.......In an indication that this trend is not restricted only to one particular bank, the Reserve Bank of India too has reported a 13.4 per cent rise in deposit growth at Rs 62,000 crore year on year on 31, which is largely in line with its 14 per cent growth target in the segment for the whole fiscal...........
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Monday, June 17, 2013
If RBI can't cut CRR, let them pay us interest on it: SBI
............."If a CRR cut cannot be done due to inflation worries, let the RBI pay us interest on CRR. We will then do the transmission for sure. If the RBI pays me Rs 500 crore on interest on my CRR, I promise to transmit the entire Rs 500 crore to borrowers by reducing my base rate,".............
SBI & conflict of interest
....... Managers in charge at SBI Caps must be evaluated on the outcome of the projects they got the bank to finance and not just on fees earned or league table standing. This is a matter of serious conflict of interest that needs to be addressed.
SBI credit card firm asked to pay Rs 12K for deficient service
A consumer forum has directed SBI Card and Payment Services Ltd to pay Rs 12,000 as compensation to a customer for putting her name in CIBIL's defaulters list despite an assurance that the annual fees of her credit card would be free for lifetime...........
KYC laxity at private banks has put us to loss: SBI
In the wake of the Cobrapost expose on violation of know your customer (KYC) norms by almost all banks, State Bank of India chairman Pratip Chaudhuri has said his bank has been “put to a loss” by the non-compliance of guidelines by private sector peers. “Our bank has been put to a loss because of the relatively lax implementation of the KYC norms, particularly in private banks,”..........
New banks to herald next growth phase for existing ones: Kotak
..............Talking about the potential entry of new banks, Kotak said in his annual letter to the shareholders that the Indian financial space was likely to see new banks in the next two years. "How will they affect us (Kotak Mahindra Bank)? They will increase the pace of competition for talent and customers," he said. He added: "However, going by our experience of the last 10 years, banking, particularly on the retail side, is much more long-haul than we expected when we began our journey...........
Rupee fall, a problem from within?
.....The RBI Governor, D. Subbarao, has been frank enough to admit that any intervention that does not pack the desired punch might backfire. And the biggest limitation for the RBI has been the size of the external reserves, which has been coming down. That, in turn, reduces the quantum of ammunition in the hands of the RBI. Government spokespersons are right in saying there is no need for panic. But it is all too evident that there is no magic wand to wave the marauding dollar away........
Welcome relief, but...
..........These two factors clearly influence the balance between inflation risks and growth payoffs in the current scenario. Under the circumstances, the RBI's decision is certainly not a no-brainer. Even before the rupee began its decline, the RBI governor had said he saw limited room for easing, which has now been further constrained. The question facing the RBI is whether whatever room remains now should be used up as soon as possible, or preserved for a shift in the risk-payoff balance.........
Fall in inflation adds to RBI's dilemma
.........“The rupee’s sharp depreciation since May has clearly made a case for no rate cut. But, since the inflation rate has fallen, RBI will have to take cognizance of that and deliberate if a rate cut is still possible,”.............
Subbarao should wait for Bernanke
...........The outcome of the next Federal Open Market Committee meeting will be announced on Wednesday and any change in its monetary stance, however finely worded, could have significant repercussions on interest rates, currencies and fund flows. Markets around the world are collectively holding their breath, waiting for Bernanke’s clarifications about any tapering of the bond-buying programme. It makes a lot of sense for the RBI to wait, too.
Rupee fall could sway RBI’s rate call
The rupee is likely to be a joker in the pack in the Reserve Bank of India’s mid-quarter monetary policy review announcement on Monday. If the RBI focuses on the upside risk to inflation from the eight per cent depreciation of the rupee against the US dollar, then it might hold off on cutting repo rate on Monday. The central bank may maintain status quo on policy rates in order to assess the exchange rate trajectory and the pass through to prices in a sluggish economy............
