Inauguration of Lead District Managers' office

........The office of lead District Managers’ was inaugurated by Dr Deepali Pant Joshi, Executive Director of Reserve Bank of India in presence of V R Iyer, Chairperson and Managing Director of Bank of India on July 31. The function was held at Zonal Office of Bank of India at Fort, Mumbai for inauguration of LDM’s office of Mumbai city and via video conferencing for the Mumbai suburb district in presence of senior functionaries of RBI, NABARD, BOI and the District Collector...........

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Can’t afford to take it easy - A.Seshan

As the Reserve Bank of India generated shock and awe in the financial system with its policy measures only a few days ago for tightening liquidity, there was a general expectation that its July 30 review would be a non-event with no dramatic announcements. It was proved correct. The bank should be thanked for not upsetting the apple cart with further measures, even as the results of the earlier ones are panning out. The exchange rate has so far seen up and down movements within a narrow range normally expected of the markets..............

Read - HBL

Financial inclusion not charity: RBI

.....“Banks must not approach financial inclusion as a charity but a viable business model,” Chakrabarty said. “Our regulations are one of the most flexible to support financial inclusion,” Chakrabarty said at the Mint conference, Architecture of Financial Inclusion: The Indian Model, in Mumbai on Wednesday..........

Read - Mint

Forex reserves adequate: Patel

......“Our reserves are adequate and 6.5-7 month of import cover is good. Short-term debt has increased but the short-term debt has been comfortably rolled over and refinanced over the last three years despite the high current account deficit (CAD),” said Urjit Patel, deputy governor, Reserve Bank of India (RBI), in a post-monetary policy conference call with analysts and researchers...............

Read | Business Standard

Why selection of RBI governor should be more transparent

A crisis is an opportunity. Manmohan Singh and P Chidambaram have a unique opportunity to reform the RBI

...............Unfortunately, Chidambaram has constituted no such committee to suggest names of candidates to succeed Subbarao. At the very least, the Finance Ministry should have advertised the position, in India and abroad. While it would be expecting too much for any Indian Government to consider foreign nationals for the RBI job (the UK recently appointed a Canadian as Governor of the Bank of England), it makes complete sense to solicit the candidature of Indian nationals from the worlds of academia or private sector (banking, investment banking) or international organizations (World Bank, IMF). That would only bring diversity and richness to a shortlist which would otherwise consist solely of economists serving in the Government system......................

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The curse that bedevils RBI governors

Finance minister P. Chidambaram has indicated that the Reserve Bank of India (RBI) will soon have a new Governor. He could become the latest victim of an old curse of trials by fire. Three out of the past five governors have had to deal with immense economic stress within a few months of taking the job............

Read - Mint

Has Subbarao been pushed out of the next RBI Governor race?

It’s not very often that you hear the finance minister discuss the appointment of the RBI Governor openly and in media interviews. After all, unlike many other autonomous arms of the government, the central bank is one of the most prestigious institutions of the country and great respect is accorded not only to the Governor as an individual but also to the post. So it was quite surprising to find an otherwise disciplined P Chidambaram virtually ruling out any extension to the present RBI Governor D Subbarao in an interview to Economic Times. ..............

Read | Business Standard

Govt is searching for new RBI Governor: Chidambaram

The government has started search for a new Reserve Bank governor as the incumbent, D Subbarao, who battled inflation through tight money policy during his tenure, is set to exit in five weeks.  'The Governor met me about 6 or 7 weeks ago... He (Subbarao) said that he would like to move on and he would not like to be considered for another extension. 'So I accepted that... That is where the conversation ended. We are now in a search cum selection mode of the new Governor,' Finance Minister P Chidambaram said at a press conference..........

Read | Business Standard

After Subbarao, who will be the next RBI Governor

........Prime Minister Manmohan Singh in consultation with Mr Chidambaram will finally pick the next RBI boss. Before, Wednesday's statement from Mr Chidambaram, there was a strong buzz that Dr Subbarao may be offered another extension given that elections are less than a year away and the government would have been comfortable with a man who's been at the helm of affairs for a long time rather than have someone new altogether. Currently, the RBI top job is not really the most enviable assignment to take on with the country's widening current account deficit and a hostile rupee..................

