ATM robbers from Mohali

THIRUVANTHAPURAM: The recent series of ATM robberies in Kollam and Thiruvananthapuram districts caught even the Reserve Bank of India (RBI) off guard as robbers capitalised on a very weak computing system deployed by banks in their ATMs. ......

Read - TOI

RBI notifies government’s decision on FDI

The Reserve Bank of India (RBI) on Friday notified the government’s decision to allow FDI in multi-brand retail, civil aviation, broadcasting and power exchanges.........

Read - Mint

Gold loans won’t lose their shine despite RBI imposing strict lending rules

......After the Reserve Bank's new rule, NBFCs changed the way gold is valued to include making charges and also tax. This is how it used to work: if the gold content in a piece of jewellery is valued at Rs 100, a loan of Rs 70 was typically possible. Now, to the Rs 100 are added making charges (say, about Rs 10) and the VAT (12%). So, the loan is given on the replacement cost of the jewellery — Rs 123 (Rs 100 + Rs 10 + Rs 13). And 60% of Rs 123 is greater than 70% of Rs 100; so the new norm doesn't look bad......

Read - ET

Fraud-hit emu farming industry flies North

......“Either RBI (Reserve Bank of India) or Sebi (Securities and Exchange Board of India) should be responsible for this. Often they take the cover that it was never brought to their notice. It is all over the newspapers. What more notice do you want?” said R Balakrishnan, a former financial services professional and an independent adviser based in Chennai.......

Read - BS

Peerless Group gets RBI nod to enter consumer loan business

KOLKATA: The Peerless Group has received a new lease of life as the Reserve Bank of India has allowed the group to foray into consumer loan business.  Peerless General Finance and Investment Company (PGFI), once a household name for poor depositors in the eastern and the southern markets, ran into a difficult phase with declining earnings after being forced to phase out its deposit-taking business.......

Read - ET

Can you really Bank on them?

......To a Right to Information (RTI) query, RBI has confirmed that 36 banks operating in Kerala have reported banking frauds of over Rs 260 crore......

Read - TOI

Loan-some blues

......Should existing customers switch loans now? While the rate cuts sound attractive, do the maths to figure out how exactly a 0.25 percentage point cut affects your loan. Remember, banks have not reduced base lending rates; they have simply selectively cut rates on some loans.......

Read - The Hindu

RBI voices concerns on separation of DMO from Central Bank

The Reserve Bank of India (RBI) has once again voiced concerns on separation of Debt Management Office (DMO) from Central Bank. “Separation of debt management from Central Bank needs to be revisited in the wake of global financial crises,” said H R Khan, Deputy Governor, RBI at a conference in Doha recently.......

Read - BS

RBI vs RBI

......In any case, RBI Deputy Governor KC Chakrabarty has been chiding banks because they’re not lowering loan rates and holding them responsible for ineffective monetary transmission. Well, this time around, banks are being compelled to cut rates to drum up business, even though RBI hasn’t touched the policy rate. Unless loan growth picks up dramatically in the remaining months of the year, banks should not be short of liquidity and so loan rates could trend down. The big challenge for banks, however, remains deposits, which are growing slowly because of which banks may not be able to cut rates beyond a point. The irony, of course, is that while RBI is against rate cuts in the face of stubborn inflation, its CRR cut is what made the rate cuts possible.

Read - FE Editorial

FM to RBI: more bank licences, please

......A senior RBI official told HT that framing the guidelines is taking more time than expected due to the extensive nature of the suggestions received by the central bank. “We need to study every minute details before finalising the guidelines,” the official said.

Read - Hindustan Times

Finally, Govt bites reforms bullet - S S Tarapore

......The RBI’s Mid-Quarter Review on September 17, 2012, correctly emphasises that in the recent period, growth risks have increased while inflation risks remain. The reduction of the cash reserve ratio (CRR) from 4.75 per cent to 4.50 per cent, releasing Rs 17,000 crore, appears to be in the nature of support to the government’s recent measures, rather than responding to any need for increased liquidity......