Subbarao needs to do a Paul Volcker and raise rates
.....If Subbarao had actually raised rates a few years back when the signs of out-of-control government expenditures were obvious, our growth today would have been higher and consumer price increases lower. Those conditions are still valid today – if Subbarao doesn’t increase the rates on 17 June then the 5 percent GDP growth that we are seeing today would be the ceiling and not the floor, as the government would like us to believe. The near double-digit consumer price increases would be the floor...............
RBI May Hold Rates, Await Clarity on Global Signals
....When
domestic prices and government finances are appearing to be aligning to
facilitate a series of interest rate cuts, the turn in global liquidity
tide, fearing the end of cheap money, has put a spoke in the works.
“Looking at currency depreciation and the global situation, we do not
expect RBI to cut rates,” ...........
RBI likely to press pause button on rate cuts, but may act later
....Should RBI then cut banks’ cash reserve ratio (CRR), or the portion of deposits that commercial banks are required to keep with the central bank, to make monetary transmission effective? Bankers have been strongly pushing for a cut in CRR. This, they say, will enable them to bring down their loan rates. But this, too, is unlikely to happen for two reasons. First, ...........
Volatility is the new normal
..........The Reserve Bank of India’s intervention in such scenarios can only be viewed as an attempt to soothe sentiment and keep speculative activity at bay. It is unlikely to fix the core structural issues that need to be addressed, such as:..............
To Lower NPAs, Buy Defaulters’ Assets, Finmin Tells PSBs
......,
“If you get bids, sell it, but if you get bids less than your reserve
price, don’t sell. Simply transfer it to your assets and reduce your
NPAs. The market is down now, but when it looks up, one should sell.” ...........
Private banks score over public sector peers in 2012-13
....While SBI and nationalised banks (NBs) constitute public sector banks (PSBs), private banks comprise new and old private sector banks. Amongst these banks, PSBs had a market share of around 80 per cent and private banks 20 per cent as on March 2013. Within PSBs, SBI has the largest market share of 19.1 per cent, and the balance 20 NBs account for 60.6 per cent. The NPBs (new private banks) and OPBs (old private banks) account for 15.8 per cent and 4.5 per cent of the market share respectively. The various categories of banks differ in their ownership structure, business philosophy, geographical presence, customer base, technology adoption, manpower profile and governance practices.....
When CAD is so bad, we should just ban gold imports
When your hair and bones start thinning, it is a grim reminder that the inexorable process of ageing has started. You cannot do much about it. But when a country, over the years, suffers from current account deficit (CAD), its currency would get badly mauled. Unlike with ageing, however, one need not resign oneself fatalistically to the inevitable with exchange rates because erosion therein can be halted with some ad hoc and unconventional measures that could raise eyebrows and hackles alike.......
When the Tsunami ebbs
........The dollar has zoomed versus the rupee. That brings the current account deficit (CAD) to centre stage. The Reserve Bank of India (RBI) intervened at least once. It cannot afford to intervene on a regular basis since it must protect its reserves. It is, therefore, extremely likely that the rupee will fall further if FII selling continues, or gains in volumes. Fears of an exploding CAD, and an associated bloat in the fiscal deficit, would be among the key variables D Subbarao considers before announcing the credit policy. The central bank's actions would be primarily designed to stabilise the rupee, rather than to enable growth, or control inflation. Inflation is falling anyway if the latest consumer price index and wholesale price index data are believed. Growth has also picked up a bit, if the index of industrial production is credible............
Top five private banks step up hiring
Leading private sector lenders are in top gear when it comes to expanding their headcount and just five of them, including ICICI Bank and HDFC Bank, added more than 15,000 employees to their payrolls in the last fiscal, reports PTI. The expanded workforce also seems to be giving them rich dividends in terms of improvements in their employee productivity, shows an analysis of the annual staff details of ICICI Bank, HDFC Bank, Axis Bank, es Bank and Kotak Mahindra Bank......
The cumulative costs of India’s debt wish
......The easy monetary conditions across the globe lulled Indian policymakers into making it easier for Indian borrowers to gorge on foreign debt. Then the gaping current account deficit led them to successively increase foreign investment limits in rupee debt since the end of 2011. The market for government bonds was also opened up. The limit for foreign institutional investors to invest in government bonds was raised again on Wednesday. These could prove to be costly mistakes, because they could put economic stability at risk in case there is a wave of global risk aversion........
