...........Like the previous two domains, managing global macroeconomic stability has also seen paradigm shifts. The dominant International Monetary Fund (IMF) view of the world was shaken by the obvious inappropriateness of its recommendations in response to the East Asian crisis in 1997-98. This led to the affected countries and their similarly endowed neighbours emphasising the value of self-insurance, in the form of rapid accumulation of foreign exchange reserves. This assured them some independence from the multilateral framework in the event of another crisis. But......
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.
Monday, November 4, 2013
RBI may have more role for Nachiket
How does the monetary policy work?
....Through
its monetary policy, a central bank can affect the demand in the
economy, but it has no power to affect the supply. When growth falls,
the central bank may reduce the repo rate. As this monetary signal works
its way through the economy, the rates for all sorts of loans fall.
This stimulates the demand and helps the economy return to its potential
growth rate. Sometimes the growth rate is............
Know why Kuber is placed at the entrance of Reserve Bank of India Office in Mumbai
......As per our ancient texts like Puranas, a sage by the name of Vishra is believed to be the father of Kuber. That is why Kuber has been referred as Vishraa by the ancient literature. Due to the Kuber’s association with glory, splendor, prosperity, grandeur, and affluence he was chosen to be kept at the entrance of the Mumbai office of the Reserve Bank of India to ensure the treasury of the Indian government never remains empty.............
Four person in police custody for videography of RBI, VIdhan Bhavan
.............The youths revealed that they were given a contract to gather information about security of RBI, Vidhan Bhavan and other sensitive areas. With this information, city police and intelligence agencies have been alarmed. Cops have started investigating about the person who gave the contract about gathering the details.
RBI, banks firm up regional focus ahead of proposed bifurcation
........The financial regulator RBI is mulling an umbrella model in this regard. The regulator’s Hyderabad centre will continue to be the financial capital for the bifurcated regions according to a highly placed source at RBI. The regions will be brought under the jurisdiction of the RBI at Hyderabad, a regulatory model that is in place in the newly created States – Uttaranchal, Chhattisgarh and Jharkhand according to him...........
Fake money menace on the rise, cops worried
............Sources from Pune crime branch said that the counterfeit notes, which are difficult to identify without a detection machine, have flooded the city. The local traders, shopkeepers and banks are the worst hit. The state ATS had arrested an alleged operative of the Indian Mujahideen (IM) two years ago and recovered fake currency notes, which he was allegedly using to raise funds for terror activities. So far, the investigators have established a link to Bengal where fake currency notes are pumped through Bangladesh. .............
Cash in Hand
........... "The RBI expressly forbids people from writing anything on a note. But cashiers write on the uppermost note of a pile routinely, this is something which happens every single day." To complicate matters further, the FICN seized of late in the capital has been of a superior quality, fooling even experts (The micro-lettering used by the RBI has been mimicked, in certain cases)................
Different strokes
Gone are the days when the Finance Ministry used to react to monetary policy changes by the Reserve Bank of India. Often, the Finance Minister himself would make a brief statement, which would be followed by an official release. But when Raghuram Rajan raised the key policy rate by 25 basis points at the policy review on October 29, the minister and his ministry kept mum. Quite a change from the days when Finance Minister P. Chidambaram used to react rather sharply after rates were raised.
- HBL
Pencil in another rate hike
...........So, predicting what a central banker would do when he looks at the heat-map is easy. Policy rates will be raised to tame prices. And if inflation is accompanied by high growth, the decision is a no-brainer. But that’s not the case in India at the moment. GDP growth has slipped sharply to 5% in the last fiscal and prospects for the current one are worse. CRISIL expects growth to slow further to 4%. This creates a dilemma: should RBI focus on growth or high inflation? This is hotly debated every single time before the announcement of the monetary policy. We argue that a sluggish economy does not mean RBI should become tolerant of high and rising inflation. Therefore, the decision to raise interest rates on October 29—which implies that risks from high inflation outweigh risks from low growth—was appropriate...........