Read........

Need to initiate policies that enhance domestic capacities: Subir Gokarn, Deputy Governor, RBI

NEW DELHI: RBI Deputy Governor Subir Gokarn said that India needs to initiate policies that enhance domestic capacities in order to offset the world pressure. He was speaking at a session on Macro-economic Issues and Challenges to India's growth, organised by the PHD Chamber of Commerce and Industry in New Delhi.......

Read - ET

Champagne and vada pao - again?

......Thus, the threat of 55 to the dollar (or worse) remains in place, so short dollar exposures should be prudent, particularly as premiums have started to ease a bit. A little hesitantly, I would forecast a range of 52.50 to 55 for the rest of this year. In any event, the RBI should be looking at loosening some of the constraints it put on the market to contain volatility. Not only would the increased volatility drive more companies to hedge on both sides of the book, but more deregulation would also be of a piece with the new Reforms 2.0 agenda.......

Read - BS

Selection of CMDs and EDs in Public Sectors Banks Are Nothing More Than Farce

......As I was searching for something on banking, I came across a write up of 2005 in Rediff under the heading "Farce of Bank CMD Selection" (the original articles appears to have been published in Business Standard).   As I read the article, I felt that nothing has changed in last 7 years.  ......

Read........

RBI to issue Rs 100 banknotes with inset letter 'G' soon

......"The Reserve Bank of India will shortly issue Rs 100 denomination banknotes with inset letter 'G', in both the numbering panels, in the Mahatma Gandhi Series-2005 , bearing the signature of D Subbarao, governor, RBI, and the year of printing 2012 printed on the reverse of the banknote," RBI said in a notification today.......

Read - Hindustan Times

RBI to issue gold sovereign bonds to strengthen rupe

The Reserve Bank of India is planning to set up a panel to suggest a roadmap to tap into India’s gold holdings reports CNBC-TV18‘s  Siddharth Zarabi......

Read.....

Reserve Bank of India : DRG Study: Pricing of Paddy: A Case Study of Andhra Pradesh

The Reserve Bank released today the DRG Study on " Pricing of Paddy: A Case Study of Andhra Pradesh" authored by Dr. Ramana Murthy and Smt. Rekha Misra. From this DRG Study Series No. 38 onwards, Reserve Bank will be only web hosting the DRG Studies and no printed version will be made available......

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Govt asks banks to promote e-payments, cut cheque transactions

......he Finance Ministry has also asked public sector banks (PSBs) to ensure that all payments and disbursements by the banks, except sundry payments, are made only electronically. "Banks must devise suitable monitoring parameters to judge the effectiveness of the e-payment drive," sources said, adding that the Executive Director dealing with the matter should be assigned the responsibility of supervising e-payment drive in the respective banks.......

Read.......

Attn! Numerical sequences as ATM pin?

If your ATM pin code is your birth date, a year in the 1900s, or an obvious numerical sequence, the chances of thieves cracking your password are way higher, according to a new study.......

Read - Express India

Bank interest rates to fall 50 bps: BofA

......BofA-ML expects the RBI to cut the CRR by a further 0.50 percent in its third quarter policy review on October 30, the note said, adding, the central bank may also infuse an additional liquidity of Rs 1,00,000 crore by March through open market operations (OMOs)......

Read - Express India

Bank deposits outpace credit growth

Deposit accretion in banks continues to outpace loan disbursements this financial year. The trend prompted lending rate and deposit rate cuts by several banks in the period. As the Reserve Bank of India (RBI) data released on Thursday, bank deposits grew Rs 91,853 crore between June 29 and September 7, 2012. Outstanding credit fell by Rs 11,153 crore in the same period. In the first five months of the current financial year, deposits were up by Rs 2 lakh crore, while credit was up Rs 44, 904 crore.......

