs
State-run bank executives are the first victims of a fresh round of austerity drive that finance minister Pranab Mukherjee warned about in Parliament last week. His ministry has sent a circular to all public sector banks, directing them to hold their board meetings at their headquarters and not at tourist destinations. "It was brought to our notice that banks hold their meetings in tourist destinations such as Goa or at hill stations on the pretext of interacting with the local staff," said a finance ministry official.
Interestingly, the diktat to state-run banks comes at a time when the board of the Reserve Bank of India is meeting at Mussoorie..........
An RTI test looms for a regulator
.....The Reserve Bank of India (RBI) has challenged an order by the Central Information Commission (CIC) asking the central bank to disclose names of the top 100 industrialists who have defaulted on loan repayments. In a writ petition to the Delhi high court, which is scheduled to be heard on 29 May, the central bank has argued that provisions of the RBI Act, 1934, prohibit disclosing credit information relating to bank customers and that doing so will violate confidentiality. RBI has asked the court to quash the order...........
Central Vigilance Commission reconstitutes advisory board to check commercial frauds
....The board will have a tenure of two years. It would form part of the organisational infrastructure of the CBI and the Reserve Bank of India, providing the required investigative and secretarial services. "The Board's jurisdiction would be confined to those cases where, in disagreement or dispute with the Bank, Public Sector Undertakings or financial institution, the CBI desires to register a Regular Case or Preliminary Investigation in respect of an allegation of a fraud," an order said. Besides, it may also advise on any other technical matter referred to it by the CBI or the CVC. The board, under the chairmanship of former Deputy Governor of RBI Shyamala Gopinath, will be based in Mumbai but it can meet anywhere in the country at its convenience........
India's macro-eco situation has suddenly worsened: Assocham
....This would be catastrophic and depress the demand in the manufacturing sector, the largest employment source after agriculture and services, it said. However, the chamber hoped that RBI will take a balanced view when it reviews the credit policy next month.......
RBI taking steps to check rupee slide: Pranab
....Mr. Mukherjee said the RBI was taking steps to check the depreciation in the Indian currency from time to time.RBI recently indicated that it may sell dollars directly to oil companies to ease pressure on the currency. Besides, it has already taken steps to curb speculation in the forex market and increase the inflow of foreign currency...........
Half-hearted efforts
This refers to “Reforms not put on the backburner: Bansal” and “Rupee fall continues, hits 56 to a dollar” (Business Line, May 24). On the reforms front, the Government is so used to rollbacks, that it prefers to bring in half-baked measures to show that it is doing something and project that the coalition partners and opposition parties are the stumbling block. On fuel prices, the Government should have arrived at an auto-linkage formula vis-a-vis the crude oil basket's price. On the rupee front, the RBI is inching forward in uncertain times, especially because the economy is so interlinked with foreign markets that no monetary or forex measure can stand the test on its own. The RBI's firmness appears to be the right stance at this stage.
- K.U. Mada Mumbai (HBL)
NRIs beware: Best time to remit cash ending?
.....However, recent moves like hiking the petrol prices by the government and the sale of dollars by the RBI at least show intent by Indian authorities to do something about the rut. While this in itself may not be enough, the fact that the rupee has already depreciated by more than a quarter in less than 10 months, and that the Indian economy is still growing, albeit slower than before, may help support the rupee at current levels................
On a downhill course
.....Amidst all these, there have been very few explanations from the Reserve Bank of India and the government, which can be considered original. It is this apparent helplessness as much as the actual fall that is truly baffling. One must remember that the recent rupee-dollar movements are being dictated by market forces and not induced by any RBI action. Recent declines, unprecedented as they are, have left policymakers nonplussed and scrambling for rational explanations. Failure to identify specific causes, in turn, suggests that countervailing policy measures, even if feasible at all, cannot be effectively targeted within a given time span.........