Inflation busting outplays growth angst
.....Further, RBI has pushed its case for sustained growth by enabling banks to draw money from the central bank if necessary for financing projects affected by liquidity shortfalls. Under the circumstances, it is investor confidence and debottlenecking of infrastructure projects which can push growth further. A semblance of normality has returned to the broader economic outlook with the current account deficit becoming manageable and rupee not facing imminent danger. Yet, RBI’s persistent anti-inflationary stance suggests anticipations of below par or nominal growth in the current fiscal.........
Salutary messages from the RBI
..........Normalisation of monetary policy rates indicates that the repo rate will be restored to its pre-July position of being the policy rate. Under normal circumstances that would be a signal to banks to raise their interest rates. But the MSF has been brought down, and the short-term repos will now provide more liquidity. Understandably, many banks have reacted cautiously, waiting to study the full implications............
The Montek school of thought
..........Ten years is a long time for any tenure. It is, therefore, logical to ask what imprint Ahluwalia has left on the working style of the Planning Commission. Or, for that matter, what difference he has made in the Planning Commission's role in governance and overall approach to policy-making. For such an assessment, it is important to understand the context in which the Planning Commission was set up...................
Green shoots?
.....What accounts for this small but possibly significant turnaround? Management of the external economy, particularly after Raghuram Rajan took over as Reserve Bank of India (RBI) Governor, is certainly a reason. Whether or not pure coincidence, India’s foreign exchange reserves have risen by $8.1 billion since September 6 (two days after Rajan assumed charge). This is despite.......
A vision of sustainable growth
Is India doing as well as it wants to? We were proud of our GDP growth when it was high; now we are dismayed. Even in those years of high growth not so long ago, we were not happy with the progress of inclusion in growth, and the pace at which social and economic inequalities were being reduced. Nor could we be happy with the deterioration of our natural environment in our hunger for material and GDP growth........
Options Get Legit, Now RBI should Act
.....Sebi’s change of heart may prove to be a game changer for equity
investors and is certain to aid investor sentiment. However, it is now
hoped that the RBI too would be changing its antithetical stance towards
options. RBI has been known to take a “view” that any optionality in
securities in favour of foreign investors makes the investment take the
colour of a debt and, therefore, non-FDI compliant. This view has been
causing practical roadblocks in the way of ........
Tale Of The Tumbling Rupee
.....One of the capital control measures adopted by the Reserve Bank of India is the reduction of the cap on outward flow of remittances from $200,000 to $75,000 per year, which could slow down investments in Dubai’s real estate sector........
Below-the-line is the best bet in rural India
In the late nineties of the last century, the Reserve Bank of India introduced new norms setting limits based on the ratings of individual businesses; whereby NBFCs (Non-Banking Finance Companies) were restricted from taking deposits from the public. Though these norms were well meant, yet they adversely affected well managed NBFCs like the Shriram Transport Finance Co (STFC).........
Rising inflation: Have food prices delinked from agricultural production?
.......But here's the problem. Few observers, including the RBI, seem to expect any substantial moderation in inflation, or in the actual level of prices. "The price level is expected to remain high," says Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices (CACP), a government body which advises the government on agricultural price policies such as the minimum prices offered to farmers for grain.............
Are banks wrongly branding people as defaulters?
.........That brings us to the subject of this article. The pendulum has perhaps swung away to the other extreme from the time when banks were helpless spectators to a borrower defaulting, to the current scenario where a bank has the power to deny credit to the borrower if he defaults with them. While it is not my intention to bat for defaulters, people being wrongly branded as defaulters is a very serious issue, especially where banks have this power completely in their hands..........
High interest riddle in state savings scheme
............According to analysts, despite the low fund costs, it will be a tight ropewalk for the state-run corporation as it will have to depend on a large number of depositors to make the scheme viable. Moreover, change in interest rates by the Reserve Bank of India and the macroeconomic condition will also affect the scheme's performance.
Insurance cover no big deal for company deposits
.........The Act also bars companies from promising huge returns and hefty commissions to agents, in excess of the prevailing rates prescribed by the Reserve Bank of India (RBI) for such deposits. The premium paid cannot be recovered from the depositor and the money has to be paid by the company alone. Also, the mandate to maintain a balance in a reserve account would push up costs for companies. It isn't clear whether companies would earn any interest on the reserve account, but it wouldn't be much, even if they do. Simply put, these proposals will make deposits an expensive source of raising funds. This means ...........