Read - BS

Hold on to the savings

...... A large number of banks sell gold. While banks have always lent against gold, a few non-banking finance companies, many from Kerala, have cashed in on the demand and exponentially increased their lending. The RBI, concerned with such rapid growth, has clamped down in a few cases. The other big macroeconomic worry arises from the fact that very large gold imports widen the trade imbalance and the current account deficit.......

Read - The Hindu

Banks caught in a cleft

......As if these hurdles don’t make the lives of bankers difficult enough, there is also the regulatory overhang of higher capital needs. As per estimates released by Reserve Bank of India, banks would need about Rs 5 lakh crore to meet new Basel-III-capital norms......

Read - BS

UIDAI Rolls Out API For e-KYC Verification

......As part of the e-KYC process, the resident can authorize UIDAI (through Aadhaar authentication) to provide their basic demographic data for PoI and PoA along with their photograph (digitally signed) to service providers. For the same, UIDAI has released e-KYC API......

Read......

India’s Power List: SBI Head Tops It

Pratip Chaudhuri, the chairman of the State Bank of India, topped the list of Indian executives making headlines over the past month, according to data on regional and global media mentions compiled by Dow Jones Insight......

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State Bank of India ordered to pay Rs 24K with interest

......A redressal forum today directed State Bank of India at Hoshiarpur to pay Rs 24,056 as compensation to one of its account holders along with interest for negligence to prevent unauthorised transactions through his ATM card......

Read.....

Tata Capital to bring insurance, AMC firms under its fold

......Since the banking regulator does not allow any financial services entity held by NOHC to engage in activities that can be undertaken by the bank, Tata Capital Housing Finance will be merged with the non-banking company. RBI’s draft norms suggest that the promoters of banks should bring down their shareholding below 40% within two years of the banks being operational. The banks will also have to be listed within this period.......

Read - Mint

High fiscal deficit led to harsh steps: C Rangarajan, Chairman, PM's Economic Advisory Council

......C Rangarajan, a former Governor of the Reserve Bank of India and now the head of the PM's Economic Advisory Council, also warned that India's fiscal and current account deficits were high and the country risks international censure in the form of downgrades by ratings agencies if no action is taken to tame the deficits. "If we did not act now, there would be a much bigger problem ahead of us," said Rangarajan, an economist of international repute not usually known for alarmist talk.......

Read - ET

RBI took the right step ......... thanks to its Governor

...... Thus, a cash reserve ratio (CRR) cut is the most appropriate step that the central bank could have taken for the moment.......

- T V Gopalakrishnan Mumbai

......The Reserve Bank of India (RBI) Governor should be praised for his consistent policy stance. Thanks to his resolve, he has succeeded in persuading the fiscal authority to first act and bite the bullet on fiscal discipline before expecting the regulator to announce growth-inducing measures.......

- Raman Kumar Agrawalla Bhubaneswar

Read - BS

Wrong diagnosis

......The RBI’s obsession with fighting global cost push inflation by crushing domestic demand  gets revealed for what it actually is: Ignorance of basic economics cloaked in outmoded dogma and defended with arrogant obduracy. Publicly the UPA government has joined the chorus of praise the RBI for what it did not do. But if it wishes to save the economy and its  own chances of re-election in 2014 it would do well to persuade the RBI to see the error of its ways before October 30.

Read - Deccan Herald

D Subbarao’s point

The present RBI Governor, Duvvuri Subbarao, was finance secretary when 2G spectrum was allotted to new entrants at 2001 prices in 2008. Deposing before a parliamentary panel on Tuesday, he said that any so-called loss to the exchequer was dependent on assumptions and the numbers anyway were notional. He is correct......

