VITALINFO

Friday, August 24, 2012

RBI’s Laundry List to Govt for Cutting Rates

MUMBAI: The Reserve Bank of India (RBI) has listed a litany of problems the hobbled Manmohan Singh government needs to address to prevent the economy from plumbing new depths, as lower interest rates alone won't pull the economy out of malaise.........

Read - ET

Interest on CRR, a big mistake - S.S.Tarapore

......From a macroeconomic policy viewpoint, it is convenient to slur over hard policy options by forcing the RBI to reintroduce interest payment on CRR balances. It has taken the RBI the good part of 20 years to claw back the effectiveness of the CRR instrument. Many years ago, I had called the payment of interest on CRR balances as one of the mortal sins of central banking. Having expiated this sin after a 20-year battle of attrition, the Praetorian Guards of the RBI should ensure that it does not revert back to this mortal sin. The RBI would do well to recall the words of the Prophet Zarathushtra: “He who learns nothing from the past will be punished by the future”.

Read - HBL

RBI branch in Shillong

Spandan Borah, Guwahati (Aug 22): To boost its presence in the Northeastern region, the country’s central bank is all set to open its third office in Shillong on August 24. The new sub-office will be inaugurated at 11 am on Friday by the Deputy Governor of the RBI Dr K.C.Chakrabarty, an RBI press release stated. The RBI Shillong office will be housed at Apphira Building, Fruit Garden along the Shillong-Jowai road. Thirty banks are currently operational in Meghalaya, according to statistics available on the RBI website. Of these, 26 are commercial banks, three co-operative banks and one regional rural bank. Incidentally, the central bank has offices in Guwahati and Agartala in NE. The RBI data paint a dismal picture for the state where commercial banks cover 61 per cent of those in the banking network while the regional rural banks account for 22 per cent of those in the realm of banking leaving cooperative banks to cover the rest. The apex bank has also expressed its anxiety at the low level of credit deposit ratio in the state. Its report says that the overall CD Ratio of the state has shown a little improvement to rise from 30.96 per cent as on March 31, 2011 to 37.04 per cent as on March 31, 2012. “Banks with unsatisfactory performance were advised to gear up their performance so as to achieve a benchmark level of 40 per cent. They were specifically advised to augment flow of credit to agriculture, MSME sector and education loan in order to give a fillip to these sectors,” the RBI report reads.

Seven Sisters Post

Open secret

A reputed business school was hosting a Reserve Bank of India Deputy Governor for a conference. When asked about media coverage for the event, the communications officer of the business school expressed utter surprise that the press even knew about it. Apparently, the conference was a closed-door one that was supposed to be out of bounds for the media. The business school administration, however, had reckoned without the central bank’s transparency. RBI had, in fact, proudly announced details of this conference on its website.

RBI versus PMEAC

Apart from differing on the GDP forecast, RBI counters PMEAC projection of meeting the fiscal deficit target

RBI’s Annual Report, released just six days after the PMEAC’s Economic Outlook, is hard-hitting and gloomy at the same time. RBI has placed on record the hard reality that we should now see clearly and has also indicated that we need a very big overhaul of the way in which we operate, but this, unfortunately, does not seem to be forthcoming.

Read - FE

RBI stays hawkish, urges govt to trim expenditure

The Reserve Bank of India (RBI) said on Thursday that fighting inflation remained the cornerstone of its monetary policy, and urged the government to cut expenditure, indicating it was unlikely to act soon to ease rates despite slowing growth............

Read - TOI

Financial inclusion: India scores poorly on global stage

....RBI has admitted that they have faced criticism from extreme votaries of strong interventionist policies to promote financial inclusion and it was argued that such directed lending rates leads to mis-allocation of resources. However, the central bank said it has striven to ensure a balance between equity and efficiency considerations so that financial inclusion is furthered while not compromising on the financial health and the lending capacities of the banks......

KEEPING IT SAFE Bank fixed deposit returns on investment of Rs1 lakh
Bank Name	Duration	interest (%)	amount (Rs)
The Catholic Syrian Bank	Above 2 years to 3 years	10	1,33,100
State Bank of Bikaner & Jaipur	3 years and up to 5 years	9.5	1,31,294
Dena Bank	3 years to less than 5 years	9.3	1,30,575
ICICI Bank	2 years to less than 5 years	9.25	1,30,396
HDFC Bank	2 years 17 days to 3 years	9.25	1,30,396
Bank of Baroda	1 year and above up to 3 years	9	1,29,502
State Bank of India	2 years to less than 3 years	9	1,29,502
Punjab National Bank	1 year to 5 years (except 111 days)	8.75	1,28,613

Friday, August 24, 2012

For the first time, Reserve Bank today quantified the cost of implementing Basel-III norms, pegging the recapitalisation needs of the banking system at Rs 1.75 trillion, but added that it is manageable........

Increased government borrowing posed a challenge for the debt management operations of the Reserve Bank of India (RBI) in 2011-12. However, the central bank successfully completed the fund raising on behalf of the government of India through efficient open market operations (OMOs).......

Thursday, August 23, 2012

Wednesday, August 22, 2012