Beyond banking and insurance

........Anand Sinha, Deputy Governor, Reserve Bank of India said, "Banking has thrown up a large number of complex issues in the last four to five years. In India, the financial system is dominated by banks we are trying to develop the corporate bond market in particular in order to diversify the funding channels. In the future, the banking system will remain the predominant funding channel in India. The Indian economy is a large and growing economy and the financial system is becoming increasingly open.............

Read - ET

Condemned to repeat the past

......All of the above is relevant to India. The Reserve Bank of India (RBI) will deny it, but its effective rupee management underwent a sea change after the global financial crisis. Gone was the prior aggressive intervention in the currency market to check the pressure on the rupee to appreciate because of destabilising capital inflows. The new mantra was a hands-off policy. This had its merits given the constraint: tight monetary policy, to check inflation. But along the way Indian policy makers forgot whether or not the rupee was misaligned........

Read | Business Standard

NBFCs say RBI likely to leave repo rate unchanged

........NBFCs have requested RBI to have stability in its policy, saying a lot of investors interested in the sector are looking towards a stable regulatory regime. "The RBI should have a stable policy regime for a minimum of one decade. Once that is in, they will invest in a big way. It will help the economy well and also help achieve financial inclusion,"...........

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

RBI asked to restore priority sector lending tag for bank loans to NBFCs

......The NBFCs have also requested the RBI to put on hold the Usha Thorat committee recommendations on issues and concerns in the NBFC sector, till the economy recovers. Among other things, the draft guidelines of the Committee suggest that NBFCs be brought on par with banks by reducing the period for classifying loans as non-performing from 180 days to 90 days.......

Read - HBL

Bank FD investors may exit on falling rates

........bank fixed deposit rates continue to fall, investors might move their funds to dynamic bond funds and fixed deposits of high-rated corporates and non-banking finance companies (NBFCs), financial planners said. According to them, many investors in metros are having a slightly higher risk appetite and invest in these instruments.............

Read | Business Standard

Investing in naïvety

....In 1987, the Supreme Court, in the Reserve Bank of India vs Peerless Co case, asked the government the action that it was taking against the "mushroom growth of finance and investment companies" offering staggeringly high rate of interest, like 30 per cent in six months. Analysing a scheme, the judges said the investor was always on the losing end - "perfect case of heads I win, tails you lose". ........

Read | Business Standard

CPI inflation is key to India’s macro outlook

.....In the past, price levels as measured by WPI and CPI (Industrial Workers) usually tracked similar trends—but over the last three years a huge gap has opened up. To be sure, the Reserve Bank of India (RBI) has always maintained that it looks at all price statistics —including WPI, CPI and GDP deflator—in assessing inflation trends.......

Read - Moneylife

Beware the bond lure

............Worse, if domestic macroeconomic conditions worsen, a "better safe than sorry" attitude on the part of investors can result in a surge of outflows, which will only compound the other problems. These may seem like low-probability outcomes, but the risks should not be underestimated, in terms of either likelihood or, more importantly, impact. Essentially, what the economy needs is not more time being bought through a bond issuance, but some quick and concrete measures to address the serious macroeconomic imbalances. .......

Read | Business Standard

Amanath bank withdrawal cap continues, customers worried

.."It will take at least one more week to get the Reserve Bank of India (RBI) to withdraw its circular restricting the withdrawal to Rs 1000. The depositors have to wait till Monday to get clearance from RBI. Already, bank president Naseer Ahmed has met the Registrar of Co-operative Societies and held a meeting with RBI officials in the city," said a director, who wanted to remain anonymous.  He added that the local RBI officials had told the bank authorities to approach RBI headquarters in Mumbai on the issue. ..........

Read........

2008 loan-waiver errors: Nabard report by April 20

National Bank for Agriculture and Rural Development's (Nabard) state regional office, which is looking into irregularities pointed out by Comptroller and Auditor General (CAG) in agricultural debt waiver and debt relief scheme in 2008 in the state, is likely to submit its report on April 20. Nabard Chief General Manager M V Ashok said that over 30 lakh bank accounts are being examined through which Rs 5,000 crore was disbursed towards farmers' debt waiver and debt relief scheme.......

Read - IE

An innovative technology platform to provide bank-like service to low-wage workers

What do you get when you put a friendly neighbourhood kirana store, a construction worker and a mobile phone together? As much as this may suggest 'mobile refills', the answer is low-cost banking and financial services that can be accessed in an instant via a mobile phone........ Read......