Easing interest rates may not be an easy task for RBI
..............."Given the forex volatility and RBI interventions, liquidity has remained tight and government induced inflation pressure still remains high, so the RBI will have little room to cut rates immediately,'' ..................
Rupee likely to slide further
....The PPP theory is based on the idea that currencies are in equilibrium when their purchasing power is the same in each of the two countries. The PPP theory suggests that a currency would appreciate or depreciate vis-Ã -vis another currency to the extent of the inflation differential between the two countries.........
Rupee: depreciated tactics - Renu Kohli
.....There is little doubt that the measures the Reserve Bank of India (RBI) has taken to increase the inflow of foreign capital are remedial in nature and not really aimed at fighting a fundamental exchange rate adjustment. The central bank is more managing the pace of currency depreciation than supporting the rupee at this or that level. With foreign exchange reserves down to six months of import cover, short-term debt above 40 per cent of overall external debt and significant foreign currency liabilities due for repayment in the near term, the RBI knows better than anyone that it can only do so much and no more. The RBI also must be conscious of the fact that it did not buy any foreign currency to accrete reserves when the rupee was on the upswing since 2009. But it is now forced to sell to moderate the depreciation, which is unsustainable beyond a point as it will only deplete reserves.......
High govt spending makes it hard for RBI to act decisively: Derrick Irwin, Portfolio Manager, Emerging Markets, Wells Fargo
..........We are worried that government paralysis will continue to act as a drag on investment spending and lead to a lower rate of growth. India faces numerous headwinds to growth, and the Reserve Bank of India (RBI) and the central government are at odds over economic policy. While RBI has room to stimulate the economy by cutting rates, we fear that profligate government spending will make it very hard for RBI to act decisively. Further, India remains ....................
India's balance of payments: The alarm bells are ringing
.....The problem was not with services alone. As the RBI notes in its report on India's balance of payments, export growth decelerated in October-December 2011 while imports continued to rise largely due to high international commodity prices and inelastic demand for gold and silver. Here it is important to remember and the RBI reminds us that the advanced economies of the West still shape India's export-fortunes; so while the Commerce Ministry and commentators may appear innovative in seeking new markets for India's exports, the fact remains that the largest part of export earnings come from the US and Europe and other major western economies.......
Exporters rattled as some buyers demand quotes in rupees
.....Exporters plan to approach the Reserve Bank of India (RBI) to review its recent directive requiring exporters to offload 50 per cent of their foreign currency holdings in the exchange earners' foreign currency account. Already, exporters have complied with it, bringing a gush of dollars into the market — a move that has not helped stabilise the rupee...........
My View on "Electronic transactions"
In the case of electronic transactions, even an agency commission of Rs 12 migt leave more margin for a bank than a payment of Rs 50 for a transaction done thru a cheque payment.It does not seem likely that a customer would not put through an Electronic transaction just to enable banks earn more commission per transaction.
- A.Chandramouliswaran
Gold loan firms’ profit drops after RBI norms
.....Gold loans business in the country has been adversely impacted due to developments in the past few months, particularly the Reserve Bank f India (RBI) regulations that placed many restrictions on the lending practice of the companies. The RBI censured two companies – Manappuram and Muthoot Fincorp – for using their branches to accept deposits from the public unlawfully. This led to investor skepticism against the sector and resulted in drying up of borrowing sources.......................
Rajat Gupta under ED scanner
.... A confidential report of the Reserve bank of India accessed by The Sunday Standard reveal the modus operandi of the troika. Incidentally, Gupta and Vangal are co-founders of the IT company, Scandent Solutions. Gupta and seven NRI investors led by Vangal picked up 24.93 per cent equity in TMBL with the clear understanding among themselves to acquire substantial TMBL shares and get representation on the bank’s board. “The share transfers in favour of seven foreign investors were in violation of FEMA provisions. Some of the investors have either not provided any information towards the acknowledgement process or have not responded to the specific information sought by the RBI,” states the March 2011 order of RBI Deputy Governor Anand Sinha. In Rajat Gupta’s case, the Foreign Exchange Department (FED) of RBI during the investigation revealed suspicious transfers of shares allegedly masterminded by Rajat Gupta.......
