.......They will notice that RBI which is a regulator for banks have much more liberal Pension policies than banks. IBA has been too fussy on even small issues and vehemently oppose any demand by bankers for liberalising the pension regulations so that bankers are on par with Central Government employees and / or RBI employees..........
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.
Tuesday, February 19, 2013
As banks cut rates, NBFCs offer higher returns
With falling interest rates, this might be your last chance to lock your savings in deposit-taking non-banking finance companies (NBFCs), an option that’s currently been giving higher rates of return than banks’ domestic term deposits. The rates offered by NBFCs on one-year fixed deposits are 75-175 basis points higher than those top banks offer on their domestic fixed deposits.............
A Budget for banks
......While it’s convenient to blame the Reserve Bank of India’s aggressive monetary tightening for the slowdown in credit demand, a recent analysis by the International Monetary Fund (IMF) shows that higher real interest rates only account for about a quarter of the investment slowdown. Besides, the spurt in inflation that prompted the central bank to raise interest rates 13 times between March 2010 and October 2011 was occasioned by the government’s pathological refusal to do anything about the expansion of its own spending, which is estimated to have more than doubled in six years.......
Finance ministry, RBI spar over public sector banks holding company
NEW DELHI: The Reserve Bank of India and the finance ministry have clashed over the proposed financial holding company for public sector banks, a move that could further delay its creation and upset the government's plan to capitalise public sector banks. The finance ministry has shot down the RBI's proposal to cap the leverage available to the holding company on a par with the holding companies formed to float private banks under the proposed rules for new bank licences...........
Aspirants to get a year to set up banks: Sinha
After receiving in-principle approvals from the Reserve Bank of India (RBI), banking aspirants would get a year to set up banks, RBI Deputy Governor Anand Sinha said today. He added the central bank would issue the much awaited final guidelines on new bank licences “soon”—“much before” the end of the financial year.......
Banking licence norms before March-end: RBI
MUMBAI: The Reserve Bank is likely to come out with the final guidelines for new bank licences much before the end of the fiscal."We are in the process of issuing the licence guidelines. We should issue them soon. The consultation process with the finance ministry is over; everything is settled now, and we will be issuing the guidelines. (It will be) much before the end of this financial year," Deputy Governor Anand Sinha told reporters on the sidelines of an event here on Monday............
Net non-performing assets of banks go up
....." These figures show the herculean task the banking sector in India is facing even as the industry and regulators are putting in place various measures to control further increase in NPAs Our data shows that during the Oct-Dec 2012 quarter, net NPAs of these banks rose by 8.7% or Rs 7,400 crore. We believe net NPAs of these listed banks will cross the Rs 1 lakh crore mark as on March 31, 2013. However, it is likely that ........
Banks want to close year with a special LAF
The Reserve Bank of India (RBI) may again have to open a special repo window under its liquidity adjustment facility (LAF) on the last working day of the financial year, to ease the year-end pressure on banks. Lenders are looking at a liquidity deficit of around Rs2 lakh crore at March-end..............
Two-day trade unions strike to hit life, banking
......... the closure of banks for two consecutive days could pose innumerable problems for customers. While some of the impact of the strike might be blunted by the availability of automated teller machines and internet banking, a large percentage of people with no access to these facilities would be affected............
Misplaced faith in interest rate cuts
.........The question that arises now is simple: can the lowering of interest rates give a fillip to investments? Then, is the decline in inflationary pressure real? The efficacy of the monetary policy depends on clarity on these two questions. Looking at the policy statement, one can clearly see the recent rate cut is more of a hesitant action instead of being based on economic fundamentals. (Time and again, RBI has tried to substantiate its policy based on forecasts instead of trends, something that may not completely substantiate such cuts.) The rate cut only partially supports the actions taken on the fiscal side and in helping the growth recovery process........
We aren’t giving up hope on rate cut: SBI chief
.........We understand that the RBI has its own responsibility and so on. But we believe that the best way to go about it is to augment supply and lower interest rates..........
