The importance of being Basu

…..Basu in that sense was a greenhorn in the government system, having had no experience other than in academia. Even when he was in the World Bank for a short stint, he was given an academic designation of a visiting professor. So the Indian government indeed went out of its way to appoint him as its chief economic advisor. At around the same time, the government opted for another non-government economist to be the deputy governor of the Reserve Bank of India (RBI). That was Subir Gokarn, who until then had experience of only working in academia, a think tank and a global rating agency, but not in the government. Gokarn’s appointment, too, was unusual………….. 

Read............

Govt to amend law so RBI can sell 1% stake in Nabard

......“The decision was taken that RBI’s equity will get transferred to the government. But the complete transfer could not take place because the laws say that equity shareholding in Nabard will be jointly held by the government and RBI,” a finance ministry official said, requesting anonymity. “The change in the law will ensure that the complete stake is held by the government.” Nabard chairman Prakash Bakshi confirmed the development........

.......Through the Nabard amendment Bill, the government will also combine the posts of chairman and managing director.  “Combining the two posts is in line with the industry practice,” said Bakshi. “Most of the banks have one post of chairman and managing director.”

Read............

HDFC Bank set to open rural one-man branches

.......... Earlier this month, the Reserve Bank of India (RBI) had asked the state-level bankers’ committees (SLBCs) to prepare schedules for covering all unbanked villages with a population of less than 2,000. SLBCs are to then notionally allot these villages to banks for providing financial services in a time-bound manner. RBI is to issue a detailed guideline soon…………….

Read.........

Larger SC bench to examine cheque bounce cases' conflict

New Delhi: The Supreme Court has referred to a larger bench the question whether a person can be tried for a cheque bounce, even before the expiry of the 15 days notice period issued by a complainant...........

Read.............

For more fact than fiction in statistics

.........The declining quality of official statistics relating to the economy has been a serious concern to economists, researchers, analysts and policy makers in recent years. In recent months, economists as well as the RBI have been critical of the official data and the central bank had gone to the extent of terming it “analytically bewildering”...................

Read...........

कहां जा रहे हैं सिक्के, सरकार पता लगाएगी

.......बाजार से गायब हो रहे सिक्के रिजर्व बैंक के लिए भी परेशानी का कारण बन चुके हैं। इस समस्या से आम आदमी भी वाकिफ है। हालत यह है कि फुटकर दुकान से सामान लेने के बाद उसे शेष पैसे की जगह अब टॉफी, अन्य कोई चीज या कागज पर लिखी पर्ची ही मिलती है जो उस दुकान के सिवा कहीं और फूटी कौड़ी की भी कीमत नहीं रखती। लाख कोशिशों के बावजूद सरकार यह पता नहीं लगा पा रही कि बाजार में सिक्कों की कमी क्यों हो गई है? मामले की तह तक जाने के लिए वित्त मंत्रालय और रिजर्व बैंक ने मिलकर आरबीआई के डिप्टी गर्वनर केसी चक्रबर्ती की अध्यक्षता में एक समिति गठित की है। यह समिति अगले माह रिपोर्ट पेश कर सकती है। वित्त मंत्रालय के एक वरिष्ठ अधिकारी ने बताया कि इस मामले पर पहले भी तीन बैठक हो चुकी हैं लेकिन सिक्के गायब होने का ठोस कारण पता नहीं लगाया जा सका है। .............

Read...........

Dena Bank cricket team wins "Sir Benegal Ramarau Trophy"

Dena Bank cricket team, won the "Sir Benegal Ramarau Trophy" for Inter Bank Cricket Tournament conducted by Reserve Bank of India Sports Club, defeating the defending champions Bank of Maharashtra by 144 runs, in the final played on 20th April 2012 at Cross Maidan, Mumbai..........

Read................

Warts and all, micro finance is working

..........The other charge is that MFIs lend to the same clients beyond their ability to repay. In the past, there were no regulations on this aspect. And MFIs had a genuine difficulty in finding out the existing borrowings of a client because the client rarely revealed the true position. The RBI has now laid down a rule that only two MFIs can lend to one borrower and both together cannot provide loans beyond Rs.50,000. Thus, this prevents the possibility of over-lending...........

Read - The Hindu

RBI permits all financial institutions to participate in CDS

..... "It has now been decided to permit all India financial institutions, namely, EXIM Bank, NABARD, NHB and SIDBI to participate in the CDS market as user to hedge the underlying credit risk in corporate bonds in their portfolio," the RBI said in the notification…………

Read..............

Address compensation package, governance issues, MFIs told

The Reserve Bank of India (RBI) on Monday asked microfinance institutions (MFIs) to improve their corporate governance and rationalize compensation packages to bring a semblance of order to the crisis-ridden sector..............

