History of economic crisis and reforms: Deja Vu?

..........The fourth volume of RBI’s history (1981-1997), the outcome of three years’ work by current and former officials of RBI, and guided by an independent advisory committee under the chairmanship of former RBI governor Bimal Jalan, is much more than the story of central banking—it’s the economic history of India during that period....................

Read - Mint

Good governance, policies will aid recovery - DR. N. A. MUJUMDAR

......Thus, the slowdown was exacerbated by structural bottlenecks and governance issues. Recovery is possible given good governance, removal of supply constraints and abandonment of misconceived policies. Growth is forecast at 5.5 per cent in 2012- 13. With the right policies, revival of growth is possible. For instance, the RBI’s decision to lend dollars to oil firms came as a breather both for the rupee, and the stock markets. The rupee, on August 10, rose to 66.51 per dollar and the Sensex rose by 405 points. This cannot be a false alarm. In fact, the measures taken are not adequate.............

Read - FPJ

Raghuram’s handsomeness averts India’s crisis

.....Middle-class parents wanted a son like him, their daughters wanted husbands/ boyfriends like him, and their sons wanted to be like him. This influential section of society soon took to organising societies, Facebook groups and concerted campaigns to do all they can to help this man, this Dark Knight that India needs. ‘His face shall not get wrinkled, his hair shall not get greyed. Not on our watch,’ being their motto. Every pronouncement of his was seized and acted upon with messianic zeal.............

Read - TOI

Obituary

I regret to advise you of the sad demise of Shri.K.N.Kalyanakrishnan in Mumbai on September  13, 2013. He was 91 years old. He had served in  RBI for over three decades and worked in Madras and Bombay and retired as Joint Controller, Exchange Control Department. 
Shri.Kalyanakrishnan was a highly respected Officer and an authority on ECD matters. May his soul rest in peace. 

- P.P.Ramachandran

Shri K.N Kalyanakrishnan was in-charge of DAD New Delhi in early 70s. Although he was novice for DAD, yet due to his superb understanding & handling of human relations ; he was a great success in NEW Delhi. My respect & admiration for his understanding & involvement with RBI continues. My Prayer to GOD. 
- Ranjit Kumar Rehan

Complaints against banks on the rise

.....Patrick Barla, OBO General Manager of RBI Patna, said as against 2,718 complaints received during July 2011-June 2012, as many as 2,785 complaints were received during the period 2012-13 of which 1946 complaints were received from Bihar, 613 from Jharkhand..........

Read - TOI

Money garlands, it’s a ‘crime’

............ A social activist from Kottayam had sent a complaint to the RBI regarding the use of such garlands at the yatra. “I had sent a complaint to the RBI with photographic evidence of Mr. Chennithala wearing the garland. This was not meant to be a personal attack against him. It was to send a message to all leaders. Note garlands are still used by most parties, even though there is an impression that the practice has waned of late,”.......

Read - The Hindu

For the falling rupee

.............The children at Atharva Bal Mandal surprise you with their maturity and understanding of current affairs. They are well-aware of the happenings in the world and are trying to come up with possible solutions. The recent topic that is bothering them is the weakening rupee. Fourteen-year-old Akash Kharade shared how they picked India’s current economy as their topic this Ganeshotsav............

Read - DNA

Ra Ra One !

.......But Ra Ra is a hero, remember? And just a week after he took over as Governor, the man’s magic seemed to be working wonders — the sensex posted the sharpest rise in four years — the rupee is not behaving like a runaway horse and industry is promising to hire more and is looking forward to a better net quarter. None of this surprises a lot of people who know him. But for those who don’t know about him, here are some interesting facts...............

Read - Khaleej Times

Of RBI governors and spinners

...In the 1970s, it was the justly famous spin quartet—Bishen Singh Bedi, E.A.S. Prasanna, B.S. Chandrasekhar and S. Venkataraghavan—who took Indian cricket to new heights and brought it international recognition. Two decades later, from the start of nineties up until now, it has been the governor quartet—C. Rangarajan, Bimal Jalan, Y.V. Reddy and D. Subbarao—who have changed the face of monetary policy in India. While they succeeded each other as governor, they have also been working together in different capacities all these years............

Read - Mint

FROM PROFESSOR TO SAVIOR

And you thought your first week of work was tough. Imagine taking the helm of the central bank of the world’s second-most-populous country and its 10th-largest economy at a time fraught with economic peril. Or perhaps more vividly: imagine helming a huge, leaky ship as it sputters toward a maelstrom. That’s precisely the burden Raghuram Rajan, a 50-year-old University of Chicago professor, bears. On Sept. 5, he assumed the position of governor of the Reserve Bank of India for a three-year term.........