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DA Increase for Bankers from August to October 2013

Now CPI for all the three months has been announced for relevant months and the same is as follows:-............

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Deadline to file income tax returns extended to August 5

The last date to file income tax returns has been extended to August 5 by the government from July 31. This has been done due to the number of It returns being filed electronically. As per the Central Board of Direct Taxes (CBDT), there has been an unprecedented surge in number of returns being e-filed...........

Read | Business Standard

Saraswat Bank - Rupee Bank merger gets in principle approval

Pune: Saraswat Bank is understood to have received in principle approval from the State Co-operative Department to merge with the ailing Rupee Co-operative Bank. This was confirmed by one of the administrators of the Rupee Co-operative Bank, who did not wish to be identified. The Reserve Bank of India (RBI) will be providing a statutory package of Rs 320 crore to support the merger............

Read - Sakal Times

Push to replace old-format cheques

RBI’s efforts to introduce cheques with uniform security features have not yet fructified as a large number of customers are still using old-format cheques. RBI, which in December 2011 said banks should migrate to the cheque truncation system by September 2012, has extended the deadline four times. The new deadline is December 2013. Customers should come to the banks and get their old format cheques replaced, said Shubhalaxmi Panse, CMD, Allahabad Bank.............

Read | Business Standard

Banks looking at voice biometrics for security

........ “A voiceprint is a hashed string of numbers and characters that represent how specific an individual’s voice rates on a host of characteristics being measured. As such, a compromised voiceprint has no value to a hacker. It cannot be used to authenticate a system, nor can it be used to reverse engineer someone’s voice,”..............

Read - TOI

Participation of Senior Officers in Agitation Programme of NBOA

.........Incidentally, we have also come to know that our referral organization RBI too has never issued such an instruction and the officers associations at RBI have not been put under any such unconstitutional restraint. Similarly no such Circulars have ever been issued at other apex organizations like IDBI/SIDBI...............

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Bottling it up

..........When the senior officials walked into the press room a little ahead of the Governor and his deputies, staff were still placing name plates and bottles of mineral water on the table. As a standard practice, the label on the mineral water bottles were also removed, causing a senior official to ...................

Read | Business Standard

Sooner the better for RBI to unwind grip on liquidity

..............The RBI governor has indicated that there would be a calibrated relaxation of its July measures once the rupee stabilizes or at least till volatility is contained. There is a good chance of that once FII investment returns, something that will happen with the continuation of quantitative easing by the U.S. Fed. But the rupee is weak and should not be propped up by ad hoc measures. The sooner the RBI unwinds its tight grip on liquidity, the better it would be for the rupee to find a stable level and for growth to pick up.

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Bad loans and the death of the base rate

....The ecosystem too has done a bad job of eliminating the misconception that base rates have to dance only to the Reserve Bank of India (RBI) policy rate tune; instead, they depend on overall costs of doing business for the bank. Those of us with longer memories will recollect the furore caused by high bank lending rates when inflation dipped sharply to low single digits after the Asian crisis (remember oil at $10?) and after the tech meltdown (January-May 2002 inflation was 1-2%). Real rates (rates minus inflation) were an outrageous 10-15%. However, banks were helpless and the regulator too grudgingly acknowledged that with the mountain of bad loans that banks were sitting on, lowering rates meaningfully was a tough task...........

Read - Mint

Rupee@61: How the RBI 'snatched defeat from the jaws of victory'

..........The Reserve Bank has not only failed to announce any additional steps to defend the currency yesterday, but also said that it may withdraw the cash tightening steps taken so far in a calibrated manner if the rupee stabilises. These comments have led investors to doubt the RBI's resolve in sticking to its measures given surging bond yields threaten to raise borrowing costs...................

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The currency fall

.............That, together with his explicit reference to the "impossible trinity" of open-economy macroeconomics - that independent monetary policy, free movement of capital, and a fixed exchange rate cannot all be in operation simultaneously - was an indication that the RBI wished to manage the rupee, which had declined to about 60 to the dollar.............