Read - ET

Distance crunching

The shortening space between Mint Road and North Block

Read - BS

People cautioned against fake companies, notes and SMS

SILCHAR, Sept 18: In order to make people know about the growing menace of chit funds, fake currency notes, deceitful SMS and the various facilities offered by the banks, ‘Banking awareness programme’ was organized by Reserve Bank of India, Guwahati, and  NGO Arunodaya Sangha, at Gandhi Bhawan in Silchar on Tuesday.  A host of officials of the RBI and other banks graced the occasion along with members of the NGO......

......Arpita Biswas, Deputy General Manager of RBI, who was the chief guest, said chit funds grew where the penetration of bank was less. The fake financial non banking companies were functioning without the approval of RBI. She added to say several cases of fraud had been brought to their notice. She made it clear that no non banking financial company had been given permission by RBI to raise fund or receive deposits from people.......

Read.......

Financial literacy on RBI agenda

The Reserve Bank of India’s Agartala branch is working in tandem with the Tripura school education department to prepare a syllabus to impart financial education to students. RBI Agartala branch General Manager A.K. Pandey said the syllabus was being prepared for introduction at the school level because financial transactions and issues were changing fast over the past decade, thanks to new technologies. “During the past two decades, banking services as well as financial matters have undergone major changes. That’s why an awareness programme is required to educate people, right from their student days, about these services to ensure a convenient adult life,” Pandey said, adding that the state government was extending full co-operation to RBI in all matters. Pandey and RBI’s Banking Ombudsman in the Northeast, B.B. Sangma, who were at Udaipur, the headquarters of the newly created Gomati district in Tripura, spoke about the activities of the RBI banking ombudsman......

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ZSP Shillong 29th Freshers’ Social 2012

Shillong, Sept. 15, 2012: The Zou Sangnaupang Pawlpi (Zou Students’ Assn.) Shillong Branch held its 29th Freshers’ Social Meet 2012 today at Savio Hall, Dhankheti, Shillong. Pu Phiamphu Lianzalal Zou, Asst. Manager of RBI, Shillong graced function as the cheif guest.........

Read......

RBI to organize inter school quiz on September 21

......Deputy General Manager, RBI, Anup Kumar said city schools have been invited to participate in the quiz. Students from class XI to XII would participate in the quiz. City-based educationists and administrative authorities have been invited to be a part of the quiz.

Read - TOI

CRR cut conceptually flawed

......As banking regulator apart from the monetary authority, the RBI is duty-bound to protect banks in the larger interest of the country. Though it is common to expect the government to own up to responsibility for governance, it is time the RBI lives up to its responsibility of protecting the health of banks.......

Read - HBL

Why a CRR cut?

......True, RBI’s task is difficult due to high government borrowings and inflation-induced distortions in demand-supply of capital. Government borrowings from the market to finance nearly two-thirds of its fiscal deficit are forcing RBI to constantly buy bonds. The measures taken last week do little to directly address the fiscal gap......

Read - Mint

Guj likely to have common BCA for financial inclusion

......“Every bank either appoints an outside agency or they go on their own for business correspondent programme. But for better penetration in the remote areas and achieve set targets, a common business correspondent for the entire state is being considered,”......

Read - BS

RBI for no agency business to private banks for three years

......In a letter to the Reserve Bank of India (RBI), the finance ministry has said that for the next three years no private sector bank will get the agency business of the centre and states, pegged at about Rs 20,000 crore......

Read - ET

We must encourage foreign direct investment rather than more debt

......The recent relaxations in the external commercial borrowings (ECB) guidelines announced by the Reserve Bank of India (RBI) favour soft, but potentially risky, options over harder, but more prudent, options.......

Read - ET

RBI mulling financial products to check gold imports

NEW DELHI: Concerned over rising gold imports, the Reserve Bank today said it is planning to come out with financial products on the lines of gold ETFs to give options to investors to take advantage of price movement in the precious metal. "...We can provide people with financial attraction of gold without them having physcally own it. That would in a sense reduce the pressure on imports. So ETFs are one such," RBI Deputy Governor  Subir Gokarn told reporters on the sidelines of a PHD Chamber event here.......