My View on "SBI wages war against willful defaulters"

Unless and until an inbuilt mechanism is introduced to discipline both borrowers and bankers, the problem of NPAs will continue to haunt the banking system.This is not an insurmountable issue, but authorities, banks and borrowers have an aversion to introduce a lasting solution to contain formation of NPAs.The borrowers and banks enjoy some known and unknown benefits by having NPAs in the books and the authorities keep a blind eye on the problem till it reaches the brink of collapse.The unfortunate part of this is that the depositors, good borrowers, shareholders and general tax paying public bear the brunt and hence defaulters have no concern.They become parasites and enjoy others money merrily. 

- Dr.T.V.Gopalakrishnan

Bandhan Microfinance keen on banking foray; securitises Rs 355 cr loans

Micro-credit company Bandhan Microfinance is preparing to apply for banking licence as it meets all the criteria specified in the final guidelines released by the Reserve Bank, a top company official has said. “We are preparing to apply for bank licence as we aim to provide financial services in un-banked and rural areas,” Bandhan Financial Services Chairman and Managing Director Chandra Shekhar Ghosh told PTI here today, adding, the company has adequate capital to set up a bank...........

Read - HBL

VCB achieves growth rate of 26.61 per cent, says chairman

Visakhapatnam Co-operative Bank (VCB) has not only retained its status as the biggest cooperative bank in Andhra Pradesh with regard to deposits and advances but also recorded an impressive growth rate of 26.61 per cent in mobilising deposits during just-concluded financial year.........

Read - The Hindu

Markets bet on SBI arms merger plan with change at the top, Pratip Chaudhari's term to end in Sept

Market players are betting big on the merger play between the country's largest lender State Bank of India (SBI) an]d its subsidiaries. SBI chairman Pratip Chaudhari had put the merger plans on the backburner but investors have started building position in SBI subsidiaries as Chaudhari's term is coming to an end in September, said experts............ 

Read - ET

Raje demands apology from RBI Governor

Jaipur: BJP Rajasthan president Vasundhara Raje on Monday demanded apology from RBI Governor D Subbarao for his comment on the rise in food inflation. The RBI Governor by saying that rural people's shift to protein and eating more of egg, milk and fruits is causing food inflation is an insult of the poor, she said. Subbarao should visit Rajasthan to see the ground reality she said. "He should come and see that how tribals are living," ........

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

Implementation of RBI guidelines key for financial inclusion

Financial inclusion is a journey which the Indian banking industry has started. Like any other journey, this one too is fraught with challenges and limitations, and needs a roadmap to achieve its goal. Deepak Singhal, Regional Director, Reserve Bank of India, discussed this and more in an exclusive interaction with SupportBiz.............

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

VITALINFO is valuable info.............

Dear Sir, 

I am so thankful to you for including my email in the mailing list of VITALINFO. I am a Faculty Member in NABARD at Bankers Institute of Rural Developoment, Mangalore. Your efforts are very appreciable and I find the articles and info to be highly valuable for me. Thanks once again. 

With regards 

Srinivasan Rajagopalan

Ex-bankers get million-dollar offers

.....“Companies have begun identifying personnel for key roles. Given that hiring is a six-to-nine month process, most institutions have paid headhunters to identify available talent. While the packages offered by the new players might not be drastically different, stock options will make their offers financially attractive,”.......

Read | Business Standard

Retired bankers in demand as India Inc looks for licence

.....It’s not only commercial bankers who are sought. Former central bankers are also in high demand — former central banker A K Khound, who retired from RBI as Chief General Manager of the Banking Operations and Development Department, which drafted the licensing norms, will share his knowledge with Aditya Birla Financial Services.........

Read | Business Standard

Women-only Bank in India: Worth it?

........However, when I went deep into the subject-matter, I realized that the whole exercise might go futile and was not required in the first place. It is basically in rural and semi-urban areas where women need to be drawn to the Banking system. For this, creating an altogether new Bank from scratch may not serve the very purpose. Secondly, there might be security and safety issues in case even guards deployed at branches are females, as such branches can become vulnerable to robberies. Thirdly, women-only Bank might not turn out to be a profitable business proposition as the business prospects from women (most of whom are not earning) shall be limited............

Read.........

Is the Mahila Bank a good idea?