Read | Business Standard

Govt must do more, not just look to RBI

........Dr Subbarao said there was a case for easing of policy rates but for the fact that stabilisation of the rupee and caution on the external sector have got precedence over growth deceleration and inflation. He said the Indian economy had been overrun by what he called the “impossible trinity” trilemma that started in May............

Read - Asian Age

Digging in

........... Merely tweaking interest rates in the next monetary policy review could risk even slower economic growth than RBI now prognosticates -- on Tuesday, RBI lowered economic growth projections for 2013-14 to 5.5 per cent from 5.7 projected in May this year. Applying further squeezes on rupee availability to importers will not help much going forward, as India’s growing trade imbalance or external deficit will undermine any value gains accrued from policy action.............

Read - Deccan Herald

RBI Governor didn’t Act Bold

This refers to ‘The Man Who was Never His Master’s Voice’ (ET, Jul 31). It is incorrect to call D Subbarao as one of the bold RBI Governors. He was a mute witness to the government’s 2008 decision waiving farm loans. Why did he not protest knowing full well the inimical effects of that decision on public sector banks’ balance-sheets? Now, within three months of the Budget announcement of a women’s bank, RBI has given its approval, knowing that the loans will be granted to women who form a big chunk of votes.  

- K V RAO, Bangalore (ET) 

Monetary policy and the exchange rate

......One wonders whether the Reserve Bank of India’s faith in the REER (real effective exchange rate) index, as presently constructed, as a measure of the competitiveness of the tradeables sector, is as grievously wrong as the IMF’s estimate of the fiscal multiplier. It may be recalled that the IMF realized last year that the multiplier (namely the ratio of fiscal compression to nominal GDP change) is not 0.5 as it had assumed, but anywhere from 0.9 to 1.9! Use of mathematical models without clarity about their underlying assumptions and limitations can be highly misleading—and the cost is too often borne by people least able to bear it. Ask the Greeks, for example!.............

Read - Mint

Is the RBI getting it wrong?

The RBI’s July 30 Monetary Policy Review has maintained a predictable ‘status quo’. This ‘status quo’ comes after the RBI had already ‘reviewed’ its policy twice earlier this month and imposed a series of ‘indirect’ liquidity tightening measures. The RBI has further clarified its stance as one of ‘active liquidity management...consistent with the growth-inflation balance and macro-financial stability’. Thus, going forward, we may anticipate further monetary tightening – either through direct or indirect measures.................

Read - HBL

RBI says it has enough firepower to aid rupee

.....“There is a lot of arsenal with the RBI, we will use all of that as might be necessary, as warranted by the situation,” ............

Read - DNA

Chidambaram's one year report card: More misses than hits

......Let me first of all say that we have already seen since August 2011 we have seen the rupee weakening from 44 to 60. So, RBI and the government are clearly at this point in time while the argument that we should not be worried about the rupee perhaps was valid when we were at 53 but when you are at 60 and all the negatives are priced in I don’t think that is really now a question. I think RBI had to do something and going ahead from RBIs perspective they have already taken some fairly severe steps..................

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Mix of pills to cure multiple ills

...........The government plans to ask public sector companies to raise funds abroad to cut debt. Officials have been planning to ask state-run infrastructure funds to raise long-term debt abroad to fund infrastructure projects. The finance minister today indicated that public sector banks, too, could be asked to raise funds. He said these would be “quasi-sovereign issues”, which means the bonds or debt instruments offered would have the indirect support of the government.............

Read - The Telegraph

Gold funds’ growth plans at standstill; jewellers push for recycling

With the Reserve Bank of India curbing gold imports, gold-backed exchange-traded funds and gold fund-of-funds find their expansion plans at standstill. On the other hand, jewellers, faced with shortage of gold, are encouraging recycling of used jewellery by their customers. Gold exchange-traded funds are awaiting clarifications from the RBI on gold import regulations.......

Read - HBL

Beyond gold: Chidu’s CAD reduction plan is better late than never

........... Importantly, Chidambaram promised to addressed the twin deficits and said the ‘red line’ of 4.8 percent for the fiscal deficit of FY14 would not be breached under any circumstances. The FM’s comments came a day after the RBI undertook its first quarter review of the Annual Policy for 2013-14, where the central bank stood its ground and refused to buckle under pressure and effect any cut in key rates, and also pointed to the CAD as a “daunting structural risk factor” which had been well above the sustainable level of 2.5 percent of GDP for three years in a row. In fact, RBI also stressed on the need for the government to seize the opportunity created by the RBI’s mid-July liquidity tightening moves to stem the rupee slide and put in place policies to bring CAD down to sustainable levels.........