Nandan Nilekani's Aadhaar project faces fight from a team of Europay, Mastercard & Visa
........But, if the group, constituted by the Reserve Bank of India, prefers Aadhaar, banks will have to change their systems, procure biometric machines and prepare for different security standards. Bankers, however, are reluctant to spell out their stand openly because the government thinks Aadhaar can be a game changer in disbursing subsidies to people in far-flung regions..............
As wire ends & wireless begins, banks tango with telecoms
Financial services are sparse in India’s hinterland; and for those living in far-flung villages, accessing them often means a weary trudge to the taluk. But telecom outlets dot the dusty roads, even in the remotest villages. With a vast infrastructure and a big catchment of users, mobile firms are looking to offer some of the services, if not all, as they hope to move money from a huge cash economy into the banking system.........
Times Group enters education biz with TimesPro
........TimesPro's flagship program - a post-graduate Diploma in Banking Management - will be launched later this month. It will churn out young professionals to meet the huge demand in the banking industry created by the influx of private banks in the next few years due to the amendments made by the Reserve Bank of India.
Having right people on the board is critical to the bank's success: Surrinder Kapur
........The board members have years and years of experience in their respective fields. RBI (Reserve Bank of India) has always said only eminent people should be considered for the board. What I understood from my meetings with the RBI governor was the central bank wanted board members who would represent a specific sector and guide the bank in providing financial services to that sector................
Saturday, June 15, 2013
RBI can’t monitor hedges
.................It is in this context that RBI said that it was up to commercial banks to ensure their clients were hedging their positions. SBI chairman Pratip Chaudhuri’s position that this is the central bank’s responsibility misses the point. While Chaudhuri says RBI should ask companies to put in place proper hedges when it sanctions foreign currency borrowings, it is the commercial banks who monitor the corporates on a daily basis and who are, therefore, in the best position to ensure the hedges are in place. In any case, if the companies don’t hedge their positions, it is the commercial bank loans that are in danger of going bad. Indeed, it is surprising that RBI needed to even make this statement and ask bankers not to give additional limits to firms if forex hedges were not place...............
Bank of Maharashtra union calls strike over victimisation of whistleblower
..........The issue of victimisation of a whistleblower by the management of Bank of Maharashtra (BoM) is far from being resolved. After the unsuccessful talks between the union and management on Thursday, the union has declared one-day strike across all the branches of BoM on June 17 and has given a call of agitation to all unions from other banks across the country on the same day.............
SJM to have 3 new galleries
....... coins gallery is planned and it is expected to be ready in next two months. It will have more than 1,500 coins right from the Satavahana period to the Nizam’s era. The Reserve Bank of India, Mumbai, has agreed to put up two kiosks in the gallery. One will enlighten visitors with the history of money while in the other kiosk with a video will explain the method of detecting fake notes............
A Hardcore Banker's Assessment On the Likely Outcome of the Impending 10th BPS
..........Going by the expectations and the present mood of the ordinary members, we can very well say, anything below 20% will not be acceptable and hence may be rejected outright by a majority of them. If the Trade Union leaders settle for anything less, they face the prospect of being overthrown by their own fraternity. Hope, they are aware of this danger. Already there is a wide disparity between central government employees and us, after the implementation of 6th Pay Commission recommendations. From 01-01-2016, the 7th Pay Commission recommendations may be a reality, to the extent they are accepted by the Union government. In all likelihood, whether bankers’ wages are revised or not, before the next Parliamentary elections in May, 2014, the 7th Pay Commission may be constituted. In a way, that will fuel bankers’ movement further and make their stand firmer and stronger.................
Read.........
Read.........
Rate transmission likely to be RBI's key focus
......“With market expectations of a repo rate cut on June 17 now tempered due to the falling rupee, a CRR cut may act as a key signalling tool for foreign institutional investors and equity investors, as visibility over continued monetary loosening has emerged as a key catalyst for Indian equity markets,”..............