......Targeting women as primary customers and employees of a bank to be promoted by the government is a rare combination of good economics and good politics. The Government of India is in the business of banking; its pre-eminent position being challenged recently. In the backdrop of the upcoming election and lack of ability to fund welfare programmes, the Mahila Bank announcement creates the feel-good factor, and can yet be a profitable idea.........

Read | Business Standard

My View on "Reserve Bank of India's powers not to be clipped: ..."

It is little discomforting to comment on the personal views of an eminent Justice on an issue which he had opportunity to examine threadbare. But here, one is compelled to clarify certain misconceptions which are being conveyed to the media. One, Reserve Bank of India all along has been functioning within the mandated contours of responsibility and whenever central bank’s autonomy has surfaced as a contentious issue, it has happened when North Block has attempted to manipulate RBI’s perceptions by pre-emptive tactics through media or otherwise. It is public knowledge that GOI-RBI consultations are an ongoing process and these have never been dependent on the incumbent holding the position of RBI Governor. Recent years have seen RBI working with maximum transparency in policy formulation and implementation. Discussion papers on policy issues, draft guidelines on regulatory measures are notified to invite comments of stake-holders. Just as judiciary cannot function the same way as legislatures function, financial sector regulators may not be able to go by ‘majority vote’ on each issue. 

- M.G.Warrier

Co-operative bank crisis may hit vote politics

......In a meeting with the National Bank for Agricultural and Rural Development (Nabard) last week, the government took stock of the situation. "We have told them that it is an issue between the state government and the Bank. We don't have a role in it. The state government also wanted to know whether the bank needs any capital infusion to meet the required 4% capital adequacy norms of the Reserve Bank of India," said S Padmanabhan, Nabard's chief general manager........

Read -TOI

Economists for bank rate cut but agree CAD a larger problem

The Reserve Bank of India brass today met the economists of several banks, as part of the exercise before the annual review, on May 3, of monetary policy. Several, it appears, favoured a rate cut to re-start the investment cycle..........

Read | Business Standard

Economists bat for rate cuts to boost growth

........Economists' views come more or less in contradiction with the bankers' view who wanted the governor to cut CRR and not repo rate saying given the high cost of deposits a repo cut would not help them cut their lending rates.........

Read - Business Today

Inclusive Monetary Fund

........The IMF makes the comment in a conference call in its paper, Jobs and Growth: Analytical and operational considerations for the Fund, released last week. Deputy Director of IMF Kalpana Kochhar discussing the paper said "considering issues of job creation and inclusive growth will become a standard element of the IMF's surveillance".........

Read - IE

Another scandal to ride through

..........Responding to queries, Finance Minister P Chidambaram said, “Inquiries have been put in motion in respect of the names that have been exposed.” Such pronouncements were made by government spokesmen after information about secret bank accounts of Indians in Switzerland and Liechtenstein came to light but they did not lead to any action. Opening offshore accounts is not a crime but their structures are designed to conceal actual ownership and they are often used for illegal purposes like tax evasion. Interestingly, almost all the Indian accounts uncovered by ICIJ were opened during the economic boom of the last decade.........

Read - The Gulf Today

Raiffeisen Bank International CEO Herbert Stepic returns 2 million euro in pay

..."The amount to be repaid was set at 2 million euros, and I complied with that decision with conviction and transferred the amount to RBI," he said. "I consider this step as a moral obligation towards both the organisation, for which I have been working with great commitment for more than 40 years, as well as its staff members," he said, calling the repayment "my personal contribution to the rigorous cost saving measures" at the bank............

Read - ET

RBI to release Rs 10 bank note bearing rupee symbol

.....The note will also bear the signature of RBI Governor Dr D Subbarao and the year of printing '2013' printed on the obverse side, a RBI release said...........

Read - FE

Three independent members quit Sahara boards

Amid a fierce regulatory battle with capital markets watchdog Sebi, diversified conglomerate Sahara group has seen three independent members exiting from the boards of its various companies. Those having relinquished their association with Sahara group include RBI's former Deputy Governor Amitabha Ghosh, retired Supreme Court judge S Mohan and New India Assurance Company's former Chairman AC Mukherjee...........

Read.......

Banks may need more time to replace debit, credit cards

........“Some banks may find it difficult to meet the deadline. The task involved is enormous, banks have to develop a new platform, test it thoroughly, create new chip-based cards and segregate cards that have been used overseas. In some banks, this process has just started and it will be difficult for them to meet the deadline,” ........