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The Man Who was Never His Master’s Voice

..............What the FM perhaps underestimated was the power of the old boy network. Every action of Subbarao was openly supported by former RBI Governor C Rangarajan and tacitly backed by Prime Minister Manmohan Singh, another former Governor. Thus, the rift between FM and the Governor could well be an outcome of politics at a different level. It may be a little too early to judge Subbarao, often blamed for failing to act on time to raise rates to tame inflationary expectations or buy dollars to shore up forex coffers.................

Read - ET

Subbarao doesn’t want extension: FM

..........."Dr Subbarao had met me a few weeks ago and said he would like to move on and he would not like to be considered for another term. I accepted. So now we are in search mode,"...................

Read - TOI

Need of the hour - constitutional protection to the tenure of the Governor

Finance Minister's speech in Ahmedabad is giving an impression as if the Governor had not expressed his views, in his recent meeting with the FM in Delhi, which would guide his credit policy announcement to be made later today. In fact, a wrong convention has been created by Governors (this Governor is not guilty of starting this practice created many years ago but is guilty of continuing with it) by meeting the FM a few days prior to every one of the Credit Policy announcements. While the FM has every right to ask the Governor to meet him when ever he wishes to discuss any policy issues, this practice of the Governor meeting the FM prior to the Credit Policy announcement does not augur well for the image of an independent autonomous central bank of the country. Of course, some could legitimately argue that this practice has served an useful purpose in that it has helped cement and confirm the universal impression that the RBI is totally subordinate to the Government and its autonomous character is a figment of imagination !! One or two Governors may have asserted his independence in one or two issues sometimes but this does not mean that the Bank can act independently. I wonder why the demand for a constitutional protection to the tenure of the Governor, in the manner enjoyed by the CEC, CAG, has not been voiced by anyone. This protection even when it is given should be accompanied by a total statutory prohibition on any sort of employment being taken up by the Governor after his retirement. 

- A.Chandramouliswaran

Subbarao's impossible trinity

The sharp fall of the rupee against the dollar has made RBI's policy making complicated, as it now has to deal with exchange rate stability apart from addressing slowing growth and keeping a vigil on inflation, which could surge again. The weakening rupee forced RBI to tighten liquidity, which jacked up short-term rates.............

Read | Business Standard

Finance ministry gives RBI a thumbs-up

New Delhi: The ministry of finance, which has disapproved Reserve Bank of India’s (RBI) move to hold on to policy rates over months, finally seems to be burying the hatchet with the banking regulator, courtesy the current account deficit (CAD) and a dwindling rupee. The ministry on Tuesday welcomed the RBI’s decision and stressed that the ministry and the RBI are on the same page as far as the key rates are concerned. Chief economic advisor Raghuram Rajan said, “RBI policy saw the main immediate macroeconomic task as that of stabilising the rupee, and once the rupee is stabilised, the policy makers will have room for more growth-friendly measures. The government welcomes the RBI policy statement..............

Read - DNA

RBI maintains status quo; banks may raise rates in 3-4 weeks

D Subbarao, Governor, RBI, along with Urjit R Patel, Deputy Governor, address a press conference on Monetary Policy in Mumbai on Tuesday

...........Stating that the external sector was the "biggest risk to macroeconomic stability," Subbarao called for urgent policy steps from the government to curtail the CAD to a sustainable level of 2.5 per cent of GDP and said that the RBI is ready to use all instruments under its command to help in the efforts. "It should be emphasised that the time available now should be used with alacrity to institute structural measures to bring CAD down to sustainable levels," the Governor said.............

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RBI keeps key rates unchanged; cuts India growth forecast to 5.5%

.........“The policy stance is guided by the need for continuous vigil and preparedness to proactively respond to risks to the economy from external developments, especially those stemming from global financial markets,” Governor D. Subbarao said in what would be his last policy announcement unveiled here...............

