Centre has decided to include Sebiand RBI among the nine agencies which will be authorized to accesss call data records (CDRs). Sources in the home ministry, which is finalizing the new norms for interception in concert with the department of telecom, said that the inclusion of the central bank and market regulator is meant to help them track economic offences, including insider trading and money laundering............
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.
Friday, June 14, 2013
India needs to restructure policies for trade with China: RBI study
India could gain from its economic engagement with China only if it restructures domestic and external policies and pursues a cautious approach to ensure that the country's long-term interests are preserved, according to a research study by the Reserve Bank of India. This is required to address the widening trade deficit of India with China and to ensure an effective partnership between the two neighbouring countries, RBI said in a project research study titled `India China Bilateral Trade Relationship' on its website.
Why central banks intervene in the currency market
...There are various motives of different central banks behind intervening in the currency market. For example, RBI has by and large stayed away from the currency market in the recent years and has allowed the rupee to find its own value in the marketplace depending on the host of market forces. However, it does intervene in the market to curb excess volatility. These interventions also help...........
Free slide
........ few days ago, the governor of the Reserve Bank of India, Duvvuri Subbarao, said that the central bank would let markets decide the rupee’s value, demolishing any expectations that the central bank would intervene in the currency markets. But on June 11, the central bank and the government announced some administrative measures to stem the rupee’s decline: exporters were told to bring their foreign exchange earnings into the country within a year, and the chief economic advisor, Raghuram Rajan, said that the government was considering raising limits on foreign direct investment in certain sectors. Will that be enough to restore faith in the rupee’s value?......
What’s Behind the Declining Rupee
.............Under these conditions, it looks unlikely that the R.B.I. will lower interest rates at its next meeting on Monday. The focus will be on ensuring stability in the foreign exchange market before taking further monetary policy action. The recent upgrade in India’s outlook by Fitch Ratings will be a comforting factor, and the R.B.I. will try hard to get the rupee in order before pursuing its goal of easing interest rates to take the economy forward.
Which set of numbers will determine Subbarao's stance on Monday
The Reserve Bank of India (RBI) will announce its mid-quarter review of monetary policy on June 17 amid a weakening rupee on one hand and falling headline inflation on the other. Here are factors that Subbarao will take into account for the policy decision:...........
RBI not likely to cut rates, eyes Indian rupee, CAD
A tumbling rupee and pressure on the CAD (current account deficit) are likely to prevent the RBI (Reserve Bank of India) from lowering policy rates on Monday despite softening inflation and decade-low economic growth. A policy hold would halt a cycle that has seen the central bank cut rates at each of its reviews in 2013...............
RBI could crash rates
For the first time in recent memory, the RBI may be emboldened to cut interest rates sharply. Nothing succeeds like success. The corollary is that, for interest rates to fall, nothing succeeds like failure on the growth front. The slowdown of the Indian economy in the last year is precipitous. We are now below 5 per cent from 10 per cent levels a few years back and if this continues, we would be staring at a recession in the next couple of quarters or shortly thereafter. What, one might well ask, is the cause?...........
It ain’t over yet
........Bank loans are usually classified as either performing or non-performing. If non-performing, lenders must build up reserves against potential losses. In 2008 the Reserve Bank of India (RBI), the supervisor, permitted the widespread use of an intermediate category of “restructured” loans. The terms of these loans had been watered down to help the borrower but banks could assume any difficulties were a blip and avoid building up provisions.
IPO scam: SAT asks NSDL to file reply by June 20
........A Sebi probe panel, headed by K Mohan Gopal and V Leeladhar, who was then the deputy governor of RBI, had found both NSDL and Bhave guilty of negligence and said that there should be accountability fixed in the case. But by that time, Bhave was heading the Sebi. Following this, Sebi board rejected its own committee findings on the matter........
FIIs' commitment to India remains strong: Nikhil Johri
........It is difficult to say if the worst is over for the rupee, because the fall was led not so much by local factors but global fears on QE. At least in this round the decline in the RUPEE is not very different from what we've seen in many other emerging market (EM) currencies. The Reserve Bank of India (RBI) is intervening. However, any direct intervention by the RBI in the forex market will be limited............
