..........In his new role, Rajan will be tested again and again. He will have to maintain his independence and deal with the Finance Ministry’s pressure even while working in tandem. He will have to spar with some of the key people with whom he has worked closely in the last one year as the Chief Economic Advisor to the Government. Incidentally, the last three Governors had all done stints in the Finance Ministry in various capacities before their appointment at Mint Street...........
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.
Wednesday, August 7, 2013
Don't get cowed down by govt: BJP's advice to new RBI Governor
Trial by fire, again
......... Dr Subbarao articulated his scepticism about many of the proposals both during the process and after the report was submitted. In fact, several proposals closely follow the recommendations of the Committee on Financial Sector Reforms, which was chaired by Dr Rajan himself and submitted its report in 2007. Does this mean that the significant amendments to the Reserve Bank of India Act, which the new code suggests, will now get the backing of the RBI Governor? Or, as has been seen to happen in the past, does "where you stand depends on where you sit" kick in?.............
New Governor won’t Get to be His Own Man
In
2008, the new RBI Governor, Raghuram Rajan, detailed his idea of the
right agenda for India as head of the Committee on Financial Sector
Reforms. Of its many recommendations, the key one was that RBI should
have a single policy focus — low, stable inflation. Corollary: it should
not focus on targeting the exchange rate or stimulating GDP. Noting
that historically RBI sometimes targeted inflation, sometimes the
exchange rate, and sometimes economic growth, the report said “by trying
to do too many things at once, RBI risks doing none of them well”. Will
Rajan put this vision into practice as RBI Governor? Not a chance.
Indian politics will not permit an inflation only focus for RBI. After
his spell in the finance ministry, Rajan must be well aware of the
limits to the independence of any RBI Governor............
Read - ET
India picked the right man at the wrong time to be its new central bank Governor
It would be hard to name a more qualified candidate to take over the Reserve Bank of India. But despite his long list of career successes, Raghuram Rajan, who takes the helm in September, may do a terrible job—though it probably wouldn’t be his fault. Why?..............
Steep learning curve ahead for next RBI Governor Raghuram Rajan
.....In an era when the credibility of almost every institution here has been eroded, Rajan has the unenviable task of leaning against the government to protect India's central bank. Despite its flaws, the RBI is still seen as an institution that is uncompromising — be it with interest rates, banking regulation, currency or even bank licences. Rajan, who will be India's youngest central bank Governor, will take over at a time when the communication between the government and Mint Street's top man has almost broken down. Only a rupee collapse helped a patch up. Finance minister Chidambaram and Governor Subbarao have had public spats in the past few months, which has not helped anyone's cause. The foremost task is to be on the same page, but that will be inviting trouble for Rajan's credibility if the government continues with its imprudent policies...........
Will Rajan the Intellectual Survive Rajan the Governor?
Most
things that Raghuram Rajan has argued for over the years are contrary
to what the UPA wants in its monetary policy now. That’s his key
challenge................
Rupee makes dramatic recovery on Rajan's appointment as RBI chief
The Indian rupee made a dramatic recovery after the government announced the appointment of Raghuram Rajan, the chief economic adviser in the finance ministry, as the next governor of the Reserve Bank of India. The partially convertible rupee not only erased all losses, but ended higher at 60.77 per dollar as against Monday's close of 60.88. The rupee traded at 61.45 before the announcement of Mr Rajan's appointment...............
Rajan on a High, Re at a Low
.....Rajan
now faces the delicate task of giving a sympathetic hearing to the
government’s growth concerns without compromising RBI’s functional
independence. It is also likely that Rajan may reform the 78-year-old
institution, making it more democratic in terms of monetary policy, as
is the case in developed countries. In the process, he may have to
dilute some of the extraordinary powers of the Governor..............
Sorry and Thank you Mr. Subbarao
I write this with a single purpose in mind - to apologize to Subbarao, present RBI Governor. Though I do not 'take back' or anything I wrote but my perception of his working was clearly wrong, and has been wrong for at least past few quarters. This post in that sense is an acknowledgement of my views offline, into the same pages that I used to disparage him in past. The long story short,.......................