Read - HBL

You Can Bank On It

In a year from now, at least 200 top bankers will get new business cards printed, and pocket an exponential rise in their take-home salaries. Mint Road would, at the minimum, have issued four new private banking licences; making it the single largest driver of hiring in the sector in a while. And, as money makes the mare go, it may not be much of a task to get folks in. You will see more of the same in state-run banks, but for an entirely different set of reasons. Of the 1.3 million employed by the banking sector, nearly 900,000 work for state-run banks. “They (state-run banks) will face a major talent pipeline challenge with over 80 per cent of the senior management set to retire in the next five years. There will be a shortage of skilled managers to replace middle management personnel who will be moving into these senior management roles,”................

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Private banks training staff to serve rural customers

Thanks to Reserve Bank of India’s initiative to drive bankers to extend financial literacy across the large number of hitherto un-banked rural centres of the country, private sector banks are taking special initiatives to train their staff to cope with rural customers and set up branches in such hitherto un-banked centres in a big way...........

Read - The Hindu

RBI says approved Srinivasan's appointment on YES Bank board for a year

................'There is an age limit of 70 years, but it is not a hard limit. When he was appointed, he was well short of 70. He has been given approval for one year. Some part of his term may go beyond 70,' Anand Sinha, Deputy Governor at RBI, told reporters in Mumbai today. Srinivasan was appointed as an additional director on YES Bank's board with effect from October 23, 2012. In the annual general meeting on June 8, 2013 Madhu Kapur had objected the appointment of Srinivasan, Nanda and Ravish Chopra on the bank's board......................

Read | Business Standard

We are watching Yes Bank boardroom war carefully, says RBI

.“This boardroom battle which is going on (at Yes Bank), we are studying it and if we think that some measure needs to be taken on the issue, we will look into that,” said Deputy Governor in-Charge of Banking Supervision Anand Sinha during the customary post-policy interaction at the RBI headquarters.........

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A confused, enigmatic RBI

.............If at all any lesson is to be learned from this latest episode, it is the criticality of giving the RBI a single point agenda and mandating it to attain that. The RBI titled its measures as meant to “address exchange market volatility”. Since volatility can be measured, it would help greatly if the RBI were to state its objective in quantitative terms. The market can then draw its own inferences as to whether more measures are needed or not. The scope for confusion would be greatly reduced.....................

Read - HBL

RBI's move was on expected lines: Saumitra Chaudhuri

Saumitra Chaudhuri, member of the Planning Commission and the Prime Minister’s Economic Advisory Council, is one of the government’s troubleshooter for vexed economic problems. After Reserve Bank of India (RBI) Governor D Subbarao opposed the issuance of a sovereign bond, Chaudhuri, also one of those being considered for the top job at RBI, tells Sanjeeb Mukherjee quasi-sovereign bonds by a few public sector entities could help fund infra projects. Edited excerpts:..........

Read | Business Standard

Bankers make barrage of demands to protect balance sheets

...........RBI on July 15 and 22 put severe restrictions of banks borrowings from liquidity adjustment facility and hiked rate for borrowing at standing facility. The purpose was to curb trend to use rupee resources for speculating in foreign exchange market. Bankers in interaction with RBI top brass sought a one-time permission to move securities from Available for sale (AFS) to Held to Maturity (HTM) bucket. This shifting of securities would be without marking them to market, they said.  The exercise should be run on valuations that were on July 15.................

Read | Business Standard

Need of the hour—India’s own version of Three Arrows

..........When RBI announced tightening measures over the last two weeks, it appeared that India had voluntarily chosen to undergo internal adjustment despite the skewed cost-benefit ratio. However, the policy statement belies this assumption and suggests that policymakers have misgivings about the cost to be paid for defending the currency. So what are the options now available? One option would be for RBI to undo part of the damage by reiterating its resolve to protect the currency and dropping its insistence that it is worried about growth. This would mean doubling down on the measures taken and if need be, carry out further tightening by hiking the marginal standing facility (MSF) rate by another 100-200 basis points. The second option would be to recognize the futility of trying to peg the exchange rate and reversing the interest rate tightening over the next few weeks. Either way, RBI actions would need to be bolstered by the government.......