Read | Business Standard

BJP may support RBI’s guidelines for new banks

......Party treasurer and member of Rajya Sabha, Piyush Goyal, had demanded that the Centre should not discriminate against certain sectors of the economy. He had urged the Government and the RBI to look at all sectors with an open mind, while objecting to the provision in the draft guidelines that prohibit companies with 10 per cent stake in real estate from starting a bank. “We are happy that the final guidelines do not have such restrictions. You cannot put restrictions artificially,” Goyal told Business Line. He said draft guidelines reminded the era of licence raj........

Read - HBL

IDBI Bank’s fee income from govt biz doubles in FY13

......“We are proactively encouraging our customers to pay their taxes through us. This is part of our cross-sell activity. “We want to leverage our technology as much as possible to facilitate e-payments to the Central and State Governments. Even non-IDBI customers can pay their taxes through us.” Government business presents two-fold advantage for banks. While banks earn fee income, the funds collected also improve their overall low-cost CASA (current account, savings account) deposits, albeit only for a day. “Any banking relationship is not just an asset relationship. It has to be seen holistically as asset plus liability plus whatever other cross-sell opportunities that a commercial bank can tap,”.......

Read - HBL

NBFCs under lens for margin funding

.....The real problem arises when stocks actually fall. When prices tank in a short-time, NBFCs which have funded investors are forced to sell to recover the money financed.” “This accentuates the fall in stock prices, resulting in near-collapse of some stock.” These days, margin sales by NBFCs are causing frequent cases of instability in the market. At present, deposit-taking NBFCs are regulated by the Reserve Bank of India (RBI), and as far as the non-deposit taking NBFCs are concerned, it is a grey area,......

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

Foreign banks to slow down in India as RBI imposes stiffer rules on lending to priority sectors

.........The new rules take effect in five years. "The regulations are saying we have to go to 40% in five years, while our balance sheets are doubling. We don't think it is either sensible or achievable," ..........

Read - ET

RBI 'uneasy' at sovereign bond offer to foreign investors

.....“In a recent interaction, the central bank had communicated its discomfort in issuing sovereign bonds. It has been observed in the past that small trigger can create volatility in the bond market,” said a senior from a foreign bank. The Reserve Bank of India manages the government’s borrowing programme, ensuring it is conducted smoothly.......

Read | Business Standard

Indian banks going nowhere: Jefferies

......“Over the next 12 months, we believe the fundamentals of the domestic banking sector are unlikely to change much, with tepid loan and deposit growth, range-bound NIMs and weak asset quality,......

Read..........

Finmin aims to halve net bad loans of PSBs

......."Each bank is in a different situation. Though the guidelines will be issued for all banks, there can be some relaxation on implementation for some banks under exceptional circumstances,".............

Read - ET

Mamata to seek moratorium on interest paid by State Govt

.........“The Centre is taking away Rs 40,000 crore as interest, more than the revenue earned by the State, every year. The Reserve Bank of India is cutting the money unilaterally. We are going to meet Prime Minister and Finance Minister,” .............

Read - HBL

India Mortgage Guarantee Corporation to commence operations soon

India Mortgage Guarantee Corporation, a joint venture between the National Housing Board (NHB), Genworth Financial, Asian Development Bank and the International Finance Corporation is expected to commence operations soon. "We have applied for a license to the Reserve Bank of India which is expected to come in soon," RV Verma, chairman and managing director, National Housing Bank said...........

Read - TOI

Rising NPAs, a major concern for financing infra projects: bankers

.....Growing non-performing assets (NPAs) is a major hurdle for providing more finances to infrastructure projects, bankers told Finance Minister P. Chidambaram here on Monday. “We conveyed to the Finance Minister that due to current dispensation regarding NPAs, there are difficulties in providing more finances,” State Bank of India Chairman Pratip Chaudhuri said, while talking to reporters after a meeting the Finance Minister had with bankers and industrialists here..........

Read - The Hindu

RBI set to comb spike in bad loans

......Even as the finance ministry and RBI have directed banks to migrate to the core banking solution and eliminate manual intervention while detecting NPAs in their books, several banks have been found using manual tools while managing bad assets. Manual intervention implies recording of crucial data manually, which leaves room for data mismatch. Such mismatch results in an incorrect assessments of the NPA problem, bankers said.......