XLRI to host three-day Conference on 'financial inclusion'
............Aimed at deliberating on research and contemporary issues on ‘financial inclusion’, XLRI Jamshedpur will host academicians, practitioners and microfinance institutions from across the country at its 3-day international conference & competition to be held in September this year. According to the premier institute, both the events -2nd International Workshop on Inclusive Finance & National Level Competition Innovation (Impact), will be held on September 13-15, 2013 at the XLRI Jamshedpur campus................
Read.........
Sub-inspector suspended for submitting false report in court
.............The office premises of Rose Valley Corporation in Gardanibagh were raided on May 2. The cops also froze its accounts with a private bank on Boring Road. The raids were conducted at the offices of 15 non-banking companies in Bihar after getting confirmation from Securities and Exchange Board of India ( SEBI) and Reserve Bank of India (RBI) that they were non-banking financial institutions without licence................
Gold continues to glitter for customers, banks
The Government and the RBI may have gone hoarse asking people not to buy gold. But the yellow metal holds a fatal fascination for Indians. Be it coins/bars or jewellery, people continue to invest in gold, say bankers and jewellers. This is mainly because the precious metal is seen as the most liquid asset. From gold coins that weigh just 2 gm to bars of 50 gm, some public sector banks sold more than a tonne of gold last fiscal. Now, with the Finance Minister suggesting that banks keep off selling gold coins, some banks are disappointed with a source of income shut.........
'Stop buying gold!' Chidambaram begs gold-crazy Indians
........."You give rupees, we have to provide dollars. You think you buy gold in rupees but actually you buy gold in dollars. I would once again appeal to everyone, please resist the temptation to buy gold,"...............
Stop buying gold, says FM; unapologetic that savers have so few options
...........The trouble is that the FM is brushing major problems that savers have with other financial products. Bank savings accounts and fixed deposits are the commonest options for intelligent savers, but there are hindrances in Know-Your-Customer rules’ implementation by the banks at entry level. By the time the saver learns a little more, the quality of customer service leaves much to be desired...........
Delay in draft payment costs Central Bank Rs.10,000
....."It has not been shown to us that any particular time limit is fixed for deposit of a demand draft and its payment and we have also not been informed if there are any guidelines of the Reserve Bank of India about the time limit. We are, therefore, left on our own to determine as to what is reasonable and proper time which should elapse before a demand draft is honoured for payment after presentation,"......
US top target for phishing attacks; India ranks fourth
...Of late, the attackers also changed their modus operandi. They now target high net worth individuals and high online spenders by sending specific mails, rather than the earlier practice of mass mails. Another trend is using the names of governmental organisations such as the Income-Tax Department and even the Reserve Bank of India...........
Nigerian held in ‘black dollar scam’
.........Rupavathi, a post-graduate student, received an e-mail on May 24 saying that she had won an annual prize of 1 million pounds. She paid Rs.21,000 into an SBI account as directed by the fraudsters. Within hours, she received another mail from the ‘RBI’ saying that she was the lucky winner of 1 million pounds and directed her to pay Rs.2.31 lakh towards the ‘cost of transfer of the prize money’..........
SBI alters how it sanctions credit to avoid bad debt
......Acknowledging that there had been a “sharp increase in non-performing assets (NPAs) in the first three quarters of the year, which abated only in the fourth quarter”, Chaudhuri told the bank’s shareholders that a major reason for the high bad debt accumulation was the slowdown in economic growth and other macroeconomic factors. He added that the bank’s credit policy also needed to be rearranged. The committee was formed to “analyse and address the reasons for relatively higher NPAs in comparison to the other banks”, and to know the “reasons for our relatively low share in better performing business segments”. It has different subcommittees that comprise heads of all business groups and segments. The main committee held 17 meeting throughout the year, while the subcommittees met frequently, the annual report said.........
Foreign Banks In A Tight Spot Over EU Trading Norms
.............The issue has now come to a boil given the initial reluctance shown by the Reserve Bank of India (RBI) and the country’s CCP –- the Clearing Corporation of India Ltd (CCIL) -– to fall in line with ESMA’s (a third party) wishes. ISDA officials met with RBI and CCIL officials on 11 and 12 March, but those in the know of these meetings, nothing conclusive was arrived it. Foreign banks have also approached the RBI to seek an early resolution, but senior officials at these banks admitted the matter has taken diplomatic overtones..................