A Bheeshma Facing Abhimanyu’s Fate
.............Though
he has not intervened to stem the slide directly, he had to intervene
by raising interest rates. The measure appears half-hearted. He wanted
rates to rise, but did not say so. A reasonable guess here could be that
he did not touch the repo rate because the government persuaded him not
to do so since it would be seen as a reversal. It is hard to believe
that someone without conviction could bump up interest rates by 300
basis points in the market, but did not want to say so. The absence of
clear communication is a double whammy. It has not helped the rupee, but
damaged the fixed-income market. Subbarao said, “There will be
consequences for this. There will be pain in the economy. Somebody will
have to bear the cost for this. Those costs are inevitable and
unavoidable.” Many of his actions may not have reflected his thoughts,
but most of his thoughts reflected the reality. The 2010 speech shows
that unlike Abhimanyu who was trapped in the chakra vyuha, Subbarao knew
what he was getting into.
Subbarao, man who fell into cauldron of woes
....For Duvvuri Subbarao it was baptism by fire when he took over the reins of the Reserve Bank of India nearly five years ago. As soon as he stepped into the corner office at the central bank headquarters in Mumbai's Mint Road, a tsunami struck the global financial system. The force of the 2008 global financial meltdown meant that RBI had to call on all its resources to shield the economy from being brutalized. ...........
Why does Chidambaram not get Subbarao?
As D. Subbarao begins his last month as the 22nd Governor of the Reserve Bank of India (RBI), it is time to take stock of his tenure. A vital aspect of this was his relationship with Finance Minister P. Chidambaram. The intense media speculation about differences between the two amounts to more than analysing the equation between two individuals. It encapsulates an important challenge India faces in monetary policy making. Two markers will give a sense of what happened during the Subbarao governorship...........
Inter-school quiz
.......Speaking at the inaugural, Dr Sujatha Elizabeth Prasad, Banking Ombudsman for Tamil Nadu, Puducherry and Port Blair areas from the RBI, shed light on the working of the RBI and gave the students a few tips on how to safeguard their bank accounts through fair transactions. Hari Krishnan, General Manager (Banking), and S Venkatesan, Deputy General Manager (Human Resources), from RBI Chennai, were among the dignitaries who inaugurated the quiz.................
Impossible trinity
..........Impossible trinity or trilemma in monetary policy means that a country cannot have a fixed exchange rate, free movement of capital and an independent monetary policy at the same time. As it happened in India, after lowering interest rates over the last one year, RBI went ahead to protect the rupee by sucking liquidity out of the system, which has resulted in higher cost of money and higher interest rates. From a pure monetary policy standpoint, RBI had no intention of raising interest rates. In fact there was a case to cut policy rates to support growth, but while targeting currency it lost a bit of control on the monetary policy,which resulted in higher interest rates..............
RBI is behaving like a football goalkeeper
A former Governor of the Reserve Bank of India (RBI) once told me that in a “moment of crisis the central bank can’t be seen to be doing nothing” even if “do nothing” might be the best strategy to follow. This might well be the spur behind the RBI’s recent defence of the rupee.................The curious case of two indices - Renu Kohli
....RBI is grappling with two issues here. The first being statistical reliability of the new CPI. The second issue is its divergence from WPI. An early adoption raises the probability of policy errors from erratic data points in a short time-series. The latter could potentially shift the yield curve upwards, to the detriment of growth. RBI’s official position on the former is to wait for statistical robustness checks before formal adoption. Its response to the more crucial second issue of WPI-CPI divergence has not been publicly articulated.........
Turkey lira defense a lesson for India
LONDON (Reuters) - If the Reserve Bank of India wants some pointers on how to lift the rupee decisively off record lows, it could try asking Turkish central bank governor Erdem Basci. The rupee tumbled to a new record low against the dollar on Tuesday, raising the stakes for the RBI, whose stop-start currency defense strategy is widely seen as inadequate............