Chidu vs Subbu: Even with easing inflation, RBI may not cut rates
..........The broader picture is this: once again, New Delhi’s line of thinking may turn out to be at variance with that of Mint Road. With Subbarao’s term as governor ending in September this year, he may be of the view that RBI has done all it could to push growth and curb inflation. As he has articulated often, structural constraints will now need to be addressed and there’s only that much monetary policy can achieve. What another rate cut can do under the circumstances is, therefore, in doubt..............
Easing inflation fails to bolster India rate cut hopes as Asian markets roil
............That is bound to make traditionally cautious RBI even more reluctant to cut the repo rate again after easing in each of its three previous reviews. "They (the RBI) have their eyes set on multiple goalposts," said Radhika Rao, economist with DBS Bank in Singapore, while citing other factors such as the government's fiscal deficits. "The combination of these factors lower the odds for a rate cut on Monday.".........
Govt offices record low attendance
HYDERABAD: Thanks to the unprecedented security deployment and traffic restrictions in view of 'Chalo Assembly', central and state government offices recorded very thin attendance on Friday. While Secretariat, the power centre, saw less than 10% attendance, important head offices including Reserve Bank of India, Accountant General's office, Telephone Bhavan, BRK Bhavan that accommodates 40 government offices, Shakar Bhavan, Ayakar Bhavan, Samachara Bhavan and Parishram Bhavan which are located around the Assembly, witnessed less than 15% attendance................
Fed impact on gold demand is the key
...............All of this continues to demonstrate that the Indian government is determined to reduce gold imports into India. Clearly, they’d like to stimulate the local market and get people mobilising reserves within India as opposed to importing them. The government also worries that large amounts of savings locked up in gold curtail liquidity and it, therefore, reduces investment in infrastructure and other sectors of the economy which promote growth...............
Moral hazard lives on in India
WHETHER OR NOT United Bank of India succeeds in launching India’s first Basel III-compliant Tier 2 bond, the communications made to the market on this subject by Indian ratings agency Crisil are somewhat bemusing. In a ratings note explaining why a bond that may write down to zero deserves a AA+ rating, Crisil’s analysts wrote: “A robust regulatory and supervisory framework and systemic importance of the banking sector is expected to ensure adequate and timely intervention by RBI [Reserve Bank of India] to avoid a situation wherein [sic] a bank becomes non-viable.”.............
Kapoor vs Kapur
............The crucial factor here is the fit and proper guidelines that banks need to follow while appointing a director on the board. A circular issued by the Reserve Bank of India (RBI) on June 20, 2002, defined these as formal qualification, experience, track record, integrity et cetera. It said the candidate should be a graduate, between 35 and 65 years of age, and not a Member of Parliament, Legislative Assembly or Legislative Council. On June 25, 2004, RBI issued another circular which said that banks should undertake a process of due diligence to determine the suitability of the person for appointment as a director on the board based upon qualification, expertise,.....................
City cops conned by ATM hackers
..........Fifteen cops were robbed of their salaries, right outside the state police headquarters, and there is no trace of the robbers. This is not the latest computer game but an ATM fraud. The 15 policemen, all working in the state police headquarters at Regal, are among 37 Axis Bank account holders who collectively lost Rs 15.48 lakh on June 11 and 12...........
PSBs not to centralize PoS swipe machines
The finance ministry has reversed an earlier decision to ask public sector banks to centralize installation of point of sales (PoS) terminals—credit card swipe machines with merchants—and has now asked banks to draw independent plans. Last year, during the tenure of former finance secretary D K Mittal, the ministry had asked banks to identify service providers who will install and manage swipe machines for public sector banks so that there is no duplication of efforts in installing what was essentially general payment infrastructure. The banks were expected to install at least two million credit card swipe machines across the country in the next two years...........