Poverty and Trade union
......Reserve Bank pensioners demand to update the pension for the last two decades has been kept pending for no valid reason and many are finding it difficult to make both ends meet in these days of ever soaring prices all around.Those who preach should be role models and what they speak should be convincing and acceptable..........
HDFC Bank manager spikes 'magic pen' scam
Using a 'magic pen' and lighter, Rahul Jain planned to earn a comfortable living, pay off his debt and even treat his girl friend. Arrested today, this 26-year-old revealed a unique modus operandi, which came to light when an Assistant Manager at HDFC Bank became suspicious of a cheque. According to police, Jain first saw the magic pen which has erasable ink being sold at Nehru Place market and decided to use it to alter contents of cheques.......
Canara Bank to launch new version of gold loan
Public sector Canara Bank will launch a new version of gold loan that would be as easy as getting a jewel loan from any pawn broker or private finance firms, a top official of the bank has said. “ Terms of gold loan will be highly relaxed and customer friendly than any private firms offering the gold loan to the people," Rajiv Kishore Dubey, CMD of the bank said.........
T S Vijayan likely to be next insurance regulator
...........Though the Central Vigilance Commission (CVC) had cleared Vijayan's name for the post last month, the Appointments Committee of the Cabinet (ACC) has yet to approve. Finance ministry officials said the appointment notification would be issued once this was done.............
Finance ministry and I were like husband and wife: Hari Narayan
J Hari Narayan was at his humorous best in his final public appearance as the Insurance Regulatory and Development Authority (Irda) chairman. The man who has had a fair share of tiffs with the finance ministry and the industry during his five-year term that ends on Wednesday was generous with everybody, including the media, at a function here on Monday.............
Monday, February 18, 2013
Monetary easing: Household savings take a hit - DR. N. A. MUJUMDAR
Read - FPJ
Core inflation may not be true indicator: Subbarao
.......The absence of supply-side response, which has resulted in lasting change in the prices of commodities, has given a “larger momentum” to wholesale-price inflation than core inflation, he added. “In the Reserve Bank, we need to be mindful of these factors in interpreting the movements in headline and core inflation,” he said, speaking at the statistics day conference in RBI’s Mint Road headquarters in Mumbai. RBI has been projecting core inflation as the primary indicator to decide its policy course, rather than wholesale price inflation............
Biting the bullet on letting India Inc into banking
......Final rules, expected soon, have been delayed over disagreement between the government and the central bank on whether the traditionally more financially volatile sectors of property and brokerages should be allowed to apply for licences, which the RBI opposes. Opponents of the new measures worry the reform, driven by the finance ministry, could backfire if risky loans from one branch of a company to another go bad and trigger a broader crisis. “It will be like one person is cooking and the same person is eating it,” said one critic, V K Sharma, chief executive of LIC Housing Finance..............
Combat CAD by making exchange rate flexible: Bimal Jalan
 |
| The issues that we are facing today are systemic and political in nature because ultimately, in a vibrant democracy like ours, the policy making must be with the political system....... |
Derivatiff
Licences for cronyism
..........The context in which these debates occur is a financial sector in which the non-banking sector (or “shadow banking”) has grown enormously and regulatory complexity has increased manifold. In banking itself, however, public sector banks continue to play a dominant role, while the regulator (the RBI) continues to have a latent conflict of interest — the regulator periodically presses banks to help the government in meeting its borrowing requirements and exercises considerable caution when banks lend to politically connected firms. The biggest concern over granting large industrial houses bank licences is the risk of conflicts of interest and ...............
FEIL recognises Dr.Sandip feel..........
Chief General Manager - HR,
Reserve Bank Of India,
Mumbai.
Dear Sir,
Dear Sir,
Your work in the
field of HR has added significant value to RBI. Your name was strongly
recommended by the Managing Committee of FEIL for being the recipient of an
award by Forum for Emotional Intelligence Learning (FEIL) towards outstanding
contribution of leadership development. After due deliberations in the
select management committee of FEIL we are pleased to inform you that it shall
be our privilege to recognize you and your work on leadership development.