Sunday, May 27, 2012
RBI to pack in additional stringent steps for banks
Below is the edited transcript of his interview to CNBC-TV18............
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3 pvt banks to insist on minimum balance every month
The top three private sector banks have tightened their minimum savings bank deposit balance norm. Against the normal practice of maintaining minimum average quarterly balance, these banks want customers to maintain minimum balance on a monthly basis. What this means is that customers will have to keep higher balances. The move to get customers to maintain minimum balance on a monthly basis follows the Reserve Bank of India deregulating the savings bank deposit rate in October 2011. The RBI has not stipulated any minimum balance to be maintained in savings accounts to any bank. The RBI guidelines only state that accountholders should get from their banks a month's notice on any change in the minimum balance norm........
Slowdown in growth likely to continue
The worst of the economic slowdown could still be ahead of us, according to a new RBI working paper. The paper ‘‘Evidence of Interest Rate Channel of Monetary Policy Transmission in India'', has suggested that an increase in policy interest rates is associated with a fall in real GDP growth rate. The maximum decline in GDP growth occurs with a lag of two quarters with the overall impact continuing through six-eight quarters ahead...............
Textile, finance ministries to meet next week
The textile and finance ministries are expected to meet next week to discuss restructuring of loans for the textile sector, according to sources. Representatives of the Reserve Bank of India may also attend the meeting. The textile industry, ..............
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My View on 'The paradox of forex reserves'
It is a fact that our Forex Reserves Management has not been getting the attention it deserved, as it depended on borrowed expertise and RBI’s own priorities hovered more around internal debt management and monetary policy concerns. It is comforting to see that RBI governor is focusing on the components of forex reserves and their vulnerabilities. As the returns on forex investments were not encouraging, there has been some complacency in augmenting the reserves position, resulting in the reserves stagnating around $300 billion for quite sometime now. On the part of GOI/RBI, it was a late decision in the last quarter of 2009 to increase the gold component in the country’s forex reserves by about 200 tonnes, by a purchase from the International Monetary Fund. In the context of improving the country's image as one with a decent net-worth, it is important to manage the domestic gold-holdings outside the forex portfolio also and make them visible and available as part of nation’s resources. Let us no forget the 1991 episode when solid gold had to be carried abroad for pledging and borrowing. Such shameful experiences can be avoided in future, if a part of domestic stock of the estimated 18,000 tonnes of gold is made tradeable and part of the ‘stock’ of standard gold.
- M.G.Warrier
India's forex reserves drop by $1.80 billion
....Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.74 billion to $256.11 billion during the week ended May 18, according to the Reserve Bank of India's weekly statistical supplement. The RBI did not provide any reasons for the change in foreign currency assets...........
Rupee fall: Reserve Bank of India can do little to help
.....More than the magnitude of the rupee's depreciation, it is the speed of the decline that is troubling RBI. The recent slide has not caught the central bank unawares . Last year, when the greenback gained, the exchange rate reached 54.305 rupees to the dollar on December 15, 2011. This was an all-time low for the rupee, which had hit a year's low of 43.855 on July 27 - a 23.83 per cent drop in 91 trading days..........
Does the Indian economy have a 1991 crisis feel?
...Last month, in a panel discussion (attended by the prime minister, Manmohan Singh who was the finance minister in '91), RBI governor D Subbarao pointed to macro numbers which were approaching '91 levels. "That is quite a disturbing picture," he said (as quoted by Reuters). "Nevertheless, I would still argue that in 1991 an implosion was imminent, in 2012, an implosion is not." ....................