Read.............

Synopsis of the Guest Lecture by Sh.Anand Sinha, Deputy Governor, RBI

....... A guest lecture by Sh. Anand Sinha, the Deputy Governor of the Reserve Bank of India (RBI) was organized by the ECONOMICS CLUB, IIT Delhi on 20th April,2012.It was indeed an enlightening experience to hear the Deputy Governor speak. The event started with a very comrehensive presentation by Sh Sinha explaining the role of Central Banks around the world,the role of RBI in India and a brief outline of India's macro-economic situation with respect to the rest of the world.This was followed up with a brief Q&A session during which Sh.Sinha answered various questions from the audience…….

Read..........

Banks' earning to come under pressure due to Basel-III: Anand Sinha

Earnings of banks are likely to come under pressure due to the higher capital requirements for the  implementation of Basel-III norms, Reserve Bank of India Deputy Governor Anand Sinha said in Mumbai. "There is going to be pressure on banks' earnings, not only in India but across the world. That's why, Basel-III implementation has been made longer, so that there will be least disruption. However, if you have to do the same activity with significantly higher capital, there will be pressure on return on equity (RoE)," Sinha told reporters on the sidelines of a workshop on `Strengthening Microfinance Institutions' (MFIs)..........

Read.............

RBI not in favour of allowing MFIs to take deposits: Sinha

RBI Deputy Governor Anand Sinha today indicated the central bank was not in favour of allowing micro-finance institutions (MFIs) to take deposits from public. "After all, whatever legislation passes, we have to work with that. But, RBI's position has been that deposit-taking should be limited to banks," he told reporters in reply to a question on whether MFIs should be allowed to take small deposits...........
.................
Read............

FII holding in BoB falls below threshold limit: RBI

The Reserve Bank of India (RBI) today said aggregate shareholding of foreign institutional investors (FIIs), NRIs and persons of Indian origins (PIOs) under the portfolio investment scheme in Bank of Baroda (BoB) have gone below the prescribed threshold limit. "The aggregate share holdings in BoB by FIIs or NRIs or persons of Indian origins [PIOs] under the portfolio investment scheme [PIS] have gone below the prescribed threshold limit stipulated under the extant foreign direct investment policy," the RBI said in a notification.……………..

Read..............

Bilateral meetings with U.S., other nations fruitful: Pranab

…..Mr. Mukherjee was also accompanied by Chief Economic Advisor Kaushik Basu, Economic Affairs Secretary R Gopalan and RBI Governor D Subbarao…….

Read.........

And now, de-globalisation?

.........It is quite clear that RBI’s cut was with clenched teeth and came with a warning that further instalments will not be easily forthcoming. Of course, D Subbarao had made it clear as early as last February that he wanted to see some discipline in the budget. Alas, the budget itself was pretty much given up to electoral considerations. Off-budget noises promised action on the diesel front—Raghuram Rajan was urging the Prime Minister the other day to grasp the diesel nettle............

Read...............

A Fiscally Tough year ahead

………RBI Governor, Subbarao, on the other hand also has a difficult task on hand – managing liquidity, decline of the rupee and juggling interest rates. And all this is not going to be easy. All in all, its going to be a tough year ahead for the people of the country, the Government as well as the RBI.

Read..........

RBI's rate cuts not to impact lending rates much yet

The more things change, the more they remain the same. This adage seems to explain the state of India's banking sector. The Reserve Bank of India’s (RBI) aggressive cut in repo rate is unlikely to impact the fortunes of the sector. Over the last few quarters, Indian banks have seen growth coming off and bad loans rising, due to high rates and policy issues. The market has been building in hopes of a rate cut since last year, as it would trigger growth and ease asset quality issues…………….

Read........... 

RBI rate cut — too little, too late?

……The surprise was that the RBI cut the rate by 50 bps in one go. What the market expected was 25 bps because that is the speed at which the RBI has been moving since March 2010, except on one occasion when the rate was raised by 50 bps. Will the drop in repo from 8.5 to 8 percent make all the difference?.................

Read...........

'Rate cut breather for asset quality of banks'

The repo rate cut has signalled a change in the rate cycle and the effect of the Reserve Bank of India’s action will ease pressure on the asset quality of banks, especially public sector ones, according to rating agency Moody’s. The extended rate tightening trend had posed risks to asset quality by pushing banks to increase lending rates. It meant moderation in demand and hit corporate borrowers’ ability to repay loans, Moody’s said. The outcome of an unfavourable economic environment and higher interest costs led to increasing non-performing loans (NPLs) and restructured loans. These asset quality pressures were particularly visible among public sector banks.…………..

Read.........