Staff benefit costs may delay merger of associate banks with SBI
.....“Cost, expenses and employee perquisites are different and we need to bring them on equal footing (with SBI). For instance, there are three terminal benefits in SBI as compared to two in case of associate banks. Capital will be required to create a corpus,”..........
Planning for Retirement? NPS May be Worth a Second Look
........However, the grand retirement scheme is not without its share of limitations. The key one, of course, is the cap
on maximum exposure that you can take in equities, which stands at 50%.
Now, if you are a young professional willing to stomach risks and stay
invested for the long term, financial planners recommend a high equity
exposure of 60-70%. Such investors may not find NPS’ proposition
appealing. This apart, remember, if you need funds during a crisis, you
cannot tap into your entire NPS corpus.............
Read - ET
Thursday, June 13, 2013
The mechanics of money - Dr.D.Subbarao
...........It is not that as Governor I don’t get the time to read. I do. But the time that I get is irregular – not the most conducive for book reading. I keep telling myself that I must read for at least half an hour every day, but have failed so far. So, when I finish reading a book, it feels like a big accomplishment. It’s also comforting because I am at least trying to live up to the hype that the RBI Governor is a well-read person.................
To fix whistleblower, bank moves from verse to worse
............The real reasons for going after Mr. Tuljapurkar appear to have little to do with poetry and seem far more prosaic. He has been a thorn in the flesh of his management. Both, as an alert employee and, for a while, as Workman Director on the bank’s Board. He has also drawn the RBI’s attention to the BoM’s odd handling of some corporate accounts and advances which, he charges, are being favoured at the expense of BoM’s main depositors — lakhs of small farmers, working people and retired employees. But the BoM leadership has something more against him. They suspect him — with no basis or proof — of being the whistleblower behind a story in The Hindu, July 7, 2012. That story exposed how the bank had granted a Rs. 150-crore loan to a defaulter owing BoM Rs. 40 crore by greatly weakening the terms of the original sanction letter. The defaulter company was a part of the United Breweries (UB) group headed by Vijay Mallya. The expose embarrassed Bank Chairman and Managing Director (CMD) Narendra Singh, sparking a whistleblower witch-hunt...........
India’s Small-Change Problem
.......Data from the RBI’s latest annual report in 2012 show the total supply of small coins, those of less than one rupee denomination, fell sharply to under 15 billion pieces by the end of March 2012 from about 55 billion in 2011. The reason for the drastic decrease was a decision to withdraw the 25 paise piece (worth a quarter of a rupee) from circulation. However, there wasn’t a corresponding increase in coins of one rupee denomination............
Illegal withdrawals at ATM centres: People are losing money again!
.....“Prima facie, it appears that unsuspecting customers across several banks have fallen prey to a skimming attack by fraudsters. As it involves more than one bank, it would only be fair if we comment further only once we have ascertained the facts. We would like to state that our system is secure and this matter has nothing to do with the recent system upgrade,” ........
Recruitment to the post of Officers in Gr ‘B’ (General)-DR
Reserve Bank of India (RBI) has published the recruitment notification for 98 vacancies for the Post of Officer Grade-B (General)............
Read.......
Medical camp for retirees at Pune
Marsh India Ltd arranged a free
medical checkup camp in Pune for three days from June 10-12, 2013. It was
conducted at College of Agricultural Banking and at SRL laboratory during the period. Around 120 ex-employees
took the benefit of the medical tests
consisting of blood sugar, lipid profile, ECG, basic Eye check up, BP and BMI.
The participants were very happy with the arrangements and extended their
thanks to organizers and also the administration of CAB. The Local Retired
Employees Association coordinated with Marsh India Ltd for smooth conduct of
the medical tests. The Association Secretary thanked the Principal, Vice
Principal and AGM (Admn) for allowing the use of premises for the purpose. He
also thanked the team of Marsh India and specifically Rachana Oberoi conducting
medical camp in Pune for retirees and staff of SR laboratory for efficient and
excellent arrangements and courteous behaviour. S/Shri S D Datar, president, L
V Kulkarni Secretary of the Association, S R Kolhatkar, P W Nirkhe, S D Purohit and Y P Varadkar took lot of
efforts for successful conduct of the camp. Shri A P Kale was of great help in
arranging the event.