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

An economist-manager at the helm of RBI

A large number of economists, political pundits, business leaders and journalists are pre-occupied with unravelling the mind of the new Governor of Reserve Bank of India Raghuram Rajan. He is different from all the previous Governors, who have either been economists or bureaucrats. Here you have a person who has not only global experience but also a “systems” perspective. You need to read his extremely readable two books to note that he brings in a historical, management and economic grounding to his job............

Read - The Hindu

Poster Boy Rajan’s Report to be Lynchpin of Financial Reforms

..........The plan to kick off the process, stalled for many years, was discussed in the run-up to the appointment of Raghuram Rajan as Reserve Bank of India governor and has the highest political sanction. The reforms blueprint will lean heavily on the two high-profile reports already available with the government, one of them authored by Rajan himself. “We will have a framework ready soon and will take it to the Financial Stability and Development Council (FSDC) for deliberation before the measures are rolled out,” a senior finance ministry official told...........

Read - ET

Rajan's policy will not have false optimism or pessimism

I think Raghuram Rajan had alluded to the impending September 20 monetary policy meet. The RBI’s number one priority could be to just dispel some of the excessive doom and gloom which prevail. He mentioned it, the Finance Minister also mentioned it in Parliament. Very clearly, the financial markets have got to the man on the street, the business man, the consumer, the investor, the saver and everywhere. So, what we might get at the policy date is a communication of the Indian economy going through a difficult time and there can’t be any false optimism. However, we certainly should not have false pessimism either. That will be the overall construct in which the policy will be made..........

Read..........

RBI should train guns on inflation

............How best can monetary policy be conducted in this scenario? This is probably the most important and difficult challenge confronting the new RBI Governor; more so as he has articulated that the RBI has to go back to the basics — its core job being to ensure that the rupee’s purchasing power is preserved internally. That focus on a core “monetary stability and internal purchasing power preservation” objective is laudable, as monetary instability is arguably the root cause of so many other imbalances — for instance, in our external accounts and banking system. Budget deficits per se are not evil at all; more so in the developing and poor economies where governments have to take up large social commitments...........

Read - HBL

Not at this rate

....Even with a high weight on inflation and a lower weight on employment, a Taylor rule says that current levels of interest rates are too high. The RBI needs to note that while it must target the consumer price index, it will find it hard to do so until it solves the question of whether monetary policy affects food prices, or whether inflation targeting involves a policy of manufacturing price deflation..........

Read - IE

Reforms: clear the clutter

.... A refreshing contrast comes from the new banking reforms of Raghuram Rajan, the new RBI Governor. He has decreed that any bank can now open a new branch without RBI clearance. Earlier, the RBI viewed every new bank branch as a special dispensation, to be approved only after long scrutiny. Indeed, the RBI once wanted to approve even individual ATMs, viewing these as bank branches of a sort! Rajan has jettisoned the approach of everything being forbidden till approved. By freeing banks to expand as required, subject only to the usual rules, he has produced clean, uncluttered liberalisation.........

Read - TOI

The situation is grave but hardly hopeless

Listening to Reserve Bank of India (RBI) Governor Raghuram Rajan's refreshing speech, I was reminded of a 1970s French satire about the Chinese invasion of Paris in which a sombre protagonist declares reassuringly to panicked colleagues: "la situation est grave, mais pas desesperee!" Indeed our situation today is serious. But it is, as the governor implied, hardly hopeless. In fact, as I argue below the situation is quite salvageable but will require determined action...............

Read | Business Standard

Keep up with the 'out of box' thinking: Shubhada Rao

.....Fortunately, policy focus has now shifted towards attracting capital flows, through a mix of conventional and unconventional measures. However, we need more out of box solutions to enable RBI to reverse its recent tightening measures without compromising rupee stability. In this context, the option of a partial switch in the composition of government borrowing from long-dated securities to bills can be explored. This will have the dual benefit of lowering long-term yields, while enhancing the attractiveness of T-Bill rates for foreign portfolio investors. It is, however, critical for RBI to continue with strategic intervention in the forward market, to ensure hedging costs do not dilute this yield premium..........

Read | Business Standard

Edgy inflation, cautious Fed chief may tie Rajan’s hands in vital week

Read - HT

Contradictory actions

.........The government and RBI have to control inflation. Analysts think it unlikely to moderate very much despite the good monsoon, because of rising energy prices. In recent months, the RBI has put pressure on liquidity, and maintained high interest rates. The RBI might now, and frequently, increase and reduce liquidity while holding on to interest rates...........