Phishing fraud is back; you have got fake mail from Reserve Bank, I-T authorities
..........Another scam involves the impersonation of outgoing Reserve Bank of India Governor Dr D Subbarao. An e-mail purportedly sent by RBI offers to transfer $12 million (approximately Rs 72 crore) to the receiver's personal account. A Madhya Pradesh resident paid thousands of rupees after hearing that "Subbarao had met United Nations secretary general Ban Ki-moon to release funds". RBI spokesperson Alpana Killawala said they had been running a multi-pronged awareness campaign to alert people to this fraud. "We have messages scrolling on our website www.rbi.org.in and are running four spots on FM radio. We have also inserted advertisements in 13 languages in 800 newspapers," she said............
A Licence to Print Money in Underbanked India
If the Ministry of Finance has its way, and if the Reserve Bank of India does not drag its feet, some time next year, you would be able to choose from a wider range of banks. Will this change anything for customers? Will the new banks succeed? The short answer to these two questions is No and Yes. Here’s why.................
Read - Forbes India
Read - Forbes India
Three questions on India’s economy
........Three questions should be salient right now. First: What is the rate of economic growth that India can currently sustain without sparking off high inflation? Second: Why is the rupee losing value against the dollar? Third: What is the correct level of interest rates given the current economic situation? The answers could help us get a bit more clarity on what the policy response should be..............
Nabard wants co-ops to understand reality
National Bank for Agriculture and Rural Development (Nabard) chief general manager R Amalorpavanathan said here on Tuesday that primary agricultural cooperative societies (PACS) should understand the emerging reality in the banking sector and initiate urgent steps to keep themselves in the mainstream. He told a news conference here that the RBI and the Union government had the responsibility to evolve a safe and secure payment system in the country and the RBI directives were aimed at better services to all bank account holders, including farmers.........
RBI to restructure loans in disaster-hit areas of U'khand
The Reserve Bank of India (RBI) has started taking steps to provide relief to the disaster-affected people in Uttarakhand by restructuring loans for one year period. Confirming this, the Allahabad Bank CMD Shubhalakshmi Panse today said she has received a letter from the RBI for “restructuring” of loans in the disaster-affected areas of the state. “I have received a letter from the RBI regarding restructuring of loans in the disaster affected areas”, she said after handing over a cheque of Rs 5 crore to Uttarakhand chief minister Vijay bahuguna for disaster relief works.............
Tuesday, August 6, 2013
Own goals, broken limbs and band-aids
It has been anything but a boring summer for Indian policy makers. The preference for a desperate orthodox (IMF-style?) interest rate defence of the rupee hints that they have been feeling the heat despite the cooling effect of a good monsoon. It also suggests that they are running out of lasting, non-disruptive and inexpensive options. Ironically, in their efforts to lower speculation, supposedly behind the rupee's recent collapse, poor communication and the convoluted implementation have given rise to higher uncertainty across asset classes. Confusing signals from the government and the central bank have only made the actual defence weaker............
Don’t kill the messenger, read the message
....The NDF markets are outside RBI’s jurisdiction, and no manner of domestic restriction will diminish their existence. Markets are messengers of underlying problems, not the cause. If drastic measures are on the table, why not temporarily ban gold imports instead of murdering the economy?..................
Tightrope over crisis
......The RBI's liquidity stance is a poor response to a flawed need to defend the rupee. But it could prove to be very strong medicine for the banking sector. On the one hand, lack of liquidity would prevent ever-greening of sticky assets and this should flush NPAs out of the system. On the other hand, the tightening would make it very difficult to support any resurgence in credit demand and that is bound to adversely impact growth. And, of course, a combination of low liquidity and falling equity valuations makes recapitalisation almost impossible in the short term. Every bank will have to contend with higher rates, sluggish credit growth and dodgy asset quality; but public sector banks will be especially stressed given their much higher exposure to bad loans..........
Economy Mimics Parliament, it Goes from Bad to Worse
.........“All
policy announcements made in the past year have not added any material
impact to the actual activity on the ground. The situation is dim and
there is no reason for optimism, be it in consumption or investment,”
Sabnavis said. Leif Eskesen, HSBC’s chief economist for India and
Asean, called for pro-growth measures from RBI. “While RBI has to cater
to the currency at the moment, it will eventually need to cater more to
growth as economic activity continues to soften,” he said..........
RBI, FinMin meetings lined up to tackle CAD, volatile Re
........"The FSDC sub-committee will meet on August 7. Developments on the rupee front and the CAD are some of the main issues on the agenda," said a person close to the development. The meeting, which is scheduled to be held in Mumbai, will be chaired by Reserve Bank of India Governor D Subbarao and will be attended by senior finance ministry officials including secretary, department of economic affairs Arvind Mayaram............
RBI survey reveals most victims of emu farm scams were literate
..............Though Erode had witnessed similar financial frauds previously, people were less concerned about the risks involved. The greed for easy money overpowered objectivity and reasoning of even the educated class in the region,'' said RBI Chief General Manager V Vasanthan, who supervised the survey. Vasanthan and senior RBI officials were in Erode on Sunday and Monday to create awareness among women self-help groups and various farmers' bodies about fraud schemes. RBI has plans to conduct similar programmes across the state to make people aware of the risk in investing in financial institutions with questionable credentials, offering unrealistic returns..............
Law ministry says e-KYC valid, FinMin writes to RBI to issue notification
........ “Ministry of Finance has sent the letter to RBI and other regulators such as IRDA and SEBI so that a notification can be issued after which banks and other financial companies can start using e-KYC,” said the official. The person added that the letter was sent, “a couple of weeks ago.” The use of e-KYC will not only speed up linkage of bank accounts with Aadhaar for the ongoing Direct Benefits Transfer project but will also save banks huge cost incurred in document verification and storage, the official said...............
Release of RBI History Volume 4
"RBI History Volume 4" will be released by the Prime Minister Dr.Manmohan Singh on August 17, 2013 at his residence 7, Race Course Road, New Delhi. The volume covers the period from period 1981--1997. The Advisory Committee which guided the preparation of the book was headed by Dr.Bimal Jalan. I am happy that the publication is in two parts unlike the previous volumes--which are fat and difficult to handle. I had written to RBI to bring it out in two volumes quoting the eloquent Winston Churchill Story. When Winston Churchill was presented a fat book for reading he declared - "This is the sort of book I will fling away with all the force at my command." I requested them to bring out the History in two volumes. I have given in writing too.
The volume is priced at Rs.2195/-. To date RBI has published three volumes of its History -
Volume One ---1935--1951
Volume Two----1951--1967
Volume Three--1967--1981
- P.P.Ramachandran
The God’s Own Country - Uncertain Priorities
.......Reserve bank of India Deputy Governor Gokarn’s was a lone sane voice amid the caucus noise and the fury created by the indoor festival that was “Emerging Kerala” in Kochi. He said that the state should exploit the inherent strengths while planning for economic development. Kerala has the potential to develop at par with some of the developed countries!................
Obituary
Mr. D. Balaraman (82) years, Retird Dy. Treasurer, RBI Chennai died on 03/08/2013. Phone: 9445402609.
Hindu
Don't forget to file returns
...........If you delay filing returns, your tax refund process could be delayed. There are chances you could get an enquiry letter from the department. You might also have to forfeit the interest on the refund pending for the period of delay in filing returns. If the refundable amount is more than 10 per cent of the total tax payable, you are entitled to a simple interest of 0.5 per cent on that amount. Filing returns has benefits................
RBI circular could trip Holcim-Ambuja deal
....The RBI circular says that companies must inform the RBI of investments made between February 13, 2009 and the date of publication of the FEMA notification, that do not conform to the “regulatory framework now being prescribed.” The wording suggests that each of the conditions included in the RBI notification will be applicable retrospectively. However, experts feel that since the DIPP Press Note did not prevent downstream investments via an operating-cum-holding company, the RBI may not insist on this clause be applied from 2009 onwards..........
Rupee Rampage
...........The Government has been trying to force close this yawning gap — it’s become a lot more difficult, not to say expensive, to import gold these days — but foreign investors aren’t impressed. The RBI, for its part, has been trying to make the rupee scarce. It has been progressively flushing out excess reserves from the economy to give the currency more staying power. Bankers say there is an urgent need to raise import duties on costly and non-essential imports such as mobile phones, apples, olive oil, and toys to stem the outflow of dollars. As the RBI on Shahid Bhagat Singh Road in Mumbai and the mandarins at the Finance Ministry in New Delhi’s sandstone-coloured North Block struggle with plans and strategies to stabilise the yo-yoing rupee, middle-class Indians are, now more than ever before, anxiously watching the rupee ticker on TV...........
Decoding the street lingo of investments
As the Reserve Bank of India and the government's statements on the rupee show, fuzzy language contributes to fuzzy thinking and policies. Linguists and psychologists say that language influences thought and perception. This is supposed to be so at the level of the language itself (say a Japanese speaker thinks differently from a Spanish one) but also within a language, depending on the kind of words and phrases that one chooses.........
Govt to tighten laws defining genuine and Ponzi schemes
..........Sachin Pilot, minister, corporate affairs, said that the centre and state governments must work in together with the Reserve Bank of India and Securities and Exchange Board of India (SEBI) to ensure that the issue is addressed at the earliest. “We need to address the issue of Ponzi schemes and it is essential to protect the money of small investors,” Pilot said............
RBI steps, if prolonged, could pull down GDP growth: BofA-ML
..........Stating that it sees the RBI reversing its tight liquidity measures only by October, the brokerage said if that does not happen, it "will adversely impact credit pick up in the busy credit season that begins from October to March, thereby having consequences on the growth front". It said that in 1998, the then RBI Governor, Bimal Jalan, had reversed similar measures undertaken, in eight weeks. "GDP growth can go down to 4.8 per cent, lower than 5 per cent last year, if the lending rates go up as a result of the RBI steps," BofA-ML said...................
The collateral damage to banks from RBI
The last time the Reserve Bank of India (RBI) resorted to liquidity tightening tactics to shore up the rupee in 1998, the measures proved successful and were rolled back in two months. That does not seem to be the case this time around. If the central bank extends its latest measures beyond a couple of months, there will be collateral damage in the form of squeezed bank margins and lower earnings...............
My pension is better than yours, FM tells labour ministry
...........The National Pension System (NPS) is run by the finance ministry, with no contribution from the government or any guaranteed benefits to subscribers. The Employees’ Pension Scheme (EPS) should be wound up or “grandfathered”, said Finance Minister P Chidambaram in a letter to former labour minister Mallikarjun Kharge in August 2012, according to a person in the know of the development............
Lessons for senior citizens from slump in debt mutual funds
.......The negative returns in debt mutual funds in the last two months have generated anxiety among investors, and more so among senior citizens. This phenomenon of returns being eroded overnight is usually associated with the equity asset class. The same phenomenon being witnessed in the so-called safer asset class — debt mutual funds — is new. Does this mean that you shun it. This is the easiest and simplest move. But this move could have long-term negative repercussions. Now is the time to revisit your debt portfolio..................
‘Microfinance sector heading towards consolidation’
......MFIN CEO Alok Prasad said the RBI should create a separate class of banks which cater only to micro finance. “You cannot have universal banks catering to a wide spectrum of customers, ranging from corporates to those at the bottom of the pyramid. Banks with a micro finance focus will be better meet the financial inclusion needs of the economy,” he said.............
Why India's Corporate Bigwigs Want to be Bankers
.......In short, if you’re smart, banking is among the best businesses to be in. There’s an outlier to target, and there’s the sloppy public sector to snatch business away from. The paradox this time around is this: Banking appears to be both the best and worst business to be in..............
Subsidiary norms for MNC banks soon: RBI
..........Choosing to operate as branches, most multinational banks have gone slow on conversion to avoid huge tax liabilities that come with operating as a wholly-owned subsidiary in India. "From a policy perspective, we are into setting up wholly-owned subsidiaries for foreign banks," RBI Deputy Governor Anand Sinha said in Mumbai. "When that happens, as per the discussion paper that we have issued, would be almost at par with the domestic banks in terms of almost everything, including branch expansion." The Deputy Governor, however, did not offer a timeline for issuing the guidelines............
All applicants must comply with new bank licence norms: RBI
...........“They (applicants) have been given a transition period, so we expect them to comply with all the requirements... All applicants have to meet our (RBI) standards and that is all I can say right now,” said Sinha on the sidelines of a financial inclusion conference organised by industry body FICCI. With regard to a special consideration for India Post or dispensations of few applicants, Sinha said the RBI is in the process and looking at a committee. “The committee’s work will start once the internal scrutiny is over...It will be premature to comment on it. It is only after the scrutiny that we can take a definite view on India Post or the dispensation that has been sought by applicants.”............
Finance ministry asks India Post to reroute bank proposal
........“Since the proposal has financial consequences, we have told India Post to first approach the expenditure finance committee with their proposal before going for an inter-ministerial consultation on the matter,” said a finance ministry official who didn’t want to be named. A second finance ministry official confirmed this. He said the expenditure finance committee was yet to receive the note from the postal department. He said, however, that the committee was likely to clear the proposal once it’s received. “We cannot pre-empt how much money EFC will approve, however I am sure the proposal makes sense because they have such a vast network which they should utilize. The only thing is they have to develop the standards to meet the RBI guidelines,” he added.............
Financial Inclusion is an Opportunity: BR Shetty
............We see the challenge of financial inclusion as an opportunity. As a leading global remittance brand, we have been dealing with a huge population, which belongs to the bottom of the economic pyramid. Most of them still go without a bank account. We are good at initiating workshops and other means to create awareness and improve financial literacy in the said population. Once we become a bank, we will work on the same principles. We will be focusing especially on opening branches in unbanked areas and on designing innovative products for this segment...........
‘How will four-five more banks help inclusion?’
.........We
don’t need new banks. We need better-run banks that are better
capitalized. We have enough consolidation to do in our own banking
system. Look at the urban cooperative banks and NBFCs. If we don’t have a
path to consolidation, fragmented further by issuing a few new
licences, I don’t see how that helps the capital or inclusion needs of
the economy. With four or five more licences, how does it help
inclusion?...........
Union Bank bags IT Excellence Awards
Bank’s CMD D. Sarkar and General Manager (IT) Ajit Kumar Rath received these awards from RBI Governor Dr. D. Subbarao in the function conducted by IDRBT, the wing of RBI on Friday here. For FY 2012-13, Union Bank of India won “Best IT Team” award from IDRBT. This award recognised and honored Bank’s IT Team as the Best IT Team amongst all Public Sector Banks..........
Karnataka Bank gets banking technology excellence award
MANGALORE: City based private sector bank -Karnataka Bank Ltd has bagged the coveted IDRBT Banking Technology Excellence Awards for 2012-13, among 'small banks', under the following categories: Best bank award for managing IT risks; and best bank award for use of IT for business innovation. D Subbarao, Governor, Reserve Bank of India presented the awards at a function held at Institute for Development and Research in Banking Technology, Hyderabad...............
GOVT SEEKS RBI NOD TO REVIVE URBAN COOP BANK
In a bid to revive the defunct Bhubaneswar-based Urban Cooperative Bank (UCB), the State Government has sought approval of the Reserve Bank of India for an effective takeover of the management of the bank by the Chennai-based Government Telecommunication Employees’ Cooperative Society (GTCECS). Secretary of the Department of Cooperation (DoC) Bishnupada Sethi is trying hard to revive the ailing UCB. Earlier, the State Government had tried to rope in the COSMOS Bank to revive the UCB, but the move failed due to various reasons...............
Cooperative bank employees federation plans nation-wide strike
.........The RBI order will reduce these PACs to mere deposit collectors on behalf of the Central Cooperative Banks. It is unfortunate that such an established rural financial intermediary system is on the verge of being wiped out, Balakrishnan lamented...................
Steps for Cooperative Banks in India to Start Becoming RBI KYC Norms Compliant
..............Cobrapost’s exposes’, CBI’s revelations and RBI ongoing investigations should be reasons enough for cooperative banks to tighten their Know Your Customer (KYC) compliance process, by undertaking above mentioned 3 definitive steps. Cloud based KYC compliance tools adoption could easily ensure RBI mandated regulatory compliance, without any capital expenditure in hardware or software. Unlike larger financial institutions, cloud based compliance solutions are ideally suited for India’s cooperative banks, since only cost that such smaller banks need to incur is highly affordable pay-as-you-go subscription fee.
RBI pulls Dhanlaxmi Bank for rise in bad loans, appoints Manoranjan Dash as director on bank's board
.........Jayakumar, however, assured that the bank has a good recovery and monitoring mechanism supported by technology. Talking of Dash's appointment, he said that this was nothing new. "It may be noted that the appointment of Dash is not a new measure taken by RBI, but only as a replacement of Rohit Jain who was the RBI observer on the board. There has been representation of RBI on the board for quite a long time now," said Jayakumar.............
YES Bank: No headway in attempts to settle case out of court
......“There was no conclusion at the meeting. Though Rana Kapoor came with the intent to resolve the dispute, he did not agree to recognise our joint right to nominate a director on the bank’s Board as Indian Partners,” the person said. YES Bank spokesman did not confirm or deny the meeting. “As the matter is subjudice, we will prefer not to comment on your queries,” the spokesman said over the phone...................
Praful Patel now pitches for import duty cut on power gear
NEW DELHI, AUG. 5:
Heavy Industries Minister Praful Patel appears to be running with the hares and hunting with the hounds. After making a pitch for increased protection for the domestic power equipment sector, and even getting the Reserve Bank of India to withdraw external commercial borrowing facilities in Yuan to help stop the flood of cheap China-made power generating equipment, he has now switched tracks. He wants the Government to now..........
1984 riots: plea to revive loan subsidy scheme
An organisation fighting for victims of the 1984 anti-Sikh riots has demanded the revival of the scheme of extending bank loans to affected families at 1% rate of interest. The scheme had lapsed in 1998. "We have been pressing the union government to take up the matter with the Reserve Bank of India as there are many cases in which families did not get subsidy under the scheme,".........
Monday, August 5, 2013
Millions of notes not printed in mints land in RBI vaults
..........Take the Rs 1,000 notes. The redesigned bill was introduced in October 2000. Ever since, the two authorized mints — Bharatiya Reserve Bank Note Mudran Private Limited, Bangalore, and Currency Note Press, Nashik — have printed a total of 4,452.3 million Rs 1,000 bills. But RBI records show that it has received 4,462 million notes, an excess of 9.7 million notes. That means the RBI has received Rs 970 crore more than what was actually printed...............
Changing the Industrial Geography in Asia
........The book under review is the final volume in a series on East Asia’s prospects that has been cosponsored by the Government of Japan and with the support of the World Bank. The focus of this volume is on China and India — the prime movers who will play a dominant role in the coming decade. The changes in industrial geography as also trade – patterns since the mid-1990s have been spectacular. The analysis in this volume is based on the thermodynamics of industrialization with special emphasis on trade, foreign direct investment and building up of technological capabilities..............
Read - FPJ - Book Review by P. P. RAMACHANDRAN
IN LIGHTER VEIN...............
My View on "RBI Governor resigns"
IN LIGHTER VEIN…As one who has been supporting an extension for Dr Subbarao as Governor beyond September 5, 2013, this is good news for me. As an insider, he would have been at best considered for a one year extension. Now that the ‘RBI employee tag’ is removed, he becomes eligible for being considered for a fresh tenure of minimum 5 years from September 5 as I heard he has already expressed his willingness to continue as ‘caretaker’ till that date. As the selectors are all above 65, getting over the age-hurdle will not be a problem. Meanwhile let us share one full pack of CHARMINAR, if (Statutory Warning: smoking charminar is injurious to health of those who do not smoke) it is still available in the market !
- M.G.Warrier
The impact of Subbarao's resignation on the banking sector should be considered by Central Board of Directors in its meeting to be held on August 8, 2013 over Hyderabadi Biryani. Will the signature dish from Andhra still be called Hyderabadi Biryani or renamed? What will the Biryani from Seemandhra or Rayalaseema be called? On the Charminar at Hyderabad, one Minar should exclusively belong to Seemandhra and Rayalseema each and two may be appropriated by Telangana as a memento. Hope Subbarao must have used his powers to unilaterally issue orders on PENSION UPDATION before tendering his resignation.
- Sitendra Kumar
The next RBI governor
..............In India, there is no debate on the candidates’ academic or policy credentials. The government wants it that way. It is not the actual framing and conduct of monetary policy that matters most: a potential Governor’s most important qualification today is........
Next RBI Governor - He K(h)an make it...........
My View on Next RBI Governor - Why not insider?
I wholeheartedly endorse the views expressed by Mr. Unny. At this time of crisis the need of the hour is an insider to guide the RBI on the path. The Govt. Has experimented with foreigners, ICS, IAS, Economists et al. Some fared extremely, some so so while some failed to make a mark. So why not give an insider a chance? Of the present DGs the name that comes to my mind is that of Mr. Khan. He has the necessary academic qualifications and rich experience the bank. He would be an blend of youth and experience as well as pragmatism. The above views are of course without disparagement to the three Deputy Governors.
- B. Kamath, Retd. CGM
Sign of winds of change.............
Now that DMD's post for NABARD has been advertised for which, inter alia, eligibility is as follows;
CGM of NABARD, SIDBI, IDBI = Joint Secretary of Govt of India = GM of nationalized banks. RBI is nowhere. Does It means CGMs of RPCD lack the requisite worth? A few days back Chairman's post of NABARD was advertised. Earlier,
CGM, HRDD, RBI used to be the Secretary of Search Committee for
selection of CMD of NABARD. Now what happened? RBI is completely out of
picture. When
Subbarao became GUV 5 years back, simultaneously, Chairman of IRDA
(Hariharan IAS), NABARD (Sarangi IAS), SEBI etc etc were appointed by
administrative fiat. All
regulators were brought under IAS domination. Now IRDA has been given to
Shri Vijayan, LIC man and NABARD is set to get a specialist. SEBI is
under a long back retired IAS. Even for RBI, non IAS are in race. Sign of winds of change clearly showing dissatisfaction with IAS.
- Sitendra Kumar
Janki Ballabh resigns from UTI
..........A source said Ballabh's move might be part of a restructuring exercise to fill the non-executive chairman's post. Earlier, Ballabh was chairman, State Bank of India. He had also held the posts of vigilance commissioner in the Central Vigilance Commission and chairman of the Reserve Bank of India's services board and its advisory board on banking, commercial and financial frauds..................
Should India float international bonds?
............The immediate need is to strengthen the reserves and arrest the depreciation of the rupee through the inflow of capital. There have been talks about floating a sovereign bond in international markets. If the purpose is to augment the reserves, whatever resources the country raises will be added to RBI's kitty. It will be invested in low-yielding treasuries of foreign governments and deposits of international institutions. The net outgo due to the difference between interest paid and investment income will be a drain on the forex resources. There are legal problems in floating bonds in the US limited to non-resident Indians (NRIs). And that is the country where there are a large number of high net-worth NRI professionals looking for good yields. At his post-policy meeting with the press, the RBI governor mentioned his reservations about floating a sovereign bond..............
Winning back credibility
..............All sorts of theories are going around as to why the markets tanked. The ‘dovish’ tone of the policy is interpreted as a sign of weakness, leading to a sell off. On the other side, there is disappointment that the RBI has done nothing to stimulate growth even though it lowered its growth forecast. The RBI should strive to regain credibility to win the battle for a stable rupee.
Tail wagging the dog
..............The Reserve Bank of India (RBI) fought the currency shock with an interest rate shock. While this textbook response may work when financial markets are efficient it is not the case in India today. As such there is a risk that the negative effect of RBI’s measures on financial market stability and economic growth may far outweigh the beneficial effects, if any, on currency stabilization. Indeed, the debt and money markets have already been thrust into the whirlpool...................
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