- S D Purohit
RETIREMENT SAVINGS
.....Get a glimpse of the future of your income and expenses. Know the complete story of your post-retirement financial situation. Get to know how much you really need...............
Punjab aims to be first to launch public treasury site
....."We have written a letter to the Reserve Bank of India seeking its permission to authorise the banks for the services. We hope to receive the permission very soon and the portal will likely be operational by next month. Once operational, the contractors' or vendors' payments would be directly credited to their account, bringing transparency in the system."......
Finance ministry to seek Cabinet nod for all-women bank
............, the proposed bank will lend mostly to women and women-run businesses, provide support to women Self Help Groups (SHGs) and their livelihood. Moreover, it will employ predominately women, which addresses the gender-related issues and empowerment and financial inclusion. However, it will take deposits from both men and women. Earlier, a committee headed by headed by former Canara Bank chairman MBN Rao and comprising of bankers and other experts had prepared a blueprint for the all-women bank.
Wake up call: UCBs falling prey to mafias
...............The most worrying thing is the unscrupulous politicians have cynically used cooperative banks located in the country’s largest state UP for making thousands of crore of their black money white. According to the CBI information, most of laundering is done through fictitious accounts. Sources say the massive amount of black money thus made white by politicians could easily be used for subverting democratic norms and processes in the country. What passes comprehension is the RBI’s refusal to share information on grounds of confidentiality. But HT feels information on cases of fraud or violation of the guidelines by banks could be shared as intelligence inputs. Sources say the RBI is subject to the accusation that it has been rather slow in taking action even when it had enough information on the erring banks.................
Co-operative banks look to ramp up their technology
..........The co-operative banking sector has been a great tool for the average Indian since a very long time. Highly customizable operations, great familiarity with the clients, low technological usage and an old school working environment have characterized the sector ever since it came into existence, and this is precisely the image that an individual would carry about it. The image though is completely obsolete, and one needs to understand that the concept of changing with time does indeed apply to the banking sector. But the people cannot be entirely blamed for their perception, irrespective of the lack of information about the subject, as the banking system in India has always been late to respond to progressive changes.......
Forty-five cooperative banks may face regulatory action
.....“Most of these banks are struggling to raise funds due to multiple constraints, including a lack of support from respective state governments and their poor managements,” said Prakash Bakshi, chairman, National Bank for Agriculture and Rural development (Nabard). “Since these banks have been given several extensions to achieve the required capital, there is a possibility that there will be strict action on these banks, including barring them from operating further if they fail to achieve the required capital,” Bakshi said. Nabard is the nodal agency to regulate cooperative banks and regional rural banks. Though RBI is unlikely to shut these banks at once, it may bar them from raising fresh deposits and giving loans............
Ticket booking through cells soon
.....According to sources, the Railway Board has approved the scheme and the RBI has given mandatory clearance to it. According to a Board official, railways has made a slight modification in the newly-developed software to check misuse of the scheme. Railways intends to make this scheme simple for cellphone users. A customer is required to download the application to book his journey ticket through cellphone,..............
Bank loans to minorities at all-time low
.......Despite all scheduled commercial banks being served a master circular by the Reserve Bank of India (RBI) last July, instructing them to boost PSL to minority communities based on the PM's 15-Point Programme for Welfare of Minorities, they have failed to comply. The SLBC report admits that banks were 'advised to ensure that lending to minority communities be given a thrust and banks should aim at achieving 15%of their priority sector lending to minority communities', It pegs its target achievement at a meagre 6.4 per cent............
Waiting for Fed to talk up sentiment
........For the RBI, it's a Hobson's choice. The slowing IIP may offer a compelling case for cutting interest rates. But with the rupee still hovering close to its all-time low, and consumer inflation not showing any substantive reduction, pruning interest rates could turn out to be counter productive.............
RBI plans to revive stressed loan market for banks, ARCs
The Reserve Bank of India (RBI) is planning to add momentum to the lacklustre stress loan sales market wherein banks dispose off their non-performing loans to the asset reconstruction companies (ARCs). Recently, Usha Thorat (former RBI dy governor), the director of the Centre for Advanced Financial Research and Learning (Cafral), a non-profit organization funded by RBI, has held a meeting with banks, ARCs and rating agencies in this regard, two people familiar with the development told ............