Banks told to set up ATMs in all gram panchayats in Karnataka
..........In the first six months of the current fiscal year, the RDPR spent Rs. 850 crore and deposited Rs. 500 crore in banks for payment of wages to beneficiaries. Following the poor performance of business correspondents, delay in the payment of wages by banks, and also to reduce travelling time and expenses, the RDPR has asked to conduct mapping of all GPs to set up ATMs. Sudhir Kumar Jain, chairman of State-level Bankers’ Committee, and Managing Director of SyndicateBank, also suggested that banks explore the option of setting up ATMs in GPs.......
Give Civil Servants Cash, not LTC
.....State-owned banks are thinking of changing the rules that govern the LTC regime, but that will not help. What could, is to scrap the allowance altogether and pay the
money as a part of bureaucrats’ salaries. There is no point, apart from
ducking a little bit of tax, in distributing travel or other allowances separately from the pay cheque..........
Shobhan Sarkar writes to PM seeking transparency in excavation
.....Sarkar sent the letters yesterday, demanding amendment to the Indian Treasure Trove Act so that the recovered gold could be handed over to the Reserve Bank of India. He also sought complete transparency in the ongoing excavation and asked the government to allow common people to the site and live media coverage of the excavation. .........
Saturday, November 2, 2013
RBI: Monetising the Tale of Two Governors
......Subbarao too had hiked REPO rate several times to moderate inflationary pressures. However, the same action from two RBI governors received quite separate reception from Markets, Analysts, Industry and Columnists. Subbarao was faulted time and again for not paying required attention to the anaemic growth of the Indian economy; and for being unduly and narrowly fixated on inflationary pressures. Critics said that inflationary pressures were on account of supply side constraints -falling production, and not due to rising demand expectations. Partly this carried some weight in view of the negative growth posted by automobile industry and manufacturing sector. However, the sticky food and non-food inflation as measured by Consumer Price Index (CPI) worried Subbrao as it has Rajan. However, while Subbarao was skewered for his alleged hawkish anti-inflationary posture, Rajan received for same action a very indulgent reception............
Read.......
OBC inaugurates new branch in city
Oriental Bank of Commerce (OBC) has opened its 49th branch in the state at Cuttack-Puri Road, Bhubaneswar along with an ATM counter. P K Jena, Regional Director, Reserve Bank of India (RBI) inaugurated the branch in the presence of Gautam Sinha Ray, deputy general Manager, OBC.............
Women bank to be launched on Indira's birth anniversary
The government has drawn up plans to launch country's first all women bank - Bharatiya Mahila Bank - on November 19, the birth anniversary of former Prime Minister Indira Gandhi. “We have asked the Election Commission for permission. The bank might be as well inaugurated on November 19. All work has been completed. But......
New Chairman for National Payments Corp
Rural banks asked to promote Rupay cards
A team of NPCI, the Central organisation mandated by RBI and Indian Banks Association (IBA) to build central infrastructure for payment systems like ATM switching, mobile payments, 24x7 remittance and financial inclusion transactions, visited Nuapada district and advised Utkal Gramin Bank to issue RuPay cards to their customers on a priority basis..................
Usha Sangwan to be first woman MD at LIC
MUMBAI: Usha Sangwan will be the first woman managing director at the Life Insurance Corporation of India in its near six decades of existence. She may well be a trendsetter at LIC, like Kishori Udeshi at the RBI, who started a glorious tradition of women rising to higher positions that for decades have been male bastions.
ET
Bomb scare leads cops to 'dollar scam'
........When someone falls for their scam, the Nigerians give them the black papers, claiming that these are defaced US dollars which can be restored through the use of a special chemical. They charge the victim for cleaning the 'dollars'." Police inspector (crime) R Devare said that the suitcase also contained some foreign currency. "The currency and black paper bundles have been sent to RBI for analysis."