Read - The Telegraph

Devaswom rejects RBI request to furnish gold stock

........“The RBI had requested the GDMC to provide details of the gold stock in its possession as part of collecting gold assets of places of religious worship in the country,” Devaswom administrator K.Muraleedharan said. The Devaswom has already communicated to the RBI its inability to provide the details as it was impractical to assess the gold stock correctly, he said on Sunday. A decision in this regard was taken at the GDMC meeting here yesterday, he said..................

Read - The Hindu

Finmin to RBI: Stop Banks from Bidding for PSU Bulk Deposits

.......“Banks are forced to offer a higher rate because of the bidding process, often done informally,” a finance ministry official said confirming that the issue has been raised with the RBI. The central bank is aware of the problem and had said even in its 2012-13 monetary policy statement that there was a wide variation in banks’ retail and bulk deposits, which is unfair to retail depositors...............

Read - ET

Mandya district may soon get State’s first all-woman bank

.................The actor-turned MP was in Mandya on Wednesday to lay the foundation stone for a commercial complex on RAPCMS grounds, off Bangalore-Mysore Highway, here. After the programme, Ms. Ramya said she had requested Minister of State for Finance Namo Narain Meena to set up the bank branch in Mandya. She had got a positive response from the Union Minister. The district was likely get the bank by November. Its location, however, was yet to be identified, she said..................

Read - The Hindu

Banks scurry to expand presence in non-urban areas

........Of this, a large number are in metro and urban areas. Though the rule that banks set up at least 25 per cent of the total branches in rural areas has existed for decades, not many banks have followed this diktat. This has lead to an uneven spread of banks. “Notwithstanding the development of various types of banks, the Indian banking sector is yet to meet the desired banking penetration and inclusion as witnessed in most advanced and some of the emerging economies,” the RBI said in a report recently............

Read | Business Line

Country bank

.......... If the villager has any money, he can open a savings account and create a variable recurring deposit, or ask the teller to make an electronic bank transfer to his girl friend; otherwise he can use the same account to take an overdraft. The Indian villager is a lucky man — at least in the view of the RBI.

Read - The Telegraph

Bank Licence Hopefuls Scramble for Clearances

Banking aspirants, including Shriram Capital and Religare Enterprises, are running from pillar to post to get clearances from a plethora of bodies such as the Central Bureau of Investigation, the income-tax department, as the Reserve Bank of India accelerates processes to grant new licences by January. The central bank, which is in a hurry after Raghuram Rajan took charge, has sought details of the ultimate beneficiary shareholders in some of the group companies and more details about finance beyond what appears in annual reports.........

 Read - ET

RBI must come clean on why it took so long to acknowledge its mistake

......‘Inadvertently’? It’s been more than two months since the Bank released the list of 26 applicants! So why did it take it so long to realise it had made a ‘mistake’?............

Read - ET

Maharashtra’s Rs 545 crore is locked in land leases

.........The leased lands, located at prime spots, house offices of corporate companies such as Reliance Industries, Jet Airways, public institutions Indian Oil Corporation, Reserve Bank of India as well as elite recreation clubs like Hindu Gymkhana, Islam Gymkhana, Bombay Gymkhana, Wodhouse Gymkhana and Willington Sports Club. The Maharashtra Opposition has alleged that the government did not renew the land leases to give an undue benefit to those who possess the lands...............

Read - Sunday Guardian

Banks must explore new-generation technologies: CII-KPMG report

In view of the prevailing scenario, the financial services industry must explore the potential of some new-generation technologies such as social media, mobile, analytics and cloud (SMAC), according to a CII-KPMG report that was unveiled during the Banking Conclave 2013 in Kolkata. With the Indian banking sector at an inflexion point, the CII-KPMG report notes that the sector must live up to the challenges, particularly in view of the government's ambitious financial inclusion plans and its decision to spend substantially on infrastructure building..........

Read - IE

Will Chidambaram yield to raise the tax exemption limit

The Prime Minister’s Economic Advisory Council wants the government to raise the tax free savings limit for individuals to Rs 5 lakh from Rs 1 lakh. It’s a good idea as this could encourage people to buy more houses, mutual funds, insurance or pension policies and improve the country’s financial savings. The salaried middle class would be happy because for most people PF contributions alone account for a good chunk of the tax exempt of Rs 1 lakh. This leaves them with barely any incentive to invest in other savings schemes............

Read - ET

How the money flows from banks

..........According to available statistics, during the current year 2012-13 up to July end, home loans of banks grew by 18.4 per cent. Loans for commercial real estate during the same period grew by 15.61 per cent. It is reported that the bulk of the growth is in Mumbai and Northern Capital Region. The new guidelines are meant to stop the banks from up-front disbursal of sanctioned individual loans to builders, in order to avoid risk to both banks and the borrowers..........