Murky macroeconomy
......The monetary policy scenario has become significantly more complex as a result of the sharp rupee depreciation in a short period of time. This will slow, if not reverse, the downward trend in inflation over the next few months. Further, in the absence of a rapid increase in capital inflows - for which there are no obvious triggers, either external or domestic - the likelihood is that the rupee will continue to lose value, intensifying inflationary pressures even more.......
Let the Banks Take Due Care
The
RBI has done well to pull up Axis Bank, HDFC and ICICI Bank for
violating KYC norms and anti-money laundering laws. The penalty imposed
should be an eye-opener for other banks. But personal responsibility
should have been fixed to recover at least some portion of the penalty
from officers. If the violations continue, the government must take
steps to nationalise these banks.
- KV SEETHARAMAIAH, Hassan (ET)
- KV SEETHARAMAIAH, Hassan (ET)
Steps to check gold imports showing results, says Mayaram
...the high current account deficit (CAD) is still a concern for the government, but the recent steps to check gold demand have started having an impact. The ministry last week raised the customs duty on gold to 8% while the RBI has put restrictions on banks on importing gold.......
Will RBI spoil the bond party?
.....Now, all the eyes are on the mid-quarter review of monetary policy, which is scheduled for Monday. The bond street fears that RBI might play a spoilsport by not cutting the repo rate further. According to treasury officials of banks, this would lead to yields rising and the treasury portfolio of banks will be left bleeding.......
Rupee slide, no surprise
............RBI Governor D Subbarao has rightly expressed his helplessness, given the central bank has not been targeting that a specific exchange rate. The foreign currency reserves at the disposal of the RBI are limited, and are in any case, too precious to be spent on changing the direction of the market.............
Is the worst over for rupee?
........."What we are seeing on the rupee today is primarily on account of global developments and not so much due to domestic issues. The currency will correct itself as soon as our fundamentals are very strong, and the economy is on the right track. We are seeing green shoots of growth and inflation is coming down," ........
Rupee struggles, officials waffle, markets fret
.......The RBI late on Tuesday also asked exporters at special economic zones to realise their dollar earnings and get them back into the country within one year in a bid to increase the supply of dollars in the market. The central bank also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000. "The government talking up the rupee has had an impact on the sentiment.............
RBI may still go in for 25 bps cut on Jun 17: Indranil Pan
......"Our main point is that the RBI needs to maintain a relatively linear trend in terms of interest rates momentum and that is the only hope that it has in this current scenario to provide some transmission given the fact that the currency dynamics does not allow it any space to provide liquidity in this system," ..........
Weakening rupee may delay rate cutting cycles, says Nomura
........Nomura expects that so long as the currency is weakening, the RBI will delay the rate-cutting cycle because financial stability concerns will overrule its business cycle response. It believes that repo rate is likely to be unchanged in June, with rate cuts resuming after the currency stabilizes and inflation and CAD are brought to moderate levels.
Economy not strong, RBI intervened to stem rupee fall: Ahluwalia
Giving teeth to the serious fraud office
.........Despite the tough remit set for the SFIO and the complex nature of the cases handled by it, the functioning of this non-statutory body is hemmed in on many sides. Its powers are largely restricted to examination of documents and it does not have the powers of search, seizure and arrest. The SFIO also operates within an elaborate matrix of investigating bodies with overlapping authority over such cases; the CBI, the Central Economic Intelligence Bureau, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) being some of the other bodies which have also been granted investigative roles and powers............
The miracle of India’s negative growth
.......Obviously, this miraculous decline is man-made and the result of several factors/policies. Two prominent determinants of the negative miracle are the operation of policies by two esteemed institutions — the monetary authority, RBI, and the governance authority, the CAG. By my calculations, each of them has contributed an equal (presumptive?) loss to the Indian economy — at least 1 per cent of GDP for each of the two years, or around Rs 1.75 lakh crore each. How can such an assessment be made?.............