Read - ET

The M-Banking Leader

......After RBI removed the Rs 50,000-per-day cap on m-banking transactions, banks are trying to push this service to all corporate clients. What’s driving them? M-banking costs a tenth of what a bank spends at a branch for a similar transaction.......

Read.......

Way to Go, Guv

This refers to ‘Governor Does His Bit’ (ET, Sep 18). The RBI Governor will be praised for his persistent efforts and consistent policy stance in his recent monetary policy reviews. He hasn’t neglected the underlying growth-inflation dynamics but has been pragmatic enough to provide a complementary monetary policy action through reduction in CRR by 25 basis points. It’s time for Indian economy to have monetary and fiscal policies working in tandem so that its economic ills are ameliorated, improving the conditions for economic growth keeping the inflation at a tolerable threshold. 

- RAMAN KUMAR AGRAWALLA (ET)

RBI Governor meets Chidambaram

...... "You have to wait till October 30. I can't say on September 18, what we will do on October 30. I discussed some purely administrative issues with the Finance Minister. There was no discussion on policy".......

Read.....

RBI issues guidelines on banks' illiquid assets

......The guidelines on which comments are invited till 19th October, permit banks to follow any recognised model or method for computing the amount of valuation adjustment. RBI said that illiquid positions are generally disposed of at much lower price than the value reflected by banks in the books of accounts as per applicable accounting standards.......

Read - Moneylife

‘Liquidity should not be a constraint to economic activity’

The Reserve Bank of India does not want liquidity to be a constraint to economic activity, said Subir Gokarn, Deputy Governor, explaining the rationale for the Cash Reserve Ratio (CRR) cut announced on Monday.......

Read - HBL

Supporting policy needed to lower biz risks: Subir Gokarn

R

egulators need to maintain a balance between regulation and innovation as per local requirements, RBI Deputy Governor Subir Gokarn said today as he pitched for a supporting policy framework to lower business risks......

Read.....

India cbank says bond purchases remain option despite CRR cut

......"Open market operations have always been very tactical when situation has been tight. When we've felt that the pressure might persist, we've used OMOs and that option remains," ......

Read......

'No actual monetary loss to the govt'

......This is not the first time Subbarao has defended Chidambaram. The former finance secretary had maintained his stand on the same issue before the Public Accounts Committee. Subbarao also said he disagreed with the controversial note prepared by the finance ministry for Prime Minister Manmohan Singh, which said Chidambaram should have insisted on auctioning of 2G spectrum......

Read.......

Indian economy – imperatives for second generation reforms

Address by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the inaugural session of the State level seminar, organized by the Department of Economics of the Vivekananda Education Society’s College of Arts, Science and Commerce, Mumbai, 14 September 2012

......The regulation and supervision of the financial system in India is carried out by different regulatory authorities. The Reserve Bank regulates and supervises the major part of the financial system. In the past five decades, the Indian banking system has traversed through a difficult path endeavoring to balance several competing and conflicting demands on it from large, medium, small and tiny borrowers in both the organised and unorganised sectors. The banking system’s activities were initially tightly regulated and their freedom was restricted. It also confronted several domestic stresses and external shocks. However, the regulations have changed over time to ensure that the banking system steps out ......

Read.......

Don't sit on our changes: Chakrabarty

...... “What we call operational efficiency of the banks, that is one thing that should happen,” Chakrabarty said. On the larger economy, he said unless there were institutional reforms, policy reforms would not percolate downward. “My view is that a lot of things need to be done at the government level, state government level, at RBI level. But what has been done, its full benefit has not been taken by the people. Reform is not taking place at the individual level,”......

Read - BS

Thank the SBI chairman .......... and RBI’s caution

......The empirical evidence presented by Chaudhuri seems to have convinced not only RBI, but also top experts like C Rangarajan and Montek Singh Ahluwalia who are now unequivocally endorsing the relative superiority of a CRR cut as a policy instrument for inducing lower lending rates.......

