.... Unless and until banks introduce a self correcting mechanism through grading of borrowers and levy a penalty based on poor rating in the conduct of loan accounts, this menace of NPAs will be a burden on tax payers, and all other stakeholders of banks and the economy. In this context, the practical suggestion given in the book on Management of Non performing advances which carries a foreword from Dr C. Rangarajan former Chairman 12th Finance Commission and present Chairman, PMEAC is worth an attempt...............
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.
Saturday, September 7, 2013
SBI Banks may mop up $5 bn from NRI fund swap facility: SBI Report
An SBI research report today said banks are likely to net USD 5 billion by March, 2014 by availing RBI's special window facility to swap foreign currency non-resident (FCNR) dollar funds -- half of what experts from foreign brokerages have initially estimated. Yesterday, analysts from global financial majors like Morgan Stanley and Bank of America-Merill Lynch had projected that lenders would be able to garner up to USD 10 billion through this route.........
Tirumala gold in safe hands, says TTD EO
The Tirumala Tirupati Devasthanam (TTD) Executive Officer M.G. Gopal on Friday categorically said that the gold being deposited into the temple hundi by the visiting devout is absolutely safe in the hands of the management. Talking to media persons Mr. Gopal ruled out reports in a section of press which stated that the Reserve Bank of India (RBI) had reportedly asked the management to part with its gold deposits as part of its efforts to strengthen the plummeting rupee value........
Concern over RBI's reported move to take over temple gold
...........Raising the matter during Zero Hour, K N Balagopal said the Reserve Bank of India had reportedly sent a letter to temple boards in Kerala seeking gold reserves in state's temples. He said RBI's move proves that the government has become a "pauper" and if they are planning to take over the gold, the antique value of the precious metals in the state's temples should be calculated. When he raised the issue, M Venkaiah Naidu (BJP) said such a move was not acceptable.........
Friday, September 6, 2013
First term at Monetary Towers - Dr.S.S.Tarapore
Governor’s first day
New man on Mint Street
.......Unlike the RBI Governors of the past, in the age of 24x7 television and instant communications, Rajan will have to make the RBI functioning transparent and people- friendly. Opacity of the central bank operations when it speaks only to the finance ministry spooks markets. Rajan, with his easy communications skills and his first- rate academic credentials, has his task cut out. He will have to guard against being lovey- dovey with the finance ministry mandarins. Bureaucrats and bankers should learn to co- exist but not encroach on one another’s toes..........
Walking the talk?
......At Raghuram Rajan's first press conference, however, Executive Directors and Deputy Governors preceded him into the hall and the new governor walked in unaccompanied a little later. A change of style with a change of guard?
Well begun...
.........There is very little in the extensive plans that Dr Rajan laid out in his speech that can be questioned in terms of merits. Ultimately, by the end of his term, he may accomplish some of the objectives that he articulated and may fail on others. But it is reassuring to know that he starts his term with an equal emphasis on the immediate situation and on the structural changes that the entire financial system needs to make.............
Taking guard
Raghuram Rajan's first move as India's monetary czar has been to solemnise a marriage between a needy country and its greedy diaspora. That's the easy part. Tackling the gruelling Indian stagflation will be the real test for the former International Monetary Fund chief economist...........
More fresh air
........ but it is equally likely that it was a Rajan effect, a consequence of the fact that Dr Rajan is smart, relatively young, and brings new ideas to an institution that some thought had begun to labour under the weight of its own history and precedent. Dr Rajan's comprehensive opening statement and his commitment to communication made a good impression - as did his forthright manner and the way that he expressed his willingness to take unpopular decisions, saying that he was not in the job to earn "Facebook likes".........
Promising start
....Rajan has said that he expects close co-operation and co-ordination with the government and the call should not go unattended. He has also spelt out plans to improve the monetary policy framework, strengthen the security market and move fast towards issue of new banking licences. While stressing the need for banks to clean up their balance sheets he has also warned major defaulters of loans of strong actions.These do not make a comprehensive agenda. But the fact that he has spelt them out, unusually for an RBI governor on the first day of his office, shows that he thinks they are matters that need urgent attention...........