Kolkata: State govt to seek RBI, Sebi help to track scamsters
The state government will seek the help of the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) to add more muscle to the economic offence wing (EOW) and cyber crime cells (CCCs) of the state police, Kolkata Police and the different police commissionerates. The decision comes in the wake of the meltdown of the tainted Saradha Group and host of other chit fund concerns and shady operators dealing in ponzi schemes. Sources in the state finance department said though the move had been initiated in the wake of the chit fund bust, the decision to strengthen the two agencies dealing has been fuelled by two objectives..........
Banks will not cut rates if central bank maintains status quo
.......According to SBI chairman Pratip Chaudhuri, it's the CRR cut - rather than a cut in repo rate - that helps banks to pass on the rate cuts. Other bankers also echoed this view, citing high deposit rates as a restraining factor for them to reduce rates.......
Read | Business Standard
Economic gloom worrisome: SBI chairman
........... “Optimism is always good, I would share the optimism. But from time to time, we should do a realty check, whether the optimism is correct................
Higher provisioning dragged PSBs profitability: Microsec
......On the NBFC front, We believe, the Housing and Automobile finance NBFCs themselves may see revival if interest rates decline further. However, with an expectation of economic recovery is in near term, NBFCs are all set for a strong growth in the coming years. We also expect that new draft guidelines on NBFCs proposed by the Reserve Bank of India (RBI) in December 2012 (based on the Usha Thorat Committee Report) will strengthen the NBFC sector fundamentally in the long-term............
Only 8% of gross bank credit of all scheduled commercial banks go rural areas
........Surprisingly, Maharashtra, which accounts for more than one-fourth of gross credit by banks in the country, has one of the lowest share of rural credit to total credit. The gross bank credit by banks in Maharashtra as on September 2012 was Rs 1,410,952 crore, which is about 29% of India’s gross credit. However, the share of rural credit in the whooping Rs 1,410,952 crore given by banks in the state, was just 2% each at Rs 28,998 crore.........
Wednesday, June 12, 2013
KSK: Gentleman-economist - A.Seshan
News of the death of K S Krishnaswamy, the former Deputy Governor of the Reserve Bank of India (RBI), took my mind back to April 9, 1956 when I joined the central bank's Department of Research and Statistics as an economic assistant. I was posted to be KSK's assistant, who was then a deputy director in the division of rural economics................
RBI Governor is Wrong on Regulating Risk
.........The
global consensus is that microprudential and systemic risk work should
not be within the same organisation. Hence, there are good reasons why
the RBI should not be the primary systemic risk management agency: (a)
RBI would do microprudential regulation
for banking and payments, and (b) RBI is a sectoral regulator for these
two sectors and would generally favour them. Under the FSLRC proposal,
FSDC does no microprudential regulation, and looks at the full financial
system without sectoral biases................
RBI's actions not fine
............with just 1% of the system alerts thrown up in the sample banks RBI inspected getting reported to the tax authorities, there are yawning gaps in RBI’s inspection system. As for the cooperative banks link that RBI found was a systemic risk—“these banks may be an easier conduit for facilitating substantial amounts of cash in entering the banking system”—it remains true there is nothing that specifically bans this, though it is surprising that the private banks allowed such large sums of cash to be deposited without any alerts getting triggered. With the fines now out of the way, hopefully RBI will put in place a more stringent system to ensure such transactions don’t continue to take place. ...........
Lead Bank of Raichur district launches Credit Plan for 2013-14
..............V. Shrinivas, Assistant General Manager, RBI, RCPD Bangalore, congratulated the bank for its achievements in the previous year. “Without cooperation and coordination with the government departments, no bank can achieve much. All banks in the district should continue to maintain good coordination with the government departments,” he said.
RBI Throws Some Light on New Banking Licences
...........Let’s try and extrapolate a few of the key messages here, with the
benefit of the clarity provided by the RBI in its 165-page document;
each question being quoted and bucketed broadly on themes of ownership,
operating model, business transition and others. The answers are
repetitive, but intelligently so. It’s an assertion of the authority of
the central bank to formulate policies and guidelines and not deviate
from the principles post event, the essential function of a
clarificatory note being to clarify and not to introduce policy change.................
RBI norms may hit cooperative banks
...In addition to the deadline for capital adequacy, the RBI had insisted that the cooperative banks should adopt core banking system, be part of the special business process for retail payments set up by the National Payments Corporation of India, and Real Time Gross Settlement system by September 30. Crossing the first hurdle itself would be quite challenging for the cooperatives,...............