Read - Mint

Govt must take the lead; RBI alone can’t take us back on growth track

........While the merit of RBI measures is well appreciated, it is critical to focus on bolstering growth through a revival in investment climate as improved fundamentals alone would enable us to attract durable capital flows. As such, government needs to further step up its efforts to clear hurdles impeding stalled projects..........

Read - FE

RBI in prisoner's dilemma in FX/rupee; NRI bonds way out?

.........Sen Gupta is of the view that the RBI needs to urgently buy forex to boost its import cover (measured as the number of months of imports foreign reserves could pay for), which right now down to roughly 7 months; below the optimal range 8-10 months. The trouble is that buying dollars would strengthen the US currency and further weaken the rupee. Yet Sen Gupta feels the rupee is unlikely to stabilize till RBI bolsters its FX reserve...........

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RBI Governor D Subbarao says no rollback timeframe for liquidity steps

........Explaining the rationale for the July 15 and 23 measures to tighten liquidity, the Governor said, "Forex intervention is a standard tool for defending against volatility. As much as we resorted to that instrument, we were also conscious that we should not fuel speculation or help speculators." Subbarao said the idea was to make liquidity scarcer and more costly. The RBI determined that modulating access to LAF would be the most efficient way of controlling volatility and it can be calibrated more flexibly than resorting to CRR or repo because of other implications attached to those measures, he said.........

Read - DNA

Govt promises 'specific steps' in coming weeks to contain current account deficit

............"We welcome the RBI policy statement...the RBI and the government are on the same page and working together to achieve stability and growth," Rajan said while responding to the RBI's decision to maintain key interest rates...........

Read - DNA

US Fed will dictate India’s monetary policy

.....But that’s no assurance for RBI. Which is why the policy stance in this review is “guided by the need for continuous vigil and preparedness to proactively respond to risks to the economy from external developments, especially those stemming from global financial markets”. In its order of priorities, what has dropped lower down the list are concern about slowing growth and inflation that could rise because of the depreciation of the local currency. Its priority No. 1 is addressing the risks to macroeconomic stability from external shocks. Risk to growth comes second and the re-emergence of inflation pressures, third. Interestingly, managing liquidity conditions to make sure that the flow of credit remains intact to the productive sectors of the economy is the central bank’s last priority........

Read - Mint

Rajan hints at specific steps to contain CAD

...............In a statement here, Dr. Rajan maintained that the government would announce “specific measures in the next few weeks” to contain the widening current account deficit (CAD) which has put pressure on the Indian currency and once the rupee is stabilised, the policy-makers will have room for more growth-friendly measures. “We have already taken some steps on liberalising FDI [foreign direct investment]. We are also exploring some other options for stably and sustainably funding the CAD. We will announce specific measures in the next few weeks,” he said.................

Read - The Hindu

Rapid rupee depreciation has put us in vicious spiral: Subbarao

Reserve Bank of India’s Governor D Subbarao explains the reasons for the recent liquidity tightening measures at the post policy press conference and explains the central bank’s strategy on the exchange rate: Excerpts:...............

Read | Business Standard

RBI’s foot is still on brake pedal

..........Further, the guidance provided by the RBI — that monetary policy focus would revert to supporting growth only after calibrated rollback of the recent liquidity measures as stability is restored in the foreign exchange market — is likely to keep interest rates sticky at elevated levels, which would weigh upon consumption and investment decisions. Accordingly, we anticipate that the RBI will ease its stance in the second half of the fiscal.............

Read - HBL

Insulating the economy

.........But the lack of quantifiable objectives is only one part. Curbing exchange rate volatility should not by itself be the central focus of the RBI’s policy, considering the real structural reasons underpinning such volatility. These have to do with unsustainably large current account deficits (CAD) and slowing growth making it difficult to attract the capital flows necessary to finance these. Without CAD levels coming down and growth recovering, the Indian economy will continue to be vulnerable to external shocks. .........

Read - HBL

Predictable, but challenging

............While not being in a hurry to loosen its policy, the RBI has given an assurance that with the right conditions prevailing, monetary policy will revert to supporting growth while maintaining a vigil on inflation. That, unfortunately, seems far away as the rupee quite unexpectedly tanked again on Tuesday. The authorities have been quick to blame speculation but only the next weeks will show whether it is a one-off development or the beginning of a new period of stress for the rupee..........

