Gokarn-speak raises rate cut hopes

The prospects of monetary easing in the mid-quarter policy review on June 18 brightened on Friday. Apart from falling commodity prices and an economic slowdown (on Friday’s Brent crude price fall and yesterday’s GDP growth figures were the most immediate reasons), the market took comfort from Reserve Bank of India (RBI) Deputy Governor Subir Gokarn’s comments in Kochi on Friday. Gokarn said though the slowdown had been in line with the RBI’s expectations, slowing GDP growth and the oil price fall provided more room on rates. He also said the growth slowdown was accompanied by a fall in core inflation and reiterated the need for a rate reversal to support growth.......

Read..........

Can’t arrest rupee fall if driven by weak fundamentals: RBI

“If the rupee fall is due to fundamental weakness of the economy, or due to global factors, then the RBI cannot support it,” the RBI Deputy Governor, Dr K.C. Chakrabarty, told reporters on the sidelines of an HR summit of the state-run banks here.....................

Read........... 

RBI move triggers coin shortage

Even on a peak summer day in May, it is easy to notice long queue of people scrambling, outside the office of Reserve Bank of India in Kolkata, for one the most circulated commodity around —small denomination coins, of one two and five rupees. RBI opens up its counters every morning for exchange of high denomination notes with coins, but over the last six months the wait for the small metal pieces is just getting longer. The wait is not without reason. In fact, it is a business of sorts. Adjacent to the RBI premises sit scores of people who buy coins and sell them with huge premium. Over the last three months the price of small denomination coins in gray market has shot up by almost double. Thus, while three months ago, hundred coins of one rupee were selling at a premium of Rs 10, at present same coins cost Rs 20. Notably, it is illegal to sell coins, as they can only be exchanged. One of the key reasons for sudden demand and supply-mismatch for coins is the recent RBI decision to curtail bulk issuance of coins to traders through its offices.................

Continue reading.................

RBI asks three dist coop banks not to accept fresh deposits

The Reserve Bank today asked three district central co-operative banks not to accept fresh deposits including in its savings banks account. The three banks are Osmanabad District Central Co-operative Bank, Jalna District Central Co-operative Bank, and Dhule and Nandurbar District Central Co-operative Bank. "The directions issued to the above mentioned district central co-operative banks stipulate that they shall not accept fresh deposits including saving bank account, current accounts, fixed deposit accounts, recurring deposit accounts and/or any other deposit by whatever name called," RBI said in a notification...............

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

18 June policy: RBI is caught between rock and hard place

.....While most economists reckon there will once again be pressure on RBI to consider another round of rate cuts on 18 June — finance ministry mandarins have been talking of it often — RBI Governor Subbarao will now have to weigh the possibilities very carefully. In April, RBI already effected a deeper than expected cut in the key repo rate of 50 basis points against expectations of a token 25 bps cut. The latest growth figures, of course, also mean RBI may need to take a relook at the growth-inflation balance and examine whether, given the gyrations of the rupee and its depreciation, it can consider putting growth ahead of inflation in its list of concerns. However, economists reckon it will be increasingly tough for the central bank, particularly with the latest PMI number.........

Read.......

Don't hold your breath on an RBI rate cut: Mark Konyn

................In some respects, I think the policy options still remain rather narrow for the RBI. The slowdown that we are seeing is a reversal of that period of excessive growth that generated the overheating in the economy and the subsequent inflation. I certainly wouldn’t be holding my breath waiting for a rate change. I would certainly be looking for more constructive policies coming out of the government......................

Read.........

RBI worsens the UPA blow

If UPA’s populism wasn’t bad enough,

RBI’s misguided interest rate policy

finished off what growth was left

You raise rates galore, and what do you get;

The economy weaker, and deeper in debt;

I am the RBI, and I will do more;

Because I owe my soul to the monetarist store

(With apologies to Tennessee Ernie Ford, “Sixteen Tons”)

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

RBI's 28th round of inflation study begins

..............RBI in a statement said it has engaged agency Beaumont Consultancy Services to conduct this round of the survey. "Inflation expectations are subjective assessment of around 4,000 households across 12 cities proposed to be covered in the survey round and are based on households' individual consumption baskets," it said........................