Into the pressure cooker
.........If anything the pressure may flow in the other direction, with Mr Rajan having to defend the RBI’s independence. The government wants the RBI to give bank licences to well-connected tycoons; Mr Rajan, sensibly, opposes this and wants more small banks to be created. Official proposals are circling to put monetary policy in the hands of a new committee dominated by external government appointees, and to give the finance ministry, not the RBI, authority for financial stability. Mr Rajan should fight both suggestions. India is lucky that Mr Rajan is in the RBI job. He will be a bulwark against populism and an advocate of liberalisation. But his hardest task is to avoid being labelled a saviour..........
Accolades for VITALINFO
Dear Mr Tarambale,
It is
indeed a pleasure to read the accolades you are getting for the fantastic work
you are doing. Congrats. Keep it up. I had the good fortune to have worked with
you. I found you always more than equal to the task and very sincere in
tackling whatever was assigned. It was also a pleasure meeting you personally
at Pune last month. Good luck and God speed.
- B K
Katyal, Ex Chief General Manager
Excellent.
Congratulations. You get this appreciation because you deserve it. This is
the appreciation of your dedicated work, from respected Sir Tarapore. It's
great. Keep it up.
– Raghu
Gujar, Ex-PS
Congrats! It is very creditable for you to receive such
remarks, good words from Dr.Tarapore. Carry on your good work!
Wish you all the best.
- G.K.Kirloskar, Chembur, Mumbai -71
Congrats! You deserve
it as rightly said by Dr Tarapore. Kudos to you.
– R.K.Sunder,
Ex-PS
Dear Tarambale,
This is to request you to kindly include in your email address Mr P.R.Gopal Rao our former Executive Director. He is very keen to have your VITALINFO blog and he was excited when I informed him about this and its utility.
- Dr. T.V.Gopalakrishnan
‘Unlearn’ the IMF lessons
Dr Rajan, as is evident from his academic and professional record, is a fast learner and capable of finding solutions to the toughest of economic and monetary problems. His challenges lie in (a) how fast he will be able to ‘unlearn’ the IMF lessons which were modeled with prosperity of the developed world in view and (b) how quickly he will get convinced about the historic dual responsibility of RBI to ensure distributive justice while supporting economic growth and reframe his arguments to convince North Block that after all RBI has been on the right path and what the central bank lacked was the support from GOI. Inside Reserve Bank of India, Dr Rajan will get a more accurate feel of the role played by RBI since its inception in the evolution of the financial system to meet the country-specific needs. The changed perception will also tell him why the cut and paste FSLRC report is not finding favour inside RBI.
- M.G.Warrier
The maiden speech is a set of good intentions, outspoken like his predecessor, with an action agenda.The two goals of making financial inclusion stronger and having the MSME sector and Agricultural Sector having their due share in credit flow had their policy roots strong earlier. It remains to be seen as to how he would trigger lending in these two areas when the primary lenders consider them as high risk, no matter whatever confidence measures you provide. How he can influence the government to stop announcements regarding interest waivers and loan waivers that have eroded the confidence in these sectors, will be the key to the success. Regarding Financial Inclusion, when the grassroots institutions like the PACS that outnumber rural branches of all scheduled banks, around 97000 are sought to be taken out of the mainstream how the agenda of FI can be fulfilled with the required speed? These are tough areas on his radar. There is internal resistance and external ambivalence in the pursuit of this agenda.
- Yerram Raju
Vannila reporting
My View on "Institute of Actuaries of India expels R Kannan..":
The reporting in TOI is a real vannila reporting without any information on why this extreme action of expulsion of such a senior member. Who will tell why this has happened? Why this expulsion? What is the basis of slapping a token fine of Rs.5 lakh only if the financial irregularities (which may include some fradulant act also) were serious, then the authorities should have recovered the full amount of loss withe and also taken criminal action against the member. Why no information on this. TOI may need to investigate it further and come out with the truth which will expose those who had gone beyond their brief and helped him to escape with a slap of a small fine and expulsion. - S.Santhanam
Stop mocking at retirees, House tells govt
.....It also asked the government to immediately link pension with the price rise neutralisation to ensure that the pressure of inflation is not felt too acutely by the pension drawing members. It said the wage ceiling of Rs 6,500 under the scheme is in vogue for more than ten years and hence the need to enhance it to raise the pension amount.....
What has inflation come to? Go back to the movies for an answer
........In the last two decades, the loss in value of money is reflected in Bollywood too. Tens have no value. Hundreds have been replaced with tens of thousands; a lakhpati is a common man, a crorepati is middle-class. It is those with hundreds of crores (if not thousands) who are classified as rich. And, if that doesn’t tell you about inflation, nothing will. Money makes the world go around, go the lyrics to a famous song. But money that made the world go around yesterday is no longer enough today. And, that really is the crux of inflation.