Forum for Emotional Intelligence Learning (FEIL), a non-profit pioneered by
Hindustan Petroleum Corporation Limited (HPCL), is committed to building
quality leadership in India. Eminent academicians and outstanding
professionals created this forum with a singular purpose of helping Indian
organizations achieve this objective. In our journey, in the last
several years, we have noted that successful organizations and institutions
derive their strength and enthusiasm from the visionary leadership of their
senior executives. They inspire, coach and mentor their people selflessly.
We feel that recognition of this talented pool is one of the significant
methodologies of ensuring replication of these practices. We believe
leadership seeds leadership competencies. Extensive work by FEIL has
often led us to the discovery of remarkable people. Your remarkable work
brackets you with the very best in the industry. It is a matter of
immense pride for FEIL in conjunction with HPCL, to recognize your excellent
work.
Yours Truly,
S K Dutt,
Hon.General
Secretary,
Forum For Emotional
Intelligence Learning
Women of Vision
A book that profiles nine success stories of women from diverse backgrounds, their personal journeys in building the empires that they have, also reads like a short history of India’s economic and social growth. It holds a mirror to our society, how it has changed in the last couple of decades, and what it has taken for women to reach where they have. Women of Vision: Nine Business Leaders in Conversation With Alam Srinivas is a collection of freewheeling chats with women............
The Paradox of Fiscal Tightening
RBI
Governor D Subbarao has been quoted as saying that there is not much
scope for either fiscal or monetary expansion. Analytical pieces and
editorials in newspapers have echoed the same sentiment with respect to
fiscal expansion, but have been more ambivalent about monetary easing.
This assumes that an increase in fiscal deficit and a loosening of
monetary policy will be expansionary. The analysis that leads to the
formulation of this choice in this manner is flawed for India.........
Corporation Bank conducts roadshow
Corporation Bank on Friday organised a roadshow to market its new savings account variants — ‘Corp Super’ and ‘Corp Signature’ — in Mangalore. A press release said here that the bank launched a door-to-door campaign for the newly launched savings account variants..............
MFIs will be relevant for 10-15 years as our banking system is inefficient: Chakrabarty
‘Rate cap will go if microfinance firms shed priority sector tag’
KOLKATA, FEB 16:
Reserve Bank of India Deputy Governor K. C. Chakrabarty said on Saturday that microfinance institutions (MFIs) should scale up their operations only after understanding their limitations. “MFIs should develop local expertise and scale up locally. They should not scale up nationally, else they will collapse like SKS Microfinance,” Chakrabarty said at a conference on corporate governance in microfinance, organised by the Indian Chamber of Commerce here.............
Inflation eases, but threat persists
.......................Moreover, many leading policy makers in India, notably among them C. Rangarajan, have discussed the implications for the poor and have strongly advocated ‘inflation control’ as an effective anti-poverty policy. The recent slowdown in inflation is encouraging but the time may not be ripe to press the growth accelerator. Surely, the RBI without any pressure from North Block and the industry lobby will do a better job.
Reserve Bank of India sees inflation risks, limited room to ease policy
........"At this moment there is room for monetary easing, but that room is limited ans we have to make a careful judgement on how to use that limited room," Subbarao said on the fringes of a meeting of Group of 20 finance ministers and central bankers. India's high fiscal and current account deficits, in addition to inflation risks, are deterrents for further monetary easing, which is seen necessary to support sagging GDP growth.........
RBI has a positive approach towards Islamic banking: Minister
The Reserve Bank of India has taken a positive approach to the suggestion of an alternative banking system for Muslims, subject to certain laws being amended first, K. Rahman Khan, Minister for Minority Affairs, said here recently. “I have written to the RBI Governor, invoking Section 25 of the Constitution, saying that it was the duty of the State to facilitate every citizen to practice and follow his/her religion,.........