Jalan panel to finish vetting bank licence bids in 3 months
....The panel held its first meeting in New Delhi on Friday, to discuss the process. All the panel members — Jalan, Usha Thorat, former RBI Deputy Governor; C B Bhave, former chairman of the Securities and Exchange Board of India, and Nachiket Mor, board member of RBI, attended. RBI Deputy Governor Anand Sinha, who prepared the licence norms, also participated. “We discussed everything. The focus was on how to go about the processes and the parameters for the screening,” said a person privy to the discussion.............
Raghuram Rajan fuels best BRIC rally as Barclays bullish
Indian bonds were the best performers among the four largest emerging markets last month and Barclays Plc recommends buying as central bank governor Raghuram Rajan boosts cash supply and steps up his fight against inflation...........
Dr Rajan, will RBI look after consumer protection finally?
........To turn these stories into evidence, RBI needs to first stop being in denial. All attempts to alert RBI in the last seven years have run into the “it-is-not-my-problem” wall. It has been RBI’s considered view that mis-selling by bank staff is the problem of the product regulators and not of RBI. This is like a hospital blaming the pharma company for the medicine when it is the doctor who prescribed the wrong drug and harmed the patient. The medicine was not harmful, but was “unsuitable” for the disease the patient had. Much like an artist with irregular income wanting a fixed deposit for a lump sum she had, being sold a 15-year annual premium life policy by a bank that is always awake..............
The Udhna Citizen Co-operative Bank Ltd., Surat, (Gujarat) now under RBI Directions till May 1, 2014
The Reserve Bank of India has extended the period of directions imposed on The Udhna Citizen Co-operative Bank Ltd., Surat for further six months. The Bank will thus continue to be under directions from November 2, 2013 to May 1, 2014. The modified directive has been displayed on the bank premises for interested members of public to peruse............
Gold coins just a click away
......However, with the market practically running out of gold coins, residents have opted for a smarter, easier and a handier way of digging the gleaming yellow metal, by simply going online.
...........
Hedging interest risk
..............It is good that the RBI under its new Governor is convinced about allowing cash-settled IRF trading. A change in the underlying asset for these contracts, from notional to market-traded bonds, would equally help. The regulator should further permit this segment to function in the same manner as equity derivatives, without too many trading restrictions. It will enable efficient hedging and...............
All is not well with the Indian economy
.....India’s economic growth crashed to a four-year-low of 4.4% during April-June this year from 4.8% in the previous quarter, proving fears of a widespread slowdown as factories are producing less, companies are offering fewer jobs and prices continue to remain high. The estimates of India’s gross domestic product (GDP) — the broadest measure of value of all goods and services produced in the country — demonstrate a deeply hurt economy hit by a toxic mix of a free-falling rupee, dipping investment, high borrowing costs and rising prices. From a foreign investors’ darling to an economy characterised by policy flip-flops, the Indian economy’s turnabout has been as rapid as the heady 9%-plus growth it had once clocked during 2004-2008. Many analysts reckon it could get worse.............
Bittersweet news on interest rates
........Should it be considered as good news on lending rates? No, not yet. Borrowers will have to wait for the banks to size the situation — whether it is conducive to pass on the reduction. As of now the home loan rates have neither been increased nor decreased and remain at last month’s level. The festive offers continue, which should be a good opportunity for home loan seekers to enjoy the benefits such as lowered interest rates and reduction in processing fee. Since the RBI is concerned that deposit mobilisation is not happening aggressively banks will have to borrow from other sources to meet the credit demand...........
Step taken by RBI to help combat inflation: Chidambaram
.........He said that export figures have been good for the last few months and the recent steps taken by the Reserve Bank will help in combating inflation. Momentum in export growth will continue in remaining part of current fiscal, Chidambaram said............
Chidambaram defends Rajan’s rate hikes
........Rajan has hiked the repo rate twice by 25 basis points each since he took over as RBI Governor. But, unlike in the tenure of the previous Governor, D. Subbarao, this time neither the Finance Minister nor his Ministry reacted on the day the policy was revised. However on Friday, Chidambaram broke his silence and said that the monetary policy had to be understood in the context in which it had been presented..........