India corrects error in mislabeling local firm as China-based
.....Citing the RBI letter, signed by Vandana Khare, General Manager of the bank's Foreign Exchange Department, Tien said that Continental Engineering can hereafter set up investment project offices in India in accordance with standard procedures.............
Raghuram Rajan: Man on a mission
Meet "The Guv": Rock star welcome for RBI chief Rajan
Less than 24 hours in the job and he has already been dubbed “The Guv” by a gushing Indian media and portrayed as a suave James Bond-like figure coming to the rescue of the country’s crashing currency. With the ink of his signature still drying on the oath that made him the 23rd governor of the Reserve Bank of India (RBI) on Wednesday, Raghuram Rajan, stunned investors by announcing a raft of measures aimed at shoring up the beleaguered rupee. His statement triggered a rally in the rupee and a surge in shares............
Consumer Protection: What Raghuram Rajan missed talking about
.........Mr Rajan may like to know that Banking Code and Standards Board of India was created to enforce ethical and consumer-friendly practices but the code is voluntary. Brilliant, innovative and energetic that he is, we believe that Mr Rajan will have some new thoughts on effective consumer protection in the banking sector too. We wonder when he will start articulating his thoughts in this direction.
The saviour trap
....... a big risk is that he is labelled as a saviour when India’s economic destiny is largely in the hands of its government, not its central bank. Nonetheless Mr Rajan did hype-up his speech by arguing his immediate agenda “involves considerable change, and change is risky”. That, to my mind, is an overstatement. The proposals made last night were sensible, but modest, with two exceptions. Both could transform how India works. Both are unlikely to happen soon............
Why Raghuram Rajan is no Amitabh Bachchan
..........Let’s start with inflation. As Rajan said yesterday “the RBI takes its mandate from the RBI Act of 1934, which says the Reserve Bank for India was constituted “to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.” Hence, the primary role of the RBI is to ensure monetary stability. Or as Rajan put it “That is, to sustain confidence in the value of the country’s money. Ultimately, this means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures.” There isn’t much that the RBI can do to control inflation..................
India, Rajan and the Great Man fallacy: James Saft
...........Almost more to the point, the euphoria around Rajan is evidence of the Great Man fallacy of central banking, an always foolish belief that complex events can be bent to the will of one magical civil servant. Indian markets were jubilant, and media portrayed him as James Bond, after Rajan unveiled a host of measures designed to support the rupee. Bank shares soared by 9 percent, the main Bombay Stock Exchange Sensex rose 2.2 percent and, best of all, the rupee rose by as much as 2.3 percent. Rajan's raft of measures were both clever and far-sighted............
Markets feast on Rajan recipe
......Rajan has already indicated that the central bank may over a period of time bring down their statutory liquidity ratio, which is the ratio of bank deposits that must be invested in government securities. Amid optimism over these announcements and hope that more measures would be unveiled soon, investors were seen making heavy purchases in banking stocks............
Markets dance to Rajan tune
Call it the Rajan effect. A day after he stunned everybody by announcing a raft of reform measures, the markets on Thursday enthusiastically welcomed Raghuram Rajan, the new Reserve Bank of India (RBI) governor. Stock markets jumped, led by banking shares, after the rupee firmed against the dollar on optimism surrounding the slew of measures announced by Rajan. Foreign institutional investors (FIIs) net-bought shares worth Rs 1,101 crore amid hopes RBI might unveil more steps to boost the rupee and clean up the mess in the banking system............
Why You Can Bank on Raghuram
.....The
RBI’s state now is similar to that of those giants: it can choose a
path like Bajaj did, by keeping its ageing patriarch at a distance to
remain meaningful, or be blind to the emerging needs and threats like
the Ambassador maker was and turn irrelevant. In Raghuram Rajan
arrives a new governor without bureaucratic baggage, who intends to make
the institution relevant in the decades ahead with financial
sophistication, rather than by beating the traditional safety drum.
Winds of change have begun to blow on the Mint Street......
The Central Banker in Shining Armour
.....Rajan
has the potential to transform his country’s fortunes. He has the
perfect academic pedigree and, as a financial economist, strong market
credentials. In addition, as his maiden speech as governor reminded us,
he is an excellent communicator. He quoted Kipling to close his remarks,
presumably in the knowledge that “words are, of course, the most
powerful drug used by mankind.” And, judging from his words, Rajan knows
what needs to be done.................