Read = TOI
Read = TOI
EMV migration imperative for secure banking
.....EMV is a proven global standard. Europe is already benefitting from its implementation with a vast reduction in frauds and Asia is witnessing its accelerated adoption. In India too, the RBI already recognizes that EMV’s importance and benefits clearly outnumber the challenges it may pose for banks. ...........
Friday, June 14, 2013
FSDC: listening to the winds of change
........Thereafter, concerns have emerged that FSLRC’s recommendations make FSDC a “super-regulator”, erode individual regulatory autonomy, and allow for political interference in what ought to be the fiefdom of regulators. Unfortunately, many of these comments (most recently by the Governor of the Reserve Bank of India, D. Subbarao) appear to stem from a lack of clarity on the recommendations. Understanding this issue requires delving into a bit of history............
Call for single financial sector regulator
....... “We have seen how regulatory gaps have enabled sharks to swim through. The obvious reason is, if you say that this regulator has this domain jurisdiction, then it refuses to look at anything else...In between, somebody takes advantage and runs away with public money. “The ponzi scheme arises because regulator ‘A’ says this is not my baby. Regulator B says I am not concerned with this... So the ponzi runs through… That is exactly what is known as the regulatory gap,” said Srikrishna. According to him, we need one unified regulator which will, irrespective of the jurisdiction, have to deal with it (the wrongdoings), be it insurance frauds, ponzi schemes or any other financial issue........
Eco may have bottomed, but no signs of recovery yet: Gokarn
Subir Gokarn, Director of Research, Brookings India says the economy may hit bottom but there is no sign of recovery yet. He feels the current account deficit (CAD) problem needs to be addressed on various parameters; a diesel price hike alone will not be enough. Gokarn, who is also ex-RBI deputy governor, also says restriction on gold imports only a short-term solution. He says the government must ensure alternate investment options to gold. "The inflation-indexed bonds (IIB) a clear alternate to gold investment," he told ................
Everybody is accountable in a democracy: B N Srikrishna
......."In our country, even the Prime Minister and President can be challenged. So, who are the regulators?" ..............
Mayawati all set to launch her own commercial bank
.......Interestingly, RBI has welcomed the move. “If more politicians were to divert their personal wealth from godowns and the Swiss Banking System to the Indian Banking System, we would witness a significant rise in the money under circulation and would be able to bring an increasing percentage of our adult population under financial inclusion,” RBI Governor told............
My View on "The mechanics of money - Dr.D.Subbarao"
The article gives an insight into the function of money and how one deeply involved in handling monetary policy perceives the role of money. A quick read of the article will also help today’s busy executives how to approach books and reading habit in general. Those who are more interested in financial markets and products on display there, can benefit from pointers to the evolution of ‘market’ during the last century and also try to find answers to questions like “Is a hurricane more likely to hit because more hurricane insurance has been written?” posed by The Economist long ago. In sum, Dr Subbarao’s review of the book “The Physics of Wall Street” by James O. Weatherall is a sumptuous treat which will ignite your appetite for further reading.
-M.G.Warrier
Tightened recovery laws will help banks deal with bad loans
....Under the amendment to the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, a Tribunal can grant adjournments if sufficient cause is shown. But such adjournment can be granted no more than three times to a party and where there are three or more parties, the total number of adjournments cannot exceed six. According to M.R. Umarji, Chief Legal Adviser, Indian Banks’ Association, due to the adjournments given by the Debt Recovery Tribunals (DRTs), banks were facing long delays in getting orders for recovery..........
Govt interviews 2 candidates for SBI managing director post
..........While the government appoints managing directors, the bank's chairman is responsible for allocating portfolios. A search panel headed by the Reserve Bank of India governor conducted the interviews earlier this week. The search panel included Rajiv Takru, secretary, financial services, in the ministry of finance; Anand Sinha, deputy governor of RBI (nominee of the governor) and one professor from an Indian Institute of Management, among others. The selection for this post is crucial as the selected candidate could well be made chairman of the country's largest bank when Pratip Chaudhuri's two-and-a-half-year term ends in September..............