Read - The Hindu

Moderating growth outlook by RBI worries India Inc

......“We understand the decision of the RBI on the rates. We draw heart from the statement of the RBI saying that had it not been for the volatility, the rates could have been reduced, since inflation has started to moderate. We see this as a softening of stance by the RBI,” Confederation of Indian Industry (CII) President Kris Gopalakrishnan said................

Read - The Hindu

No need for IMF loan: RBI Guv Subbarao

Reserve Bank Governor D Subbarao today said India's current economic situation does not warrant any move to seek loans from the International Monetary Fund. "The answer is no! I don't believe that we are in a situation where we have to go to the IMF. We are fairly resilient," Subbarao told reporters at the customary post-policy media briefing............

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A feeling of helplessness

.......The problem, for Mr Subbarao and India’s fiscal managers in New Delhi’s North Block, is to attract more foreign direct investment (FDI), which is always more welcome than portfolio investment. Yet, don’t expect a flood of dollars to gush in immediately despite the recent policy overhaul.............

Read - HT

Waiting for Godot: Will RBI’s wait for a stable rupee be endless?

............India’s structural issues are not going to be addressed overnight. Global markets will move to the Fed’s tunes. RBI will be waiting for the INR to stabilize before acting to support growth. How long for the INR to stabilize? Hopefully it is not Godot!!

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RBI shoulders arms: Sajjid Chinoy

.........If the game plan is to induce behavioural changes in the market, an element of constructive ambiguity is critical. If RBI were to set a date for withdrawal or lay out a specific criterion, the economic agents it is trying to influence will simply wait it out in anticipation. But RBI's inability to provide a timeline for exit has further fuelled the debate on the efficacy of the tightening measures. 'Are there measures working?' runs the exasperated refrain........

Read | Business Standard

Painted into a corner

........In the RBI's thinking, as reflected in its policy review statement, the recent rupee depreciation significantly exacerbates inflation risks, thus shifting the policy priority back to inflation containment and away from growth, which had been the direction taken over the past few months. In this sense, even though the measures taken were rationalised as being aimed at controlling the slide in the rupee, they can also be seen as conventional monetary tightening, justified by the inflationary consequences of depreciation..............

Read | Business Standard

India sputtering

The latest monetary policy statements by the Reserve Bank of India (RBI) clearly show that its biggest concern right now is whether there will be adequate capital flows to finance the current account deficit, at a time when global financial markets are rattled by the prospect of the US rolling back its extraordinary monetary stimulus..........

Read - Mint

Why RBI governor is right in keeping a tight leash on interest rates

..........Interest rates are a loaded pack and needs careful handling and deliberation. Importantly, it would be a positive step forward if the Reserve Bank of India and the ministry of finance begin to make greater disclosures about their policies and actions and, more importantly, reasons underpinning the policies. The cloak of secrecy that surrounds the financial system is opposed to the values of transparency and accountability that are essential to democracy. The need for openness has never been greater.

Read - DH

Anyone here for the Rs?

................More curious is the reply given in the Governor’s press conference—not by the Governor though—on a question on the overseas NDF markets. If NDF markets feel the rupee needs to fall further given the fundamentals, the question was, how will curtailing local currency trading help? It is difficult to go along with RBI’s view that the local market determines what happens in the NDF markets since the latter are several times larger. In any case,...........

Read - FE

Mint Road’s white flag in war for Rs seen as sign of weakness

..........“One thing we are trying to do in the currency futures market, there is a lot of position-taking which we have curtailed and by month-end, this would reduce hopefully. If not, further measures would be taken. There is a connect between NDF market and the futures market,” said H R Khan, Deputy Governor, RBI. The Governor, however reiterated that the central bank was not trying to defend any level on the rupee which remains vulnerable due to the high current account deficit and the possibility of a reversal in capital flows due to the possible tapering of the US Federal Reserve’s quantitative easing programme...............