Banks are duty bound to stop flow of fake notes
....... In other words, the banks are duty bound to ensure that no counterfeit note comes out of an ATM. Yet, you find banks violating this directive and the consumer suffers because invariably banks refuse to take responsibility for their negligence, in clear violation of the RBI directive. In fact, they refuse to accept that the fake note came out of their ATMs and express their ‘inability’ to replace the fake with a genuine note.........
Bank unions to join general strike
.....The call for a countrywide strike has been given by the United Forum of Bank Unions (UFBU), comprising nine national level unions including the AIBEA, the NCBE, the BEFI, the NBEF, the NOBW and the AIBOC. Even though bank managements have decided to stock adequate cash in ATMs, normal banking operations are likely to be affected. A number of banks have already informed customers of the fallout of the proposed strike.....
Post Libor scam: Financial markets to move away from 'polled' to 'traded' rates, may fix Mibor
......The Reserve Bank of India (RBI) and commercial banks have arrived at some consensus to gradually move away from 'polled' rates that may be prone to manipulation, to 'traded' rates in calculating the daily benchmarks in the currency and money markets. "At a meeting with the Reserve Bank a week ago, banks were told to give their views. The general preference was that the two most liquid benchmarks,Mibor and RBI reference rates, should be based on dealt rates," said the treasurer of a large bank. "The regulator is favourably inclined towards the change... it will happen over time.".......
'Rate cut likely in March if budget addresses fiscal issues'
The RBI is likely to cut interest rate in its next policy meet on March 19 provided government delivers a "credible budget" addressing fiscal consolidation and continues with the reform push, an HSBC report says. "The RBI is likely to take some comfort from the decline in WPI inflation. In turn, this has increased the odds of another rate cut in March, if Delhi continues to deliver its bit," HSBC said in a research note.............
$1-bn India Venture Opportunities Fund remains non-starter
.....Bankers said the fund had received just about Rs 500 crore. Of this, Rs 340 crore has been invested. This includes Rs 140 crore investment in subordinated debt of companies. The fund faces the challenge of asset-liability mismatch and reservations from the Reserve Bank of India (RBI) about using depositors’ money for risk capital (investments in equity), said an executive with a public sector bank.......
How credit card frauds take place
.....So, does this mean you should stop using your card? No. Come July, cards with an embedded chip and a compulsory pin (like that used for ATM transactions) will be made mandatory in India. This would make your credit card transactions more secure. Till then, here are a few things to keep in mind........
Bank charges you may not know about
.........It’s a laundry list which you will be better off reading and knowing about, saving you the surprise of unexpected costs. But in the meanwhile, here’s a heads-up on some of the more unusual bank charges on regular bank accounts.........................
Sebi seeks greater powers
Market regulator Sebi has sought major overhaul of the securities laws, including greater authority to nail manipulators by way of powers to conduct ‘’search and seizure’’ operations and to demand information from any person in relation to its probes. It has also proposed the recovery of monetary penalties through income-tax arrears mechanism, setting up of special courts to deal with criminal prosecution for violation of securities laws and recognition of Sebi’s counsels as public prosecutors..........
Banks will Hire over 56,000 Jobs in 6 Mths
Public
sector banks, from State Bank of India to Allahabad Bank, will hire as
many as 56,500 people in the next six months in the highest ever
recruitment by the industry in more than a decade as business grows and
the threat of new banks looms with the Reserve Bank of India planning to
issue new licences soon. The recruitments by more than a dozen banks
will be 30% higher than last year’s numbers as hopes of business cycle
turning for the better grow, bankers said............
Read - ET
Read - ET
Saturday, February 16, 2013
Principles for financial market infrastructure and innovations in retail payment systems – some perspectives
 |
Inaugural address delivered by Mr H R Khan, Deputy Governor of the Reserve Bank of India, at the International Seminar on Principles for Financial Market Infrastructures and Innovations in Retail Payment Systems organised by the Reserve Bank of India, New Delhi, 14 February 2013 |
..............Although the urge for replicating the successful payment systems of other countries in one’s own country is very high, it is necessary to customize the processes and products as per the suitability to the country keeping in view particularly the socio-economic and cultural distinctiveness and the regulatory and institutional aspects Regulators need to assess effectiveness of different payment products in their jurisdictions by the authorized entities to ensure that they suit the needs of the common people, the complexities are understood by them and they have inbuilt provision for consumer protection.........