Read - Hindustan Times

SBI wages war on wilful defaulters

.......SBI began compiling the wilful defaulters’ list in 1999. It has 1,124 borrowers on the list, with Rs.7,315 crore of loans. Besides sharing the names of the wilful defaulters with the Reserve Bank of India (RBI) and Credit Information Bureau (India) Ltd (Cibil), SBI also plans to publish the photographs of the promoters of the companies in leading newspapers........

Read - Mint

FSLRC’s monetary policy myopia

FSLRC’s recommendations are a serious blow to the independence of the Reserve Bank of India

.........The Financial Sector Legislative Reforms Commission’s (FSLRC’s) recommendations on monetary policy remind one of Gresham’s law that bad money drives out good money. In this case, the FSLRC, which has the laudable objective of enhancing accountability and independence for the Reserve Bank of India (RBI), has in its recommendations made it extremely difficult for RBI to achieve those objectives.......

Read - Mint

Slimming Package - A regulator for the regulators? Where does that leave RBI?

.....Brewing between Mumbai’s Mint Street (the Reserve Bank headquarters) and Delhi’s North Block (the finance ministry) is a turf war of mammoth importance. That’s not just because this finance ministry has been at odds with the central bank over its decision to keep interest rates high to fight inflation. Earlier battles too have gone down in history. For instance, former RBI governor Y.V. Reddy’s steadfast stance against the finance ministry push on capital account convertibility saved India from a worse fate in the 2008 global financial crisis.......

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

RBI has better credibility than government

.....One problem with the seven-member committee, which will replace the RBI in deciding bank rates, is that it will be the government’s hand-picked body. Five members will be representing the government and the rest the RBI. It will not be difficult for the government to fill it with people who will be at its beck and call. As an institution, the RBI commands considerable respect among the people, certainly more than the government.

Read.........

“A Telephone Call Can Change Things”

........Here we have suggested the monetary policy committee. Please understand the country is being run by politicians -- in a democracy it is the job of the people elected to run the country. Now whether capital inflows should be there or not is a political decision. All we are saying is give the remit to the RBI at the beginning, quantify the objectives and do it in consultation with the RBI if needed. And if in the end, the RBI cannot do it, it has to explain its actions. Today RBI does not tell you how its mid-term policy is decided........

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

A matter of clarity

Exporters seeking to write off unrealised export bills will have to first surrender proportionate export incentives and then approach the banks. The Reserve Bank of India (RBI) has issued revised instructions to this effect through a circular dated March 12, 2013. The circular - A P (DIR series) circular No. 88 - further liberalises certain provisions and gives greater flexibility to exporters.............

Read | Business Standard

New bank licences: RBI Governor to brief panel on April 9

.....Reserve Bank of India Governor D. Subbarao will appear before the Parliamentary Standing Committee on Finance on Tuesday. He is likely to inform the panel about the final guidelines for award of new licences in the banking sector.......

Read - HBL

Finance Ministry relaxes govt banks' staff promotion norms

.............The Reserve Bank of India (RBI) has termed the present decade as retirement decade. In the next ten years, government-run banks have to hire in lakhs to fill up retirements and natural attrition, to keep their branches and other operations running. In addition, with Reserve Bank of India’s is set to allow new banks in the country, the public sector banks is likely to be favourite haunting ground for private sector players........................

Read | Business Standard

Govt may Regulate Incentives to Banking Staff

............RBI has a say on the salaries and bonuses of bank CEOs of private and foreign banks, but does not tinker with staff salaries. It may ban banks from selling third-party products though their branches. If banks do not get their act together, they may even be asked to float a 100 per cent subsidiary to sell financial products, said the RBI official. Staff at private and foreign banks are incentivised to sell insurance products and mutual funds, mobilising deposits and trading in bonds and currencies. 

Read - ET

VITALINFO's systematic coverage - Dr.T.V.Gopalakrishnan

Dear Tarambale,
Thank you very much for picking up one of my comments and highlighting in your blog. I have been forwarding your blog to many of my friends and they have all the  appreciation for your efforts and systematically covering up most of the issues on banking and finance. I have forwarded your blog to Mr TCA Srinivasa Raghavan, who has written in the Hindu regarding the Glimpses of oral History of RBI. He has met you also in CAB when  I brought him to introduce Ms Kamala Rajan, then principal. He was part of our team engaged in the writing of Vol IV of RBI History.