Rupee may Rebound to 52-levels in 6 months: Barclays Capital
.......Barclays Capital said the RBI may eventually opt to float dollar denominated bonds through public sector banks (like State Bank of India) for non-resident Indian (NRI) investors. If well designed and executed, we think, such a scheme could trigger $12-15 billion of inflows in a relatively short amount of time, the report added. While we expect the RBI to cut repo rate by a further 50-75 basis points by March 2013, we think it is likely to maintain a more neutral bias in the next one or two policy meetings after the larger-than-expected 50 basis points cut in April.
Bank trade unions threaten to go on 2-day stir in July
.....GD Nadaf, Convenor of United Forum for Bank Unions (UFBU) said the central government offices and RBI were working five days a week and asked why banking industry cannot be brought on the same pattern. “An avoidable expenditure towards fuel, water, energy are incurred for half a day work on Saturday. Instead, one-hour working hour may be increased for five days in a week,” ...............
This summer, reap the benefits of travel cards
...........Pre-paid travel/forex cards score over the other options. When you load your card locally, you lock into the exchange rate prevalent on the day you buy the card. With the US dollar being a widely accepted currency across the world, at no time does this proposition make more sense than now. Swiping your credit card when the rupee is depreciating will make you shell out more for every dollar..............
Samajwadi Party toes Mamata line on UPA support
.....He has asked Mukherjee to direct RBI governor D. Subbarao to get NABARD release the amount. The UP chief minister has also written to the RBI governor in this regard and has marked a copy to agriculture minister Sharad Pawar as well.....
Saturday, May 26, 2012
Hacking attempt on RBI website
......"We found the IP address and blocked it and got the website on its feet again," the spokesperson said, adding there was no loss of information or defacing as the hackers could not get into the site. The RBI brass, including Governor D Subbarao and all the Deputy Governors, were in Mussorie, Uttarakhand, on Thursday for the board meeting when the hacking attempt was reported. Further details like the exact time period when the hacking happened and the geographical location where the attack has been traced to, are unclear........
Reserve Bank of India prohibits 25 co-operative banks from accepting fresh deposits
The Reserve Bank of India has issued certain directions to 25 District Central Co-Operative Banks in UP prohibiting them from accepting fresh deposits in order to protect the interest of the existing as well as future depositors of the bank. According to Deputy General Manager of the RBI H.K.Soni the directions have been issued to district central cooperative banks at Aligarh, Allahabad, Azamgarh, Bahraich, Ballia, Barabanki, Basti, Deoria, Faizabad, Farrukhabad (Fatehgarh), Fatehpur, Ghazipur, Gorakhpur, Hardoi, Jaunpur, Kanpur, Lucknow, Mau, Pratapgarh, Rae Bareli, Siddharthnagar, Sitapur, Sultanpur, Unnao and Varanasi.
TOI
Bank unions threaten two- day stir in July
Chennai Trade unions of banks demanded regulated working hours and a five- day week for officers and threatened to go on a two- day strike in July, in support of their charter of demands. G D Nadaf, Convenor of United Forum for Bank Unions ( UFBU) said central government offices and RBI were working five days a week and asked why banking industry cannot be brought on the same pattern. Nadaf said some of the residual issues of the 9th Bipartite settlement like compassionate appointment scheme, improvement to staff loans, corrections to second option on pension scheme were still pending with the IBA/ government. " Instead, one- hour working hour may be increased for five days in a week," he said ahead of the three- day meet of All India State Bank Officers' Federation.
FPJ
New Rs. 5 coins to commemorate 150th year of CAG
The Reserve Bank of India will shortly put in circulation new coins of Rs. 5 denomination to commemorate 150th year of Comptroller and Auditor General of India (CAG). The coin will bear the logo of CAG along with year "1860-2010" on the bottom of the logo............
Changes in draft Microfinance Institutions Bill shocks the microfinance sector
....."This is an upward revision of microfinance that doesn't seem to be in alignment with reality," said Yeshwant Thorat, former chairman of National Board for Agriculture and Rural Development. "I'm not sure whether this is consistent with equity and social justice," Thorat added...................