Read - FE

Rakhi losing its golden sheen

LUDHIANA: While the bond between siblings does not really depend on material tokens, one cannot help the excitement of receiving Raksha Bandhan gifts. For decades, gold coins in a velvety backdrop have dazzled sisters and warmed their hearts. The yellow metal has assured them of security in turbulent times. But now that the Reserve Bank of India has banned the sale of gold coins, people would need to make slight adjustments in the customs............

Read - TOI

Do’s & Don’ts before you print and submit ITR V

You must be aware of the fact that return filing process gets completed only when you send ITR-V copy to CPC office. Let’s understand the last and the most important process to complete your tax filing:..............

Read - DNA

Haj funds illegally deposited in Karnataka's bank

............... Despite committee deciding to transfer the Rs 2.29 crore to Union bank of India on March 1, 2012, the executive officer went ahead keeping the amount in Amanath Bank as savings in May 2012. However, Rs 2 crore was converted as fixed deposit for a period of three months in December 2012," the minister said. Islam said of late Amanath Bank has come under Reserve Bank of India, therefore deposits cannot be withdrawn immediately. The minister also assured the House that he would write to department of personal and administrative reforms ( DPAR) to initiate action against an officer for illegally depositing money..........

Read - TOI

Evaluating Subbarao

.........And when the current account deficit (CAD) was looking problematic, Subbarao even gave a speech at the London School of Economics’ IG Patel lecture in March arguing that those advocating interest rate hikes to fix the CAD were wrong since lower interest rates would actually encourage equity investors even while dissuading investors in debt. That is clearly a view the Governor jettisoned very soon. It is never possible to answer a debate in the absence of counterfactuals—would lower interest rates have spurred investments while various government clearances continued to dog them?................

Read - FE Editorial

RBI’s Russian Roulette

...........So, what has RBI achieved? At best a temporary reprieve for the besieged rupee? Engineering a liquidity crunch is hardly the advisable remedy to break out of this siege. The costs can be just too high in terms of lost growth, severe dampening of investment sentiments, killing off the animal spirits and making our exports less competitive.............

Read - FE

Bankers, officials hail financial inclusion work in Madhya Pradesh

.........“Madhya Pradesh is the only State in the country where there is perfect coordination between the Reserve Bank of India, the State Government and other agencies concerned,”..................

Read - The Hindu

RTI Judgement Series: Bank PIO fined Rs 17,000 for not complying with CIC order

...........Since no reasonable cause has been offered for the delay of 68 days in providing the information to the Appellant as per the order of the CIC, the Bench is imposing the penalty on Mrs Mugdha Satarkar, PIO & AGM (Vig) under Section 20(1) of the RTI Act at the rate of Rs250 per day of delay of 68 days that comes to Rs17,000," ..............

Read - Moneylife

Check before you express

RE: WHITHER R B I 'S CULTURE ?

Subramaniam, Uma

Sent:	Monday, July 29, 2013 5:30 PM
To:	Ramachandran P.P ‎[pprchandru@gmail.com]‎

Dear Sir

The College is dismayed  by  your remarks  on the blog. We wish you had checked the facts with us before sending them  into the blogging space. It is not correct to state that the College did not issue an invite to Ms Thyagarajan. Not only was the invitation mailed to her, one of our Jubilee co-ordinators Shri M Subramaniam who is also Member of Faculty rang her up a day before the event for making the necessary logistical arrangements for car pick up etc. which was politely declined by her on health grounds. Further, she was personally delivered a copy of the Souvenir at residence. We trust our clarification will also be published in the blog.

Regards

Uma Subramaniam 
Chief General Manager and Principal

RBSC, Chennai

This is the factual feedback received from the Principal, RBSC in response to info item given by P.P.Ramachandran, DGM (Retired) titled 'Tired' on appraoch towards 'Retired'............... 

An insider’s view of reforms

.........The RBI Governor Subbarao (chapter 10) raises what he terms “policy challenges from the New Trilemma.” He has often emphasised the need for the RBI and the government to share responsibility, especially in relation to the impact of fiscal deficits and to ensure fiscal stability. He feels that unless the respective roles are defined, these could impact adversely the independence and accountability of the RBI. The situation could get worse if debt market operations are shifted from the RBI to the Finance Ministry. It is a retrograde step and puts the clock back.................

Read - The Hindu