Supreme Court upholds U K Sinha's appointment as SEBI chief
The Supreme Court on Friday upheld the appointment of U K Sinha as SEBI chairman, saying it was done by the government fairly and in accordance with the procedure of the law. A bench of justices S S Nijjar and P C Ghose dismissed a PIL challenging the appointment of Sinha, observing that the petition was not maintainable on various grounds but it had decided to hear it as the appointment to a very senior position was challenged..........
Friday, November 1, 2013
Duvvuri Subbarao: On India, technology and the importance of authority
Inflation tilts the balance - Dr.S.S.Tarapore
........While the Urjit Patel Committee will no doubt throw fresh light on strengthening the monetary policy framework, it would be useful if it were to give attention to the business cycle and the imperative need to take policy action before the upper turning point of the cycle is reached. In India, unfortunately, action is invariably taken after the upper turning point is reached, and if, corrective measures are delayed, the downturn gets aggravated. Again,...........
How the RBI can be made more accountable—Part 3
......... In other words, unless the RBI becomes the change that it wants to see on the ground in the financial sector, I am afraid that there will be very little action on the ground in terms of accountability! So, what needs to be done to help move the RBI to a more accountable entity, from a long term perspective? We discuss this briefly in this final article in the series on RBI’s accountability!..........
Exclusive Interview: Raghuram Rajan - Good thing about democracy is that it pushes the system to find solutions
.......I don’t take credit for markets movement. What we have to focus on is a stable macro economic environment. We have to bring inflation down. That is the best way we can help growth. We can help growth in other ways. Let us try and increase the reach of the financial sector to every village. We can give people good instrument for saving like inflation indexed bonds. ...........
Dearness Allowance Increase for Bankers from November 2013 to January 2014
............Based on the above calculations the new DA will be @ 96.15%, for the months of November, 2013 to January 2014. [The DA for August 2013 to October 2013 was 88.95%] i.e increase of 7.20 %. (increase of 48 slabs) We give below the DA for November, 2013 onwards vis a vis.............
Read..............
Read..............
Financial Inclusion Makes 2.5 Lakh Villages Bankable
....“In
India, we believe that financial inclusion has the potential to bring
in the unbanked masses into the formal banking system, which could lead
to increased savings, eventually leading to economic growth,” RBI
executive director G Padmanabhan said last week in Paris during a panel
discussion at the Joint European Central Bank and Banque de France
Conference. ...............
Evaluation desirable..........
My View on "Financial inclusion is not a new dispensation - Dr...":
The presentation is a status report on Financial Inclusion with a good analysis. However there are a few points that need closer attention;
1. The low per capita credit to Basic Savings Deposit account holders is worthy for a detailed look and this will provide the actual risk under FI that the banks would be willing to take under the score. The penetration is still very low.
2.The Aadhar linkage: Direct Benefit Transfer - it is more on the instruction than implementation. My individual survey indicates that 60 percent of cooking gas subsidy linked to aadhar has not been credited even after two months of delivery of the cylinder in the urban areas due to the NPCL not crediting or delayed crediting of the subsidy to the linked account of the concerned bank; where credited the banks have been taking anywhere between 7 and 15 days for extending credit into the accounts. When this is the scenario of urban clients the rural areas where the clientele are less literate the problems would be much more complex. Further, the Supreme Court has ruled that the linkage cannot be insisted and it does not have legal sanction. Now it is in a limbo. How do NPCL and Banks streamline the whole process and assure proper delivery of the intended DBT? A deeper probe and analysis is required.
3. The FLC programmes require an annual evaluation not as to the number of programmes rolled out but to what extent the trainees have secured the benefit out of these programmes and how it translated to better the FI efforts.
- Yerram Raju
A wider mandate needed
My View on "Bank licence: RBI may miss deadline":
The process for opening some more banks in the private sector was set in motion with the release of a discussion paper on the subject by RBI more than three years back. Like allowing commencement of any other business which is not prohibited by law of the land, ideally, it should have been possible for any individual or organisation to apply for a banking licence and RBI should have been in a position to grant or reject the application based on the need for a bank and the eligibility of the applicant to run a bank. The impression being created is that policy in this regard will be decided by North Block (read Finance Ministry) and Mint Street (RBI) based on their perception of eligibility of applicants for licences, which perception changes on an ongoing basis.