....... To put it in a nutshell, it is a cautious policy announcement that intends to strike a fine balance between growth and inflation.

Read - BS

CRR cut contraindicated

Apropos the edit on the Reserve Bank of India’s (RBI’s) announcement of a cut in the cash reserve ratio (CRR), one wonders at the rationale, if any, for the injection of Rs 170 billion into the system that will eventually become larger owing to the workings of the money multiplier (“RBI does minimum,” September 18). The RBI review admits that liquidity conditions have remained comfortable. But it expects the situation to be tight in the context of the expected pick-up in credit growth in the so-called busy season, advance tax payments and the festival-related currency demand. But there is no evidence to support these premises if one looks at the trends in the economy relating to the underlying variables. It is a moot point whether the CRR cut will lead to a reduction in lending rates without affecting deposit rates. State Bank of India’s net interest margin (NIM) was 3.85 per cent as on March 12, 2012. The domestic and foreign NIMs were 4.17 per cent and 1.70 per cent, respectively. The bank’s Indian customers are subsidising their foreign counterparts. SBI has been at the vanguard of the demand for the reduction, nay, abolition, of the CRR! Those who argue for growth over price stability should note that inflation has affected savings, especially in financial assets. It is wiser now to borrow to finance the purchase of a house rather than try to save the amount over a period. In an inflationary situation, the borrower gains at the expense of the lender.

- A Seshan Mumbai (BS)

Banks not passing benefits of rate cut to borrowers: RBI

According to RBI Deputy Governor Chakrabarty reduction in policy rates will not serve any purpose unless banks bring down their spreads and pass on the benefits to borrowers........

Read - Moneylife

Dr Chakrabarty’s concerns are shared by most bank customers. But here bankers and policy makers will say market forces are at work. If banks can accept deposits at very low rates and lend after retaining a 3 to 5 per cent Net Interest Margin why should they work harder to improve their working in favour of their clientele?

- M G WARRIER

Role of Monetary Policy in fiscal ability a global debate

......"It is not surprising, therefore, that the RBI, which is emerging as a role model for monetary stability, has decided to wait and watch till, perhaps, the second Quarter Monetary Policy review in October, for any further cut in policy rates"......

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One-Minute Guide | Cash reserve ratio

I am part of every scheduled commercial bank’s overall cash balance. I am that portion of the banks’ net demand and time liabilities or deposits which needs to be kept in a current account maintained with the Reserve Bank of India (RBI).......

Read - Mint

RBI Monetary Policy: Calculated pause or characteristic freeze?

......Writing a foreword to a book authored by former Governor of Reserve Bank Y V Reddy, Andrew Sheng, the former Chairman of Hong Kong Securities and Futures Commission explains why Asians instinctively "freeze" when they encounter a crisis. Has RBI made a calculated pause or sensing a crisis has it frozen? 

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RBI stands pat, but may soon have to sprint

......Yet, India Inc need not turn to the wall and sob. At least, not yet. For, the RBI’s small move on Monday may just be the trailer with big action to come the next time round. Yes, the RBI may be blinded by its concern over inflation, but it cannot be deaf to the clanging alarm bells on low industrial output growth......

Read - HBL

Rate cut demand, an obsession - M.Y.Khan

The Reserve Bank’s policy announcements would go a long way in silencing the hue and cry over decreasing the repo rate and the reverse repo rate in order to make available cheap bank credit. The recent increases in interest rate have been a cause of stress for the business community. But investment is not directly impacted by interest; it is affected by profit. Therefore, the clamour for lowering rates seems overstated, and the RBI, perhaps realising that, has responded appropriately by reducing only the cash reserve ratio (CRR)......

Read - HBL

Sceptical of reforms, will RBI cut rates in October?

......“I am very confident that between now and October 30, since the government is expected to take a number of additional policy measures and also lay out the path of fiscal correction, the response of RBI on October 30 will be far more supportive of growth,......