Read - The Hindu

Regulators get tech-savvy

......Various regulators, including the Ministry of Corporate Affairs, Central Board of Direct Taxes, Securities and Exchange Board of India and Reserve Bank of India have started using the Information Technology Act, 2000 to enhance corporate governance...............

Read - HBL

There’s someone ‘smarter’ than your smartphone

............“Nowadays people use handsets with Anroid version and download apps from Google’s Playstore. While downloading, there are chances that a malware named Perkele -- which means Devil in Finnish -- may enter the user’s system, through which attacker gathers information of the user’s mobile data,” Rohit Shrivastava, founder of Club Hack, says. So each time a bank sends an SMS or a one time password (OTP) to the user, the same SMS goes to the attacker. This malware, which has entered through the download, helps the attacker block the SMS alert to the user, so the user is not able to see it, .............

Red - DNA

IIM-A faculty suggests way out of macroeconomic mess

AHMEDABAD: There is possibly a way out of the current economic mess if credit can be expanded to close the differential between the low end government bond yields and the repo, says a working paper by faculty of the Indian Institute of Management, Ahmedabad..............

Read - TOI

Risk-free returns aren't enough

........The Reserve Bank of India's latest annual report shows investors put Rs 647 billion last year in new commercial bank FDs. Bank deposits comprise 56 per cent of a household's investments. Says Vishal Kapoor, head of wealth management, Standard Chartered,"The bank fixed deposit has been a traditional investment across emerging markets and for most investors, as there's a safety and comfort attached to these products."..........

Read | Business Standard

What a swap is all about

........Two parties agreeing to exchange their cash flows in such a way that both are benefited, is what a typical swap entails, in the financial sense. Companies, financial institutions and even countries enter into such exchanges. The commonly used swaps are interest rate and currency swaps. Swaps were in news recently because the Reserve Bank of India introduced a swap window to attract FCNR (B) dollar funds to rescue the beleaguered rupee. The RBI has allowed banks accepting deposits for three years and over, under FCNR (B), to swap the dollars with it for rupees.................

Read - HBL

Cash or credit?

......The beauty of credit cards is that the downside is subtly hidden while the benefits are plugged for all they are worth. Then there is the status thing; silver cards gave way to gold, which gave way to platinum, and now, there are black cards and even palladium and titanium. Dubai’s First Royale Mastercard is made from real gold and has a diamond set in the card. All the big players—Amex, Mastercard, Citibank and Visa, as well as leading banks, have VIP cards for their richest clients, which come with special services. All this is a long way from the origins of credit cards, in America, during the 1920s. It started with...........

Read - FE

Merger has strengthened bank’s financial position: chairman

Chairman of Pragathi Krishna Gramin Bank M.B.Bhat has said the merger of Pragathi Gramin Bank and Krishna Gramin Bank had strengthened the bank’s financial position and would enable the bank to provide better service to its customers. Addressing a press conference here on Saturday, Mr. Bhat said that the merger process had been completed and the staff and officers of both the banks were happy.........

Read - The Hindu

Syndicate Bank plans to outsource ATM management

............Initially, the bank intends to go for outsourcing ATM Management Services at 194 off-site ATMs. This might be extended to all the new off-site ATMs opened subsequently. Also, the bank proposes to go for partial outsourcing of management of on-site ATMs, it said in a bid document. The bank has been strengthening the ATM delivery channel by adding more ATMs from time to time. It plans to add 1,300 ATMs during this year..........

Read | Business Standard

Schemes for minorities being cornered by non-Muslims: Report

........The Reserve Bank of India's efforts to extend banking and credit facilities to Muslims, a major fallout of the Sachar Committee report which said Muslims were out of the banking system, has also ended up benefiting non-Muslim minorities whose socio-economic status is comparable to upper caste Hindus, the report said. "Diffidence at the policy level to clearly focus on Muslim deprivation translates into active reluctance by the implementing agencies on the ground to target the Muslims even in districts with high Muslim concentration," the report said........

Read - TOI

Top IRDA official charged with sending ‘spurious mails’

.........S. K. Jain, who is also the Vice-President of the IRDA Officers and Staff Association, was charged with using fake IDs to send e-mails to senior officials, including those in the Ministry of Finance, about corruption and malpractice in the regulatory body. The remand report of the police dated August 23, 2013, notes that Jain had “noticed some irregularities in promotions, absorbing of ineligible employees and corruption, upon which they have tried to convey them to senior officers but they have showed deaf ear… As such, he had decided to send mails to private persons…’’............

Read | Business Line