Remembering KSK
This refers to A Seshan's letter "KSK: Gentleman-economist" (June 11). I was working with State Bank of Mysore, Dalal Street branch, Mumbai in 1976-79 when K S Krishnaswamy was the RBI deputy governor. His salary account was with our bank. I was asked to reconcile our accounts with the RBI that was in arrears for more than a year. During the course of verification, I found that .................
Bank unions want ‘adequate increase’ in salary in 10th bipartite wage settlement
.....When asked if unions were agreeable to the proposal of variable pay linked to productivity, Venkatachalam said that they were open to proposals that offer incentives for performance or motivate employees. However, he clarified, that these could not be in lieu of the increase in basic emoluments that they were demanding. He also debunked the ‘cost-to-company’ concept that was floated by the IBA during the talks held last week.............
Shocking
It is rather shocking to learn that the management of the Bank of Maharashtra has terrorised its employee to cover up its misdeeds (“To fix whistleblower …,” June 13). The RBI should have ordered an inquiry into the whistleblower’s charges of imprudent banking decisions made by the mangement. By not acting on such an important tip, and forwarding instead the letter in a routine bureaucratic manner to the BoM management, the RBI acted irresponsibly. By initiating action against Devidas Tuljapurkar for carrying a poem he published 19 years ago as editor of Union’s in-house magazine, the management is coercing him and his Union to desist from whistle-blowing activities. The management of a PSU is supposed to be model employer.
-A.G. Rajmohan, Anantapur (The Hindu)
My View on "India’s Small-Change Problem":.........
The issue is are we minting sufficient number of coins to cater to the needs of our growing economy ? It is to be recognised that a considerable number of coins get wasted during religious rites in our country. The recent Kumbh Mela is just one such example.Do we make effort to replace the coins that are swept away or melted by some unpatriotic business ? The answer is NO. This partly explains the reasons for not finding reasonable quantity of coins that were minted prior to the year 2000. Thus the data relating to 'coins in circulation' has to be taken with a pinch of salt. In other countries we find lot many coins in circulation that were minted in the 1960s and later. But not so in our country. Another thing. Have we coinised all the five rupee notes that were not renewed. And remember, this has has to be done on a continuous basis and not as onetime basis for reasons mentioned above. So what's the answer ? Making available more coins DEFINITELY ! Either we convince the Govt to increase the capacity of the mints or import coins. Now if both the proposals are not acceptable to the Govt. for economic and political reasons, its time we decided to set up mints ourselves as we did in case of note printing. This is because the shortage of coins in the market does not dent the image of the Govt. but it does as far as RBI is concerned.
- G N Rath, General Manager
Racketeers take advantage of loopholes in RBI circular
Taking advantage of loopholes in a Reserve Bank of India circular on norms to register fake currency cases, a racket is engaged in circulation of such notes in the city, the police feel. Though they are receiving many complaints from banks and shops, a case cannot be registered in many instances because of the circular.......
FM to meet PSU bank chiefs;persuade them to cut interest rates
.......: "What I want to tell the RBI, I tell the RBI quietly and indirectly. I like them to take correct decisions"...........
Role models
This refers to Subir Gokarn's column "When role models fail" (Muddy Waters, June 2). In the mid-1940s, India saw a number of selfless heroes. Subhas Chandra Bose, who cleared the Indian Civil Service examinations, did not accept the plum post and lead a "comfortable" life. Instead, he joined mainstream politics, became His Majesty's enemy and gave his life for the freedom of the country.......
From a trot to a canter
............ But the possibility of a depreciating rupee pushing up prices and, therefore, inflation rates, is tying up the RBI chief’s hands. If he cuts rates to push growth, he risks stoking inflation. If he keeps rates intact, he risks perpetuating the slowdown. It is in this backdrop that finance minister P Chidambaram announced on Thursday that the government would come out with a slew of reforms measures over the next couple of months. Hopefully, his steps to get stalled projects off the ground will also begin to show results soon. Then, he has urged all departments of the government to start spending their budgetary allocations............
Govt gives Sebi, RBI access to call data records
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............
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.................
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