Clarity is only on one point which seems to be the government’s anxiety ‘that some licences are awarded before next year’s Lok Sabha election’; if possible, by the end of the financial year (March 31). On August 27, 2013, Reserve Bank of India has released a Discussion Paper on ‘Banking Structure in India – The Way Forward’. The Discussion paper has identified certain building blocks for the reorientation of the banking structure with a view to addressing various issues such as enhancing competition, financing higher growth, providing specialised services and furthering financial inclusion. It has also emphasized the need to address the concerns arising out of such changes with a view to managing the trade off for ensuring financial stability. It would be in the fitness of things if the Jalan Committee appointed by RBI to vet new bank licence applications is expanded and given a mandate to take into account the issues raised in the RBI Discussion Paper of August 27 and give the committee’s views on the eligible candidates from the 26 applicants conforming to the performance needs envisaged in the Discussion Paper and suggest structural changes in the banking system for further policy initiatives.
- M G Warrier, Mumbai
Only merit matters
In response to a query at a news meet, Raghuram Rajan had to reiterate “I am an Indian citizen” (Business Line, October 30). Merit is the only consideration in such appointments; issues like citizenship should not even be raised. Let us not forget that the first Governor of the then newly-constituted Reserve Bank of India in 1935 was an Australian. Recently, the British Government appointed a Canadian, Mark Carney as Governor of the Bank of England, to succeed the well-known Sir Mervyn King, as the government wanted the kind of experience the former had. Many Indians hold a Green Card to live in the US and gain wider experience and better work ethos.
- K.U.Mada, Mumbai (HBL)
Situations vacant
The economic division of the finance ministry has been headless since September when Raghuram Rajan moved to the Reserve Bank of India as governor, and a replacement looks unlikely anytime soon. Meanwhile, the division has suffered another vacancy..........
MBA arrested for selling 'RBI bonds'
.....In one such case, Kulshreshta promised Sanjita Hadimoni a role in a film, provided she gave him Rs 22 lakh. He told her he would invest the money in bonds. Hadimoni, who is from Dubai, gave him the money and the accused made fake gold bonds and posted it to her. The documents not only contained the name of the woman, but also bore the stamp of the Reserve Bank of India (RBI). When a relative who worked at the RBI told the woman that the documents were fraudulent, she asked for her money back. Kulshreshta allegedly harassed and threatened her. The victim then lodged a complaint at the Dindoshi police station...........
Four Nigerians get 3-yr RI for online fraud in unique ruling
............The accused had created email IDs resembling that of prominent organisations like the Reserve Bank of India, Bank of India and Coca Cola, and used to send emails to people informing them that they have won lotteries and if they want to encash it they would have to deposit certain amount in a bank account number provided by them (Nigerians).......
Banking on safety
In the light of volatile fluctuations in the stock market, precious metals, real estate, and so on, small investors have limited investment opportunities, especially in rural India where people do not have adequate knowledge about diversified investment avenues such as mutual funds, corporate deposits and the stock market. Bank deposits are considered the best investment option. Lakhs of senior citizens prefer only bank deposits, which guarantee them assured returns on their investments, to see them through life. Though bank deposits are safe, the returns are not so attractive when compared to other investments such as SIPs, corporate deposits, and so on. TDS deduction on interest will further reduce the returns. On an average, the depositor will get a maximum of only 8 per cent return (after TDS) on bank deposits. Hence, TDS should be discontinued. Alternatively, the present interest limit of Rs 10,000 for TDS should be increased to at least Rs 50,000; the benefit should be extended at least to senior citizens, who depend totally on interest income.
- Udaya Sankar (HBL)
Euphoria of the 5 per cent
.............What difference will the central bank’s estimates of a marginal spike in GDP make to our perception of economic growth? For those who consider India an emerging economy such as South Korea, Japan or even Iceland, perhaps a GDP of 5 per cent would be wonderful. But in order to think this way they would have to also deal in and perpetuate a fiction in which the expansion of one part of the national economy suffices to determine the destiny of the whole..........