With regards,

Dr.T.V.Gopalakrishnan

Banking on Financial Inclusion

............The RBI also seems to be exploring the possibility of enshrining financial inclusion in the Code of Bank’s Commitments to Customers, according to a recent statement by its Deputy Governor KC Chakrabarty. The voluntary code sets minimum standards of banking practices for banks in their public dealings. However, banks have been tentative about expanding operations to previously-unbanked or under-served rural and semi-urban areas so far, due to the low rates of return on investment in personnel and infrastructure. In response to such fears, the recently-released report of the Financial Sector Legislative Reforms Commission (FSLRC) acknowledges that there may be costs incurred by financial service providers in implementing such directions, and recommends that the Central Government reimburse the cost of granting such access to the financial service providers............

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

Tension as RBI does a Cyprus on Amanath Cooperative Bank

....Chaos prevailed as hundreds of customers thronged the bank’s head office in Shivajinagar and roughed up the employees to vent their anger. The employees initially tried to pacify them citing a technical snag but the account holders created a ruckus after they came to know about the RBI directive restricting transactions and blocking deposits. The Shivajinagar police rushed to the spot and managed to bring some order. Later, police officials convened a meeting with the senior bank executives and the account holders, who were assured that the matter would be resolved by Monday.......

Read - The Hindu

Customers needn't fear: Amanath Bank

.........."The RCS told us the RBI rider followed the scrutiny of an old balance sheet of the bank which had a huge amount of NPAs (non-performing assets). But the bank has brought down the NPAs phenomenally. The latest balance sheet reflects this. We'll approach the RBI on Monday with the new balance sheet to convince the central bank about the reduction of NPAs in the current financial year,".............

Read - TOI

Despair, denial, drama, divestments = discount sale

The market has taken a leg down post the Union Budget as investors despair about "nothing happening on the ground". Political drama with the DMK withdrawing support to the government and SP raising political rhetoric made investors distrustful about continuation of reforms. As if that wasn't enough, the Reserve Bank of India's (RBI) denial to cut interest rates aggressively, despite, by its own admission, companies losing pricing power and growth plummeting, added to the fire.....

Read | Business Standard

Anatomy of a probe: Too many suspicious bank accounts not reported

........Apart from these, banks have also let themselves be used by India’s cooperative banks for high-value cash transactions. Many such transactions have come to the regulator’s notice. These executives may or may not be aiding and abetting money laundering, as it is still not clear whether the source of money is criminal activities and some of it is aimed at funding terrorist groups. It is also unlikely that the money will flow out of the country. Still, the transactions are very suspicious, and even if they slip through the first line of defence, the front desk of a bank, they must be classified as suspicious accounts and investigated thoroughly. The banks have not done that...........

Read - Mint

Probe initiated against persons named in expose: Chidambaram

............n the sting operations carried out by Cobrapost alleging money laundering by some officials of ICICI Bank, Axis Bank and HDFC Bank, Mr. Chidambaram said the Reserve Bank is seriously looking into the issue and stern action will be taken by the government if any violation of tax law was found. “RBI is seriously looking into the matter,” he said, adding, “my officers have taken a look at ... sting. They have drawn some conclusions, we are looking into it. If violation is found (with regard to tax laws), stern action will be taken”.

Read - The Hindu

3rd International Summit on Skill Development

Welcome Address & Opening Remarks: Mr. Kishor Kher – President  & Trustee, KSWA

Setting the Context:  Dr. Subir Gokarn – Ex- Deputy Governor RBI

Event Date: 

17 April 2013 - 10:00am - 6:00pm

Read.........

CAD: the danger is real

.....Such comforting words notwithstanding, it has to be realised that the CAD is unacceptably high, far higher than what the Reserve Bank of India (RBI) and other official forecasters say it should ideally be in the present circumstances (between 2.5 per cent and 3 per cent of GDP). Besides, the official explanations do not in any way minimise the structural risks arising out of a grim trade scenario and dependence on short-term capital inflows to bridge the deficit......

Read - The Hindu

How the CAD impacts ordinary Indians - S.S.Tarapore

.....To contain the CAD, multi- pronged measures are required: ( a) The RBI should be allowed to sharply reverse monetary policy by increasing interest rates and reserve requirements and curtail RBI accommodation. This will entail increases in interest rates on deposits, lending and securities......

Read - FPJ

New fiscal, new VARIABLES

......ow these policy decisions play out at the micro and macro levels in the realty sector will be seen in the coming months. The RBI will announce its Monetary Policy Statement for 2013-14 in May amid demands for a further reduction in rates. Though the repo rate was cut by 2.5 basis points in March, the banks have not reduced the interest rates on housing loans.......