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

RBI Panel Eyes Easing Bond Ownership for Foreigners

A committee set up by the Reserve Bank of India has suggested that India should make it easier for foreign investors to own Indian government bonds. In a draft report released late Thursday, the committee noted that just a few investors hold most Indian government bonds, and many of the bonds are rarely traded in the secondary market. Making it easier for foreigners to own them could improve liquidity...........

Read.........

Young jobseekers prefer PSUs, domestic companies

..........While the Reserve Bank of India (RBI) and State Bank of India (SBI) emerged as the most preferred employer for under-graduate business students in the country, engineering and MBA students chose technology giant—Google as their ideal employer in a survey conducted among 8,356 students across Indian colleges by Universum, a global consulting firm that helps companies improve their attractiveness to prospective jobseekers.................

Read.........

Government had no outstanding loans from RBI as on May 25

 Government had no outstanding loans from RBI as on May 25, the Reserve Bank of India said in its weekly statistical supplement on Friday........

Read.........

Are PSU banks trustworthy?

few weeks back, Bloomberg UTV revealed that the country's public sector banks have reported frauds amounting to nearly Rs 9,000 crore to the Reserve Bank of India. But that's not all! PSUs have also informed the RBI that out of this, nearly Rs 600 crore was siphoned off in home loan segment alone and this only in the last three years. So is public money safe in PSUs?..........

Read.......... 

Banks haunted by worries about recast debt

.....“If a borrower firm faces some stress or difficulty, banks have two options. One is to let the company suffer and initiate recovery measures or to assist the company to regain health and get back to business normalcy,” said K.R. Kamath, chairman and managing director of Punjab National Bank. “Banks generally prefer to do the latter based on the outcome of the viability study conducted. One can’t rule out some of such loans turning bad.” Banks began restructuring loans on a broad scale in the aftermath of the 2008 global financial crisis. They recast about 5% of their loans following a directive of the Reserve Bank of India. At least 10-15% of such loans have turned bad for most banks...........

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

India Inc: Depoliticise economic decisions

........Harsh Mariwala, chairman and managing director (CMD), Marico Industries. Now, the to-do list is long and exhaustive, as there has been complete inaction by the government. So, the attention shifts to the Reserve Bank of India (RBI). “Tackling inflation using monetary policy tools is a short-term approach. Supply-side bottlenecks have to be tackled. There has to be a strategy in place on how to deal with supply-side constraints. Increasing rates and curtailing the investment appetite are a piecemeal approach. It only hinders growth,” Mariwala adds........................

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

Bank deficit eases as RBI avoids exchange market

.....On reporting Fridays banks prefer to show less liabilities. This is done to keep their cash reserve ratio (CRR) costs down. CRR is a mandated zero interest balance that banks have to maintain with RBI. High liabilities mean that banks would have to maintain more balances with RBI.........

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

The BRIC Currency Swap Proposal Is A Global Game Changer

......With the credit rating agencies such as S&P downgrading India, small- and mid-cap companies are struggling to get dollar loans at reasonable interest rates. Drawing on a swap line from China, the Reserve Bank of India (RBI) can offer attractive loans to businesses through the Export-Import Bank in renminbi to finance Chinese deals without having to worry about inadequate dollar supply. There is geopolitical risk in this, however................... 

 Read........

BEML, RBI score as action resumes

Narrow win for RBI
When the league restarted on Friday, Reserve Bank of India (RBI) edged out Electronics and Radar Development Establishment (LRDE) 4-3 in the ‘A’ Division before Bharat Earth Movers Limited (BEML) eased past Controllerate of Inspection Electronics (CIL) 2-0 in the Super Division encounter......

Read........ 

State Bank India launches drive to reach farmers at their doorstep

......farmers from small villages are still deprived of the bank schemes and facilities. Considering this fact, we are planning to launch an Ultra Banking Scheme (UBS) in small villages where the banks have still not reached and their population is less than 2,000. Initially, we have identified 48 villages in the district for the launch of the UBS and the Reserve Bank of India (RBI) has also given its approval in this connection.....................

Read.........