Repo as key rate
This is with reference to the editorial “A mixed bag” (Business Line, October 30). All this while, RBI governors prioritised inflation over growth. As a result, the apex bank has been forced to reduce the growth forecast to just 5 per cent for the current fiscal. While the RBI governor’s move to envisage ‘repo’ as the key policy rate is welcome, he needs to cross-check whether this will bring the desired outcome. The RBI has failed to hold back food inflation even after successive rate hikes. This is mainly due to the rise in fuel prices, particularly diesel. This is a peculiar situation that exposes the lack of coordination between the government and the RBI. On the one hand, the government is increasing fuel prices every month and, on the other, the RBI continues to sacrifice growth by putting the blame on inflation. Both these entities should work in tandem to put the slowing economy on track.
- Vivek Mathai George (HBL)
CPI raps Rajan for 'opening up banking sector' remark
..............On Rajan's recent statements about major reforms being in the offing that would allow foreign banks to enter India in a big way and even take over domestic lenders, he said while 80 percent of banking activities were carried out by state-run banks, "foreign banks have never contributed to the development of the Indian economy." "Some of these banks have also been responsible for serious unethical practices," he said and also criticised the government for earlier allowing private sector to open banks.......................
India: Rajan steadies the ship
.........The government has been spending too much, and been too slow to deregulate the economy to encourage investment. Rajan has steadied the ship, but the government must get its act together if the recovery is to last.
Industry is obsessed with interest rates: C Rangarajan
NEW DELHI: Prime Minister Manmohan Singh's economic advisor C Rangarajan hit out at Indian business for its criticism of the central bank's latest monetary policy, saying that industry was obsessed with interest rates and backing governor Raghuram Rajan's push to rein in inflation. He also said that India's growth this year would be...........
Rajan shows no innovation
.....However, governor Rajan’s two policies are in fact too cautious. These do not reflect any proactive approaches that were expected from a person with global exposure and financial elan. Maybe, the fault lies more in expectation than in the execution of a policy in the current situation. But surely this is not the kind of approach that will bring a spring back into the economy.
FOMC meet outcome: Bernake takes over from where Rajan left off
.......However, party for the Indian stock markets, which have already been on an upward spiral since the Reserve Bank of India (RBI) governor Raghuram Rajan reviewed the Monetary Policy on Tuesday, could continue for some more time as a result US Fed’s stance as this would keep the FII flows coming into emerging markets (EMs) like India. For the markets, Ben Bernake has taken over from where Rajan left off..............
Muthoot Finance aims to become financial supermarket
Kerala-based Muthoot Finance, which has applied for banking licence, is aiming for an image makeover to transform itself from being just a gold loan company to a financial supermarket. "Muthoot is the only company from Kerala which has applied for banking licence," Chairman M G George Muthoot told reporters here................
Bank washes hands of Mamata's savings scheme
......... State-run Allahabad Bank, one of the four 'collecting banks' for the scheme, on Thursday dissociated itself from it saying that the bank was included without consent. While the scheme has already generated a 'lot of interest among people', the bank has declined to be a part of it saying that it needed further clarification from the Reserve Bank of India (RBI).......
Is New RBI Bond as Good as Gold?
.........On Tuesday, the Reserve Bank of India said it will issue the instruments, which will have a ten-year tenure, starting November or December. The rate of interest on the bonds will be a fixed rate plus inflation. Although world over such bonds have been used as a way to attract small investor savings, India is only now issuing them. Mr. Rajan’s Diwali gift is more than a kind gesture. It is squarely aimed at weaning Indian investors from buying gold, which is traditionally viewed as a safe hedge against inflation........
His dream a joke, sadhu now says give me 10 hrs, I will give you gold
.........Speaking at his ashram in Buxar, Sarkar said he knew the "exact location" of the gold. Demanding that the Army be roped in for the excavation, Sarkar said he could deliver the treasure within 10 hours. However, he said, the government would have to accept his terms — deposit 80 per cent of the gold in the Reserve Bank of India and use the remaining 20 per cent for the development of the region...........
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