Read - The Hindu

1991-type economic crisis unlikely: RBI

"..........it's unlikely that we will have a crisis of 1991-type simply because we have moved on. India is a much more liberalised economy, we integrated into the world, our exchange rate is largely market-determined, our financial markets are deeper", Subbarao said in an address, organised by the Federation of Karnataka Chambers of Commerce and Industry............

Read - IE

Rise in rural income fuelling food inflation: RBI Governor D Subbarao

.........Subbarao said here the poor segments of the population are seeing an increase in income, leading to shift in their dietary habits. People are shifting from cereals to protein and eating more of egg, meat, milk, vegetables, pulses and fruits and "that's causing food inflation"..........

Read - ET

6% growth not enough given India's poverty level: Subbarao

......"For a country, which by whatever estimates, has at least 300 million people below poverty line, a six per cent growth is just not enough."..........

Read | Business Standard

Slipping up on reforms front will prove costly, says Subbarao

..........The Government has raised customs duty to restrain gold imports. He pointed out that India can accelerate growth and improve welfare only if we effectively implement wide ranging economic and governance reforms. Subbarao said “slipping up on this will amount to a costly and potentially irreversible squandering away of opportunities. The Government has to take the lead in the process of economic revival. As the central bank and as the regulator of large segments of the financial sector, the RBI too has an important role to play.”........

Read - HBL

P Chidambaram for reviewing FDI ceiling in different sectors

......Presently two committees -- one under Department of Economic Affairs Secretary Arvind Mayaram and the other formed by RBI -- are looking into different aspects of the foreign investment. He said RBI was likely to come out with its paper on FDI in two weeks time. "We will take it forward as soon as we have RBI paper and the committee's report. I don't think either the PM or I have any pre-conceived opinion on a particular cap", he said........

Read - IE

Consolidate to be competitive

......Ultimately, we need to ensure that our products are competitive in order to increase the market share of our exports and to curb imports. Rising domestic inflation has made India a high-cost economy even as weaknesses in our infrastructure remain a constraint on our competitiveness. The RBI’s indices of real effective exchange rate indicate that the rupee has appreciated on an inflation-adjusted basis against a basket of currencies. This needs to be corrected through some moderation in inflation................

Read - Hindustan Times

A tough job on hand for central banker

.....As analysts across the globe break their heads over the fall-out of BOJ action on other economies, nearer home, it is bound to have demonstration effect. For rate cut protagonists in India, BOJ has given them fresh fodder to take on the Reserve Bank of India (RBI) which has come under intense criticism from across the canvass for its strident stance. With the apex bank slated to announce its annual monetary policy on May 3, pro-rate cut voices are bound to reach a crescendo......

Read - The Hindu

Economic stress and political outcomes - Dr.Subir Gokarn

.........The Indian experience suggests that while crisis can lead to reform, it is not very clear that this is the result of a decisive political mandate. In fact, the other two instances that I referred to suggest that incumbents are not necessarily rewarded for what may be perceived as good economic performance during their terms. This may imply, purely from the perspective of symmetry, that they are not penalised for adverse economic conditions during their term........

Read | Business Standard

Soon, trade in G-sec, corp bond on bourses

........: “Once the debt exchanges are launched, the rates will be visible and the securities will be visible. Now, market participants do not know which securities are on sale and what rates are being quoted. We will certainly be a member of the exchange. To start with, RBI allows banks to undertake only proprietary trade, but soon business is likely to happen on behalf of clients too.” ........

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

FD rates will dip from May, IDBI chief says

IDBI Bank has made a successful transformation from a staid development financial institution to a full-fledged commercial bank. The financial conglomerate has emerged as one of the largest tax collectors for the government. While business has been hit by the economic slowdown, IDBI Bank CMD R M Malla tells TOI in an interview that he is spotting green shoots and rates will fall from next month. Excerpts: ............

Read - TOI

Facebook won’t Remain a Closed Book for Sebi

Capital market regulator Sebi could issue guidelines to companies on use of Twitter, Facebook and other social media for disseminating information to clients and shareholders, following the lead of its American counterpart, the Securities Exchange Commission (SEC). Further, the Indian regulator will soon hire staff to sift through social media sites and blogs to unearth tips that could impact stock price before they have been disclosed through official channels........