India Inc's excessive reliance on forex borrowing risky: RBI
The Reserve Bank of India (RBI) said that excessive reliance on foreign currency funds could pose balance sheet risk for Indian companies when there are fluctuation in the currency markets. "Heightened volatility makes the debt rollovers difficult or at high interest rates," said RBI's deputy governor H R Khan, who was speaking at the Bankers' Club at Thiruvananthapuram yesterday. A copy of Khan's presentation was uploaded in RBI website today.........
RBI says too early to conclude reversal in asset quality deterioration trend
..............."Recent trends in the asset quality of the banking system have been somewhat disquieting. In 2012-13, the gross non-performing assets of banks increased by 31.8% while restructured standard advances increased by over 40%," HR Khan, deputy governor of RBI, said in his presentation at a function in Thiruvananthapuram on Monday...................
RBI takes steps to bring back export proceeds
...........With an aim to arrest Indian rupee slide by boosting forex inflows, RBI on Tuesday raised the limit for online repatriation of export proceeds by over three-fold to $10,000 and made it mandatory for units in Special Economic Zones to repatriate full value of exports within 12 months. The announcements come at a time the rupee has touched life time low of 58.98 against the US dollar. It has depreciated by 3.5 per cent against dollar in the last two days and by over 8 percent since April 30..............
Read - Business Today
No new steps likely to curb imports: FinMin
.......“Going forward, the government will undertake measures to ensure that CAD is safely financed,” he said. Worried over huge gold demand that is impacting CAD, the government hiked the customs duty to 8 per cent, while RBI has put restrictions on banks to import gold..........
New hot money: Govt is paying a price for its debt fetish
..... The market is used by hedge funds and foreign institutional investors to hedge against currency volatility. For the rupee, the key non-deliverable forwards market functions in Hong Kong, London and Singapore. The RBI has not recognised this market and, according to the ET report, refuses to openly acknowledge the impact of this market on the rupee.......
Revving up the growth engine through financial inclusion - K C Chakrabarty
......While there is greater awareness among policy makers and financial sector participants about the importance of prioritising the goal of universal financial access, there is a need to ensure that progress on the ground is in line with these expectations. The opening of bank accounts is only the first stage and the focus now is not just on improving access but also on better use of the financial infrastructure............
Early monsoon may provide comfort to Reserve Bank
........“For RBI, this year’s monsoons again will be a crucial variable in calibrating monetary policy, as they will have implications for both inflation and growth. Although the central bank’s guidance remains cautious, we believe the flow of macroeconomic data, continued downside surprises in inflation, a more benign current account and weak growth indicators, has created room for larger monetary easing in the coming months,” said Rahul Bajoria and Siddhartha Sanyal of Barclays Capital.............
Gold Fever
India’s mania for the yellow metal is turning us into beggars with the rupee hitting a new low
.....India’s
gold mania – without the give-and-take of gold jewellery no Indian
wedding is considered auspicious – is literally beggaring us. If all the
gold lying idle in the country were to be converted into funds for
industrial and business growth, the flagging economy would revive almost
overnight.............
No lower EMIs?
The fall in the value of the rupee has weakened the chances of your home loan EMIs coming down. How? Because Reserve Bank of India Governor D Subbarao may be unwilling to cut interest rates, as the fall in the rupee will fan inflation by knocking up prices of oil and other imported items...........
Losing its value
............Despite the Clean Note Policy of the Reserve Bank of India (RBI) and the Banking Regulation Act restricting people from any sort of writing on the watermark window of currency notes, many continue to write and disfigure the currency notes because of lack of awareness. Under the RBI guidelines, any sort of writing or inscription on the watermark window of currency notes is a punishable offence under Section 35 A of the Banking Regulation Act 1949; something common citizens seem unaware of. ............
Got fake currency from ATM?
Cases of getting fake currency notes are coming from across the country. This is an alarming situation for the banking system. Getting counterfeit currency notes from ATMs shows the strong flow of fake notes in the economy. This surge finally incurs loss to the common man who brings out money from ATMs. Banks do not take the responsibility of such fake currency dispenses through ATM until concrete evidence is available. Since, it’s very difficult to prove the source of fake notes, so, at last the person gets nothing even after a complaint..................