RBI to train police in NE states in fight against fake inst
GUWAHATI: The Reserve Bank has drawn up a comprehensive programme to train local law enforcement agencies, especially the police force, in the North Eastern states to take on fake institutions and fly-by-night operators. "We are in talk with the Chief Secretaries (of North eastern states). This is one of the action points which our Governor has pointed out...
"... that in consultation with chief secretaries chalk out a training programme for police personnel who do not know the nitty gritties of the legal implications," RBI Regional Director P K Jena told reporters here today. ......
Fraud-proof Credit Cards may Cost More
With
the Reserve Bank of India asking banks to issue chipbased credit cards
to new customers to prevent possible fraud, the annual fee for using
them is set to rise in the coming days. The central bank, which is
drafting new guidelines for issuing cards and wants additional security
features thrown in, could even tell banks to give the customer the
option to choose from a “valid only in India’’ credit and debit card..............
Read - ET
Read - ET
Clarification
I am surprised to see my article entitled " RBI, backdoor financier?" included in today's edition of your news circular. It is a reproduction of an old article published in Business Standard on November 5,2011, as indicated therein. However, the Business Standard masthead carrying the date as February 15, 2013 is likely to confuse the reader into thinking that it is a new write-up by me. The RBI policy review mentioned in the first para may be misconstrued as referring to the latest one. I shall be thankful if you issue a correction in tomorrow's edition. I am anxious that the very useful Vitalinfo should not suffer from any infirmities and should remain authentic in carrying the latest news.
Thanking you and with best regards,
Sincerely
Seshan
VITALINFO sincerely regrets for uploading the old article. As rightly pointed out by you, it happened due to the newspaper masthead carrying the current date. The work of searching, reading, shortlisting the info items, cross-checking the references, looking for photographs, if not included in the original articles/news, processing, uploading is all done daily from 4 a.m. and expeditiously completed before 7.30 a.m. While utmost care is taken, such type of error may occur. Thanks for the clarification and sincere apologies for inconvenience caused to you.
RBI opens extra counters for I-T deposition
........Income tax can also be deposited at three branches of private banks. The names of private banks will be displayed at RBI with other information about tax deposition. Deputy General Manager, Banking, Rajeev Dwivedi said that the depositors can take advantage of these arrangements.
Interest rate cut by RBI on March 19 likely: BofA-ML
With inflation easing to a three year low and growth taking a hit, the Reserve Bank (RBI) is likely to reduce policy rates by 0.25 per cent on March 19 when it will carry out the mid-quarter review, says a report by Bank of America-Merrill Lynch. Bank of America-Merrill Lynch (BofA-ML) today said with possibility of GDP numbers coming down to below 5 per cent for the December quarter, the Central bank may shift its stance to supporting growth from containing inflation.........
Cooperative banks set to go for computerization
RANCHI: Cooperative banks in the state are gearing up for a major overhaul with the decision of the government to go for computerization of all the bank offices and linking them to core banking solutions (CBS). Having completed the computerization of 96 out of 120 bank branches of the eight central cooperative banks, managing director of the Jharkhand state cooperative bank K K Soan, has requested the government to take up the matter of pending dues with Bihar government so that further modernization is not crippled owning to fund crunch............
Lokayukta to probe irregularities in recruitment to Co-op Bank
............Balakrishna pointed out that several candidates who had scored poorly in the written examination held for the recruitment process had received the appointment letters. On the other hand, a candidate who had secured first place in the written examination had failed to make it to the final list. “There are gross irregularities in the entire process. Injustice has been done to hundreds of merit candidates,” .................