Read - ET

Court makes life less taxing

..........The Court has directed that the Department must take suitable remedial steps to avoid unnecessary burden or harassment caused to tax payers. The claim for TDS should not be rejected on the ground that the amounts do not tally with the Form 26AS. It should fix a time limit within which the unmatched challans shall be verified and corrected. The taxpayers as deductees, should not be made to suffer because of faults made by the deductors, as it causes unwarranted harassment and inconvenience to tax payers. Once the payment for the TDS is received by the Department, credit should be given to the tax payer.......

Read | Business Standard

Now, get Aadhaar to obtain PAN

.........“Once Aadhaar is accepted as a valid proof for obtaining PAN, the I-T Department would be able to weed out the menace of faking, forging or duplication of PAN cards. The amalgamation of the databases is in full swing and the ministry would soon notify the rules,” ..............

Read - Deccan Herald

Documents in hand for hassle-free filing

....With the tax department focusing more on all investments made and the expenditure incurred by taxpayers, it is essential to maintain proper documentation for all financial transactions. Though the tax return forms are annexure-less, the tax department may seek supporting documents at a later stage........

Read - HBL

New financial code to be Ponzi-killer

.....Many of these are Ponzi schemes, which work on the principle of paying off old investors from the money brought in by new ones, without any real economic activity. Several such schemes, including those based on plantations, emus and Nidhi companies have imploded in the past, leading to serious losses to investors. A Ponzi typically unravels when the flow of new money is cut off. The new code proposes to end this menace.......

Read | Business Standard

Demand for office space to reach 30 mn sq ft this year: DTZ

The demand for office space is likely to increase to 30.5 million sq ft this year, global real estate advisor DTZ said. "Fears of downside risks for the global economy have started to fade, which combined with local economic policy amendments including the opening of 51 percent FDI in multi- brand retail, climb-down of repo rates by the Reserve Bank of India (RBI) and stronger economic outlook, have resulted in improved market sentiment,"..........

Read..........

SBH to open 50 branches

The State Bank of Hyderabad has decided to open 50 branches and 15 ultra small branches in Visakhapatnam zone, comprising six coastal districts, during 2013-14. The new branches include a specialised personal banking branch in the city at Pandurangapuram and an exclusive branch for gold loans. For the gold loan branch, the bank is awaiting clearance from the RBI.................

Read - The Hindu

BRICs must realign their economies

.....In many ways, Brazil’s economic imbalance is similar to that of India’s. Both countries need to rebalance their economies from consumption to investment. The Reserve Bank of India has been struggling to combat inflation, despite high policy rates.  Although India’s investment rate is relatively higher at 35 per cent of GDP, growth in private corporate investment has fallen sharply over the past few quarters due to lack of policy reforms, supply-side bottlenecks and high interest rates........

Read- HBL

Diageo won’t rejig USL brass for 12 months

......The Reserve Bank of India (RBI) cleared Diageo's 27.4% stake buy in USL more than a week ago following earlier clearances from Competition Commission of India and market regulator SEBI. Integrating a strong USL executive team, which manages a local business larger than Diageo's global volume, and managing a portfolio of mass brands in a regulated industry are key challenges in the $2.1-billion takeover deal. ........

Read - TOI

Srei, Vakrangee Software get approval to set up ATMs

.....The RBI’s licence would allow Srei to set up 9,000 ATMs in rural pockets of the country, said Rajiv Aggarwal, Chief Executive Officer of Bharat Technical Solutions, a group company. Aggarwal says that Srei is well placed to roll out the service, thanks to the network of over 7,000 common service centres (which facilitate the delivery of e-governance services) established by one of its subsidiaries in rural parts of the country. Similarly, Vakrangee has been given the approval to set up a minimum of 5,000 ATMs per year........

Read - HBL

Indian Bank bags excellence award

Chennai-headquartered Indian Bank has been conferred with the National Excellence Award in Micro Enterprises lending by the Union Ministry of Micro, Small and Medium Enterprises for 2012........

Read - HBL

Bank told to pay consumer 1.15L for lost cheque

The Maharshtra State Consumer Disputes Redressal Commission has directed Dena Bank to pay Rs 1.15 lakh compensation to a Borivli man, Lalit Bothra, for losing his cheque and trying to absolve itself of blame. “Bothra was fighting out of his own pocket while the bank used public fund and harassed him,” the panel said, while directing the bank to pay an additional compensation of Rs 5,000..........

Read - TOI