Read........

Understanding RBI's move to slash cash reserve ratio

......Undoubtedly Governor Subbarao is not taking his eyes off the inflation rate, which is still not in  the comfort zone. In the latest monetary review, RBI has  kept the repo rate unchanged at eight per cent.......

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Subbarao says he could have done better

A simmering political cauldron, stoked by the recent decisions of the Finance Ministry to hike fuel prices and FDI limits in retail, is likely to now boil over, with RBI Governor D. Subbarao admitting to the Joint Parliamentary Committee (JPC) investigating the 2G scam that he could have performed better in his role as Finance Secretar......

Read - The Hindu

Subbarao takes the middle path

Reserve Bank of India (RBI) Governor D. Subbarao  seems to be a believer in majjhima patipada, or the middle path of Buddhist philosophy—moderation. So there was no rate cut in the mid-quarter policy of the central bank on Monday; instead there was a cut in banks’ cash reserve ratio (CRR), or the portion of deposits that commercial banks need to keep with the central bank............

Read - Mint

RBI: Cautious, careful, correct

The stage was set by the government over the weekend with big ticket announcements - the diesel hike, the FDI opening up, the PSU divestment. All that was required, we are led to believe, to get the party rocking was the RBI " do its bit" to get the crowd on its feet and on to the dance floor. The " do its bit" concerned the one thing that corporate India has consistently asked the RBI to do - cut interest rates. That is the story that marked the weekend, built the expectations and raised the pressure on the RBI as it went into the mid- quarter monetary policy review on Monday. Fortunately, the RBI has not succumbed entirely........

Details

Striking a balance

....The latest policy moves announced by the Reserve Bank of India (RBI) on Monday can be seen in tandem with the reform announcements from New Delhi last week. Together, they should improve investor sentiment in the short term. But not enough has been done to address the longer-term structural problems in the Indian economy....

Read - Mint

RBI does minimum

......The RBI’s action should be seen as the absolute minimum it could do in order to express support for the apparent increase in activity from the Central government on reform and fiscal consolidation, without compromising the fight against inflation. Indeed, the RBI’s statement says as much. On its future course of action, the central bank says that “as policy actions to stimulate growth materialise, monetary policy will reinforce the positive impact of these actions while maintaining its focus on inflation management. Only this will ensure that the economy derives the maximum benefit from the recent, and anticipated, fiscal and supply-side policy measures.”......

Read - BS

CRR cut more potent than rate: PMEAC

......"The RBI has taken a cautious step. The latest data on inflation has not been encouraging...Under the circumstances, I believe this (25 bps reduction in CRR – cash reserve ratio) is the maximum the Reserve Bank could have done," ......

Read........

RBI issues guidelines on treatment of banks' illiquid assets

The Reserve Bank today issued draft guidelines on prudent valuation of banks' long-term assets which are illiquid in nature. "The prudent valuation adjustment for illiquid positions has assumed greater importance in the wake of the recent financial crisis," RBI said in the draft supplementary guidance.......

Read - BS

RBI unlocks Rs. 17000 cr bank funds with CRR cut

Water purifier donated to school lies idle

.....Mr. Subba Rao procured a purifier from Mumbai to donate to the school in keeping with his promise to provide safe drinking water to the students. The students with poor social and economic background, told Mr. Subba Rao during his visit to the school a couple of years ago, where he had studied up to VII standard, ......

Read - The Hindu

RBI plays wait-and-watch game as politics dominates

......Considering the state of the Indian economy and governance, the reforms did not merit immediate rate action. Market and economy watchers should be patient and wait for FDI — “foreign direct investment” — approvals to go through. Perhaps Subbarao was watching the political game instead of succumbing to the excitement of the moment.......

Read......

Easy money? Not just yet, says RBI

Read - Mint

CRR cut a welcome step in right direction: Montek

......"..What RBI has done is that they have acted in the market by releasing resources. It is the release of resources that will make an impact on the rest of the system. It is a step in the right direction, "......