SBI official sees ‘magical effect’ after repo rate cut
State Bank of India Deputy General Manager Hannah Rachael Mani on Friday observed that the RBI’s cut in its key policy rates in the last week of January has started showing some ‘magical effect’ on the economic activity in different spheres. Addressing a media conference here, she said the volumes of car and home loans registered a three-fold increase in the.........
SBI board approves capital infusion
...The government’s latest capital infusion, which was proposed on 19 January, will take SBI’s tier-I capital, or core capital, to 10%, SBI chairman Pratip Chaudhuri told reporters in a conference to discuss the bank’s third-quarter results on Thursday......
Friday, February 15, 2013
Need for uniform security standards to check card fraud: H R Khan
Incentivise usage of electronic payment systems before dis-incentivising usage of cheques
......A discussion paper on “Dis-incentivising Issuance and Usage of Cheques” (available for comments up to 28 February 2013), put up by the Reserve Bank of India (RBI) on its website, is a classic example of putting the cart before the horse. Because there are problems galore in the electronic payment system, and even before stabilising this, the RBI wants to dispense with the cheque system. If the same objective of reducing usage of cheques can be achieved by incentivising the usage of electronic payments, why not try this positive method, which has more acceptability and receptivity, instead of going in a negative way for achieving the same results?.........
RBI: Retail payment innovations a challenge
.......“The retail payment systems today are dominated by continuous innovations, aided by breakthroughs in technology. This has brought immense benefits, in terms of new products and delivery channels. At the same time, this has engendered concerns for regulators across the globe,” ..........
My View on "Islamic Banking – Participatory, Equality & Indian law"
Thanks for posting a very impressive and unbiased article on the subject of Islamic Banking. I hope you would be providing more of such material in future.As I have been a PG Diploma holder in Islamic Banking and Finance from an Institute at Hyderabad, I find this article very interesting
- A F Nqaqvi, Banking Obudsman (MP & CG)
RBI, backdoor financier? - A.Seshan
.....For a long time, the Centre had unlimited access to the spigot of money creation by RBI. Its excess borrowings from the central bank were automatically transformed into treasury bills owned by the latter. This arrangement was supposed to be terminated after an agreement between RBI and the Centre under which the Ways and Means Advances System (WAMA) was devised with penalties and .......
Gentle soul no more.........
- Arthur J. Lewis. Secretary,
RBI EMP. LAXMAN CHS.
LTD.
I.C. COLONY, LINK ROAD,
BORIVILI (WEST), MUMBAI-400
103
'Decline in inflation is encouraging'
.....“Inflation is still above the RBI’s comfort level, and it should come down further. The figures reflect that inflation is coming down. This is definitely encouraging,” said Montek Singh Ahluwalia, Planning Commission Deputy Chairman, here on Thursday. Worryingly high inflation has been a cause for the Reserve Bank of India’s reluctance to cut interest rates in order to stimulate investment and spending........
Inflation falls. That’s bad news
......................To be sure, one can expect the RBI Governor Duvvuri Subbarao to cut rates to revive the economy when he reviews monetary policy in mid-March. He may even surprise with a pre-policy cut. “But,” said said an economist with a foreign bank who did not wish to be named, “for rate cuts to have a meaningful impact on the economy, it takes a huge lag of 6 months or more.” It’s not a very comforting picture, in the interim.
RBI allows Apollo Tyres to raise FII investment limit to 40 per cent
......RBI today notified that Apollo Tyres has passed resolutions at the board of director's level and a special resolution by the shareholders, to enhance the limit for purchase of its equity shares and convertible debentures by FII through primary market and stock exchanges, under the Portfolio Investment Scheme up to 40 per cent of paid up capital," the bank said in a release...........
Time to act
....This brings down the curtains on the two illegal companies that raised huge amounts of public deposits without regulatory nod. Sahara was once pulled up in 2008 when the Reserve Bank of India (RBI) ordered it to wind up Sahara India Financial Corporation (SIFC), another company from the Sahara stable. The group subsequently claimed that the RBI killed their financial inclusion-based residual non-banking finance company (RNBFC) activities and gave them seven years to repay depositors, which, according to Sahara, was cleared in four. Interestingly, in June 2011, Sebi ordered its two other companies — SIREC and SHIC — to repay the money raised from fraudulently issued optionally fully convertible debentures. ............