Will the new RBI governor be able to suit action to words?
..........But it just might be better to set realistic goals and deliver (do an Infy!) than set goals that are out of sync with ground realities and then fall short! Remember Rajan’s biggest challenge will be to manage expectations, not only about inflation and the rupee, but also on what he himself can deliver ! ............
Read - ET
As Gods Desert, Will Raghu be Market’s Ram?
..........No governor in Reserve Bank of India’s history had spoken so much,
promised so many things, and raised the bar so high for himself on the
first day of taking charge. When Bimal Jalan had passed on the baton to
Yaga Venugopal Reddy in September 2003, Reddy, the newly appointed
governor then, had smiled teasingly at reporters to quip just three
words: “continuity with change.” But these are unprecedented times and for the past few weeks Rajan had been preparing for the day..............
Here’s Looking at You, Guv
The
vibrant agenda set out by the new RBI governor addresses most of the
issues — inflation, falling rupee, etc — that have been troubling the
Indian economy. The governor agrees inflation can arise due to supply
constraints. But what can he do about it? His predecessor cautioned the
government, but the warning went unheeded. The result: inflation
continues. Mr Rajan is also against “lazy banking” (investing in
government securities), but that can be reduced if government finances improve. Again, his predecessors have advised the government to rein in fiscal deficits but the government
ignored that advice. Rajan has promised commercial banks that they need
not approach the RBI for permission to open a branch. But that
assurance comes with a rider that it should be a “well-run scheduled
bank”. If the RBI carves out all the parameters of a well-run scheduled
bank, no bank in India would qualify, and, so, the liberalisation would
remain on RBI’s books!
K V RAO, Bangalore (ET)
Raghuram Rajan and the quest for a new monetary toolbox
........The so-called approach of pursuing multiple-objectives gave operational flexibility; yet it also raised some questions about the understanding of the monetary transmission mechanism and framework in India. For example, not having inflation control as the primary objective at all times indicated the belief that inflation process is perhaps driven by non-monetary and structural factors not under the control of RBI. Lack of a consistent and clear stand on the issue of objectives of certainly contributed to spiralling inflationary expectations in the past few years. The principle of constructive ambiguity should not be about the thinking and formulation of monetary policy but about the communication..............
Bonding at the right time
Raghuram Rajan, the new Governor of the Reserve Bank of India (RBI), in his maiden speech on Wednesday made several proposals. A key one — introducing inflation-indexation bonds (IIBs) linked to the consumer price index in November 3 comes at a good time. When RBI had re-launched IIBs this June, it was linked to the wholesale price index (WPI). Obviously, retail investors were not too enthused........
Commerce department pushes new RBI Governor for priority sector lending to exports
.....Apparently, Commerce Secretary S R Rao had taken up the matter “personally” with Raghuram Rajan, who took over as the country’s central bank governor on Wednesday, urging him to notify the rules based on recommendations by a committee headed by G Padmanabhan, executive director, RBI. The report by the technical committee on services/facilities for the exporters was submitted in May, but “internal processes within RBI has delayed the implementation”,..........
RBI asks Kerala temples how much gold they have
...........The majority of temples in the state come under the five different Devasom Boards, of which the Travancore Devasom Board is the biggest, with the famous Sabarimala temple falling within its jurisdiction. RBI's Regional Director Salim Gangadharan, speaking to IANS, confirmed that a letter had been sent, but clarified: "The RBI has no plans to buy gold, and this exercise is nothing but part of a statistical exercise." ................
Siddhi Vinayak is ready to deposit gold with RBI
Though most temples seem reluctant to deposit their stock of gold with the RBI, the Siddhi Vinayak Temple at Prabhadevi has set an example by showing readiness to deposit the yellow metal with the apex bank. During the Uttarakhand cloudburst tragedy too, the temple had donated Rs 1 crore for relief operations. Some of India's richest temples such as the Tirupati Balaji, the Sri Padmanabhaswamy , the Sri Krishna Temple of Guruvayur and Vaishnodevi seem to be in no mood to deposit the treasure to ease the supply crunch and control the outflow of dollars.
At a time when nothing seems to be able to stem the Indian rupee’s decline, a novel idea to boost the currency is doing the rounds; using the tonnes of gold stashed away in people’s homes and in temples, the bank could pay them an interest for their gold, and then sell a large portion of the stock in the domestic market – thus ultimately, reducing the need to import..........