Read......

Analysts says CRR cut indicates RBI's concern on growth

 Analysts and economists have welcomed the RBI decision to keep the rates unchanged in view of the sticky inflation and increase the liquidity with a marginal CRR cut, saying an interest reduction is a bit too far off as the positive impact of the reform measures will take a while to materialise.......

Read.......

Lending rate to pinch less

RATE CUT MUST WAIT BUT DOVISH TONE IS HERE

“Given the comfortable liquidity and the recent reduction in deposit rates by banks, interest rates in general could be expected to trend downwards gradually”                                                                                         Chanda Kochhar                                                                                    MD & CEO, ICICI Bank

It is a positive move but not to the extent we hoped for. It shows that RBI is willing to respond. Our asset liability committee will meet tomorrow to take a call on interest rates Pratip Chaudhuri Chairman, State Bank of India

“Everyone was expecting a rate cut this time. However, RBI seems to be waiting for inflation to soften further. So, probably in the next 6 weeks or so, we can expect a rate cut. Banks have already started lowering rates and a cut by RBI next time will help consumers get relief”                                                                                            Rajeev Talwar                                                                                   Executive Director, DLF

Read - BS

Sound strategy

......Without in any way discounting monetary policy’s role in supporting the growth revival, the RBI is categorical in stating that continuing inflationary pressures alongside risks emerging from the current account deficit and fiscal deficit constrain a stronger policy response to growth risks. Restricting monetary action to a CRR cut for now is a good idea.......

Read - The Hindu

RBI is giving positive signal; repo cut may come in Oct

......The CRR cut will infuse around Rs 17,000 crore into the system and this infusion is not going to do wonders for systemic liquidity and bank credit growth. However, the CRR cut is definitely a precursor for policy easing in RBI’s forthcoming policy review in October 2012.......

Read......

Sorry, no gifts: Why the RBI held back on rate cut, again

......"As policy actions to stimulate growth materialize, monetary policy will reinforce the positive impact of these actions while maintaining its focus on inflation management," ......

Read - Business Today

Smiling Appa - The Boss

 "Hearty GR Archived..............."

This is a second shocking news within a short time of two three weeks after sudden and shocking demise of Smt Anitha Srinivasan GM RBI Chnadigarh. Shri GR Appa was my first boss (Staff Officer) when I joined RBI in 1974.  He was very witty and had a knack to extract the work very smilingly from his juniors. I would always cherish fond memories of GR. May God rest his soul in peace and give courage to his family to sustain the shock. 

-  Ramakant Kulkarni

Ex.Member of Faculty CAB Pune and Ex. GM NABARD Pune

Emerging Kerala: Submerged priorities

......Reserve bank of India (RBI) Deputy Governor Subir Gokarn was a lone sane voice in the sound and fury created by the indoor festival that was “Emerging Kerala” in Kochi. He said the state should exploit the inherent strengths while planning for economic development. Kerala has all the potential to develop at par with some of the developed countries.......

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Currency time-bomb: Counterfeit notes galore with election in the corner !

......It would appear the very purpose of having test runs with Rs 10 polymer currency notes by the RBI was to see and assess the market reaction and, perhaps, introduce the polymer notes on a gradual basis, if and when a final decision is taken by the government. We need to take care of higher denominations rather than small notes !......

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RBI’s prescription for ailing economy

......The most disturbing feature of the whole exercise is the bankers' attitude to these accounts. Governor Subbarao is more blunt when he says: " The general impression I got is that frontline, managers treat no- frills accounts as a nuisance and low income households as an intrusion into their time and business. This is disappointing to say the least. Actually, financial inclusion should be looked upon by banks as an opportunity to build " fortune at the bottom of the pyramid". Outsourcing financial inclusion to other layers may be useful upto a point. Ultimately, these layers have to be integrated with the mainstream banking.

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