Banks are skating on thin ice
.....Rising NPAs, along with the other systemic deteriorations, will bring down the capital adequacy, exacerbate the need for capital and impair the capacity and confidence to lend. As capital adequacy of banks declines, capital requirements will be higher, in addition to the need for regulatory compliance. This will impair lending growth causing a further weakening of an already anemic macro growth. RBI may like to hide all this under the garb of an adequate overall sector-wide capital adequacy ratio of 14%. This is neither correct nor sustainable. The average figure is very misleading here. Indeed, it has no meaning because......
Subbarao will keep a sharp eye on Chidambaram's budget
Reserve Bank of India (RBI) Governor Duvvuri Subbarao has all along talked about the need for a sustained decline in inflation and a faster and more credible road-map for fiscal consolidation, especially of the fiscal and current account deficits. That was the prerequisite to slash interest rates. ....................................
Infuse more capital, allow inflation-linked bonds
....Suggestions made by an RBI group on gold-backed financial products, which could include allowing banks to offer gold deposits in demat form and developing the gold loan market, could be the way forward. Introduction of inflation-linked bonds can also help in curtailing the gold demand. Considering that the investment needs of the economy are large in comparison to the existing financing capacity of the banking and non-banking sectors, combined with greater capital requirements for banks under Basel III norms, there is a need for more capital into the banking system. ......
Libor fallout: RBI takes a re-look at Mibor
..............The issue was also discussed at a seminar organised by the Fixed Income Money Market and Derivatives Association of India (Fimmda) and the Primary Dealers Association of India in the first week of February in Sri Lankan capital of Colombo. RBI should probably take up a role in fixing the Mibor so that a Libor fixing scandal like situation can be avoided with the Mibor,”..........
Financial inclusion stumbles on 'last-mile' gap
......Initially, the BC model was rolled out bilaterally, with banks appointing their BCs all over the country, under contractual terms. The BCs made all point-of-service investments, in kiosks and human interfaces, and had autonomy in selecting the technology platforms. Over time, this resulted in a diversity of captive networks, which remained largely non-interoperable and disconnected, thus preventing any benefits of pooling and scale. A fundamental challenge of the BC model has been the watered-down service menu: no passbook facilities, no provisions for joint account opening, minimum age for account holders, which created the impression of a discounted second-grade service compared to the real bank interface. BC staffers also tend to be paid less than bank employees, which results in low quality and high staff turnover........
Why the rupee remains a concern
....This exchange rate policy is advisable in ideal conditions, but the present conditions are a lot different from those that find mention in the textbooks. The exchange rate policy, therefore, needs a critical examination. Writing in The Hindu Business Line on 24 January, former Deputy Governor of RBI S.S.Tarapore noted: “With the inflation rate persistently above that in major industrial countries, the rupee is clearly overvalued. Adjusting for inflation rate differentials the present nominal dollar-rupee rate............
My View on "Chidu-nomics - the threat within":
Those who are in charge of policy formulation for financial sector will do well to keep in the back of their mind the following observation made by Sukhmoy Chakravarty in 1986: “In a mixed developing economy, there is considerable scope for direct controls for matters which pertain to basic necessities of life. But equally clearly there are major areas of economic life where a variety of indirect methods of regulation may be usefully deployed. I believe that monetary policy is only one amongst these methods of regulations. It is somewhat simple minded and may therefore be misleading to expect a solution to India’s most pressing problems of growth and poverty from any monetary policy, howsoever judiciously devised. But it is even more dangerous to indulge in the feeling that ‘easy credit, low interest rate’ policy contains the major answer to India’s pressing problems of growth, poverty and self-reliance.”(Excerpted from Sir Purushotamdas Thakurdas Memorial Lecture,1986) Sixteen years have not in any way reduced the relevance of the above statement.
- M.G.Warrier
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