Why the MFI Bill is flawed
....Banks lend to MFIs at about 10 per cent instead of directly giving loans to the SHGs. The MFIs in turn lend at high rates ranging from 24 to 60 per cent to the poor. In addition to banks, the micro-finance sector gets support from apex agencies such as Rashtriya Mahila Kosh and Nabard in several other ways. Also, as the Malegam Committee (a subcommittee of the Central Board of Directors of the RBI) found, banks were holding securitised paper issued by non-banking financial companies (dealing with microfinance) worth Rs 4,200 crore. Banks and financial institutions had also invested in the equities of such companies. The Committee found that over three-fourths of finance obtained by .....
Basel III- not a matter of if but when
............And similarly, the Reserve Bank of India has told domestic banks they must start reporting on aspects of Basel III liquidity strength measures from as early as June this year, ahead of the reporting timetable laid out by the Basel Committee. Furthermore, it has stipulated that banks go above and beyond Basel III requirements and provide a statement outlining their bond spread movements compared to their share price in a bid to better monitor early signs of systemic risk.........
Rakesh Mohan condemns 'metro mania' amongst urban transport policy makers and planners
Metro projects should be restricted to cities with over 5 million population and all urban transport costs should be borne by cities through user charges and fiscal imports, said Rakesh Mohan, Chairman of the National Transport Development Policy Committee today...................
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The malaise within
The growth of the last two decades had been properly utilised, India’s GDP would have been several times more
The Indian rupee has touched a record low of 56 per dollar and continues to go down. The interventions of the Reserve Bank of India have been of little avail and the finance ministry remains clueless as to how to reverse the trend. Two years ago the rupee-US dollar exchange rate was at around 44.00. Thus, there has been a fall of about 25 per cent during the last two years. Rupee has been on the decline consistently and is expected to fall further in the near future.
Welcome the fall
.....A falling currency is a sign of weakness, and the decline of the rupee reflects the many ways in which the economy has been mismanaged; the loss of competitiveness gets neutralised through a cheaper currency. Some players may have got caught unawares by the sudden drop, but commentators have woken up to the positive macroeconomic effects of the rupee’s depreciation. Players should be relieved that a key element of macro-adjustment has been more or less achieved — partly through fortuitous commodity price movements. While ........
Rupee slide: RBI Governor meets Manmohan Singh
A day after hinting that the central bank would take necessary steps to arrest the rupee's slide, RBI Governor D Subbarao today met Prime Minister Manmohan Singh and is believed to have discussed the issue with him. Although the rupee has recovered after yesterday's announcement by Subbarao on the possibility of selling dollars directly to oil companies, it had fallen to 56.07 to a dollar in the morning trade, after yesterday's close of 55.65..............
We will look beyond consumption expenditure to estimate poverty: C Rangarajan
Suresh Tendulkar is a reputed economist, known for his work on poverty. Why has the new committee been appointed when his estimates of poverty were already there?
This committee has been appointed due to concern over estimating poverty using the Tendulkar committee’s method. We need to look at how to define and measure poverty. So far, the level of consumption expenditure has been used as a way to estimate poverty. This is based on the basket of goods and services, and estimated using the least possible level to sustain someone. It is adjusted for price increases and consumption patterns every five years.....
RBI Central Board of Directors meets today at Mussoorie
Dehradun, 24/May/2012 : The Central Board of Directors of the Reserve Bank of India met today at Mussoorie, Uttarakhand. Dr. D. Subbarao, Governor, Reserve Bank of India chaired the meeting. Directors Dr. Anil Kakodkar,Kiran S. Karnik,M.V.Rajeev Gowda,Y.H.Malegam,Dr. Indira Rajaraman and Dr. Najeeb Jung, as also, Government nominee director on the Central Board D. K. Mittal, Secretary, Financial Services attended the meeting. Deputy Governors Dr. K.C.Chakrabarty, Dr. Subir Gokarn,Anand Sinha and Harun R. Khan were also present. The Board reviewed the current economic situation and global and domestic challenges and policy responses..............
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