RBI's hidden hand brings Indian rupee off record low
.............."Finally the central bank stepped in. The selling was not huge but enough to cause a rebound in the rupee," said a senior dealer with a state-run bank, who declined to be identified given the sensitivity of the matter.............
A long view of the rupee
.......there appears to have been some reluctance on the part of the Reserve Bank of India (RBI) to retrench a part of its foreign exchange reserves to stall the rupee’s depreciation. Left to itself the economic situation seemed to warrant depreciation of the rupee, and even moderately good capital inflows did not help to stall that decline. Thus, a fundamental weakness in India’s balance of payments seems more important than inflows and outflows of foreign capital in influencing the course of the rupee............
In Young India, Re Now Almost a Senior Citizen
All
the king’s men stepped out on Tuesday to prop up a battered rupee and
deal a blow to currency speculators. As the rupee plunged to a new low,
the government’s Chief Economic Advisor, Raghuram Rajan, said India is
planning to float either sovereign or non-resident bonds as well as
liberalise rules on foreign direct and portfolio investments..............
Read - ET
Read - ET
Government to take 'warranted' steps to stop rupee fall: Raghuram Rajan
...."We will continue to implement measures to ensure that portfolio investor inflows are enabled and encouraged and some of these measures will be announced very shortly. "In the coming weeks, we will recommend to the Cabinet policies to enhance FDI limits on number of areas all this will help not just in short-term objective of financing the CAD safely but also in the longer term objective of ensuring sustainable growth,"........
Arrest That Fall
.............But
the RBI must desist from intervening to prop up the rupee. The falling
rupee is emblematic of our economy’s troubles where dollar payments
exceed dollar inflows, growth has slowed and inflation grown. Further
depreciation may lie ahead. First, this could work in India’s favour,
helping correct trade imbalances by making.............
Sinking rupee, failing economy
..........Also, the RBI would find it hard to reduce the policy rate when it announces its mid- quarter review next week. Currency depreciation has made it hard for it to cut rates because it would make capital inflows further unattractive and would further add to inflationary pressures. The government is trapped in a cul- de- sac. It cannot clamp down on imports for fear of further slowing down the economy and violating multilateral trade agreements. It cannot absorb the higher costs of..........
Dare we think capital controls to save the rupee?
.........So rather than wait for the rupee to fall even more precipitously or even gyrate like the Japanese yen, the government must step in and do something no government would like to do: impose capital controls.............
The rupee responses Why?
......The Govt has failed to take appropriate and timely measures to contain the import bill by containing the demand for gold when it was reaching the peak, improving the supply of coal by augmenting the production of quality coal domestically, creating an atmosphere to attract flow of funds from abroad by its taxation and ease of doing business through better administration and governance,..............
Read the views expressed by Dr.T.V.Gopalakrishnan
Read the views expressed by Dr.T.V.Gopalakrishnan
Does RBI lack firepower to defend Indian Rupee
......A few billion Dollars in sustained intervention is warranted if RBI's efforts have to bear fruit in a meaningful sense. A few billion! But given the current state of affairs, RBI could only shell out only some $500 million. This cannot sway the markets beyond a point to the advantage of Rupee. In other words, RBI lacks the firepower to intervene in FX markets as of now..........
Rupee reaches record low, but here’s why govt is not worried
......The ministry’s chief economic adviser, Raghuram Rajan, said authorities, including the RBI, the SEBI and government, were ready to act if needed to stop a runaway currency market. Rajan argued that the extent of the rupee’s slide had taken it into undervalued territory. On a trade-weighted basis, however, the rupee is fairly valued to slightly over-valued. In real effective exchange rate (REER) terms, the rupee was at 105.74 in May against six of its key trading partners, above the 100 that denotes fair value.........
'EVM cards are more secure than magnetic strip cards'
.........Credit/ debit card skimming is financial industry's one of the major concerns and often results in forms of identity theft, credit card fraud or bank fraud. The magnetic stripe credit and debit cards store user's financial data in static format. This data is vulnerable to be copied during offline transactions by skimming devices, which can be used to create a clone card and make unauthorized offline transactions...................
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