Prepaid cards: RBI allows cash withdrawal of up to Rs 1,000 per day
....The Reserve Bank said the open system prepaid payment instruments (PPIs) issued by banks is perceived to be a subset of debit cards. "Hence, on a review of the position, it has been decided that the facility of cash withdrawal at POS with debit cards may be extended to such open system prepaid payment instruments issued by banks in India," an RBI notification said.......
Oh my 'Tubthumping' Rupee
........It's one thing to advise people to not buy gold and spend less on high-end electronic gadgets. It is completely another thing to follow these jingoistic bits of economic advice in every day life where no matter what, you have to gift goodies to your relatives even if it burns your pocket, you have to have a family holiday and you have to give something special to your spouse on your marriage anniversary...........
Rupee weakness is an opportunity for Indian tourism
.....It assumes significance now when the Rupee is consistently weakening, which in effect provides a foreign tourist more bang for his buck, when they travel to India. A smart traveler knows how to get the best deal and already the travel and tour fraternity is abuzz with talks of a good winter season for the Indian tourism industry with enquiries and bookings pouring in..............
Read - ET
CPCL plans to seek RBI's nod for commodity edging
........It is estimated that on an average, the offset of exchange gain /loss on product sale is around 70% of the exchange gain/loss on crude. Basu says the company is now looking at commodity hedging through its parent IOC. “We are planning to go to the Reserve Bank of India and IOC to seek their approvals for commodity hedging, it will protect us to large extent, along with natural hedging, though not completely.”........
Banks name defaulters, but hesitate on publishing photos
What’s in a name? Not much perhaps, but a picture speaks a thousand words. Or, so it seems, when delinquent borrowers don’t take offence at their names being made public but hustle to courts to stop banks from publishing their photographs in newspaper advertisements. Until lately, banks have been publishing photographs of people who did not repay loans. At least two high court verdicts in 2006 were in favour of this practice. But, in the wake of a conflicting verdict issued by the Calcutta high court in May, banks are now confused whether they should continue to publish photographs of delinquent clients............
Thursday, September 5, 2013
Raghuram Rajan takes over: What happened at RBI?
...........Electronic media persons were lined up since 9 am to welcome Rajan. Meanwhile outgoing governor Subbarao entered the building at 10 am and greeted waiting media persons. Sharp at 11 am Raghuram Rajan entered RBI central office in a white Corolla and was greeted at main gate by all four deputy governors -- K C Chakrabarty, Anand Sinha, H R Khan and Urjit Patel. Rajan and four deputy governors walked on portico accompanied by other senior officials..............
Chennai Express Steams into Mint St
M&M boss Anand Mahindra tweeted: “He hails from Tamil Nadu. If he’s a blockbuster hit, we’ll call him the Chennai Express.” Mahindra
had a point. The first day, first show of Raghuram Rajan felt like a
central banking equivalent of a blockbuster movie opening. Yes, everyone
knew Rajan is a star. But no one expected such a dramatic script. As
the second-youngest RBI governor read out his first set of policy
interventions, even normally voluble TV anchors were at a loss for
words..............
Read - ET
Read - ET
Subbarao’s Advice to Successor: Follow Arjuna, Not Abhimanyu
Farewell, people's banker at Mint Street
MUMBAI: Economists and market participants may argue over the efficacy of outgoing Reserve Bank of India governor D Subbarao's policy measures, but the common man has reaped a bounty in terms of customer-friendly steps during his tenure. Judging Subbarao's performance based on current market conditions would be inappropriate as no other central bank chief had to face such a hostile external environment at both ends of his term..........
Outgoing RBI Governor D. Subbarao: The man who dared to disagree
Change of allegiance
My View on "D. Subbarao: The govt insider who turned rebel":
There are divergent views on the monetary policy stance Dr Subbarao had taken in different situations and his ‘change of allegiance’ once he shifted from North Block to Mint Street. But, those who have closely observed the happenings in the financial sector and in RBI during the last 5 years will not question the rationality of the steps taken by him to adhere to the advice given by Dr Manmohan Singh before he took over as Governor. As he himself mentioned last week, with the advantage of hindsight, changes in modalities like reducing the frequency of policy announcements may be made. But, it will be difficult to contest the defence he put forth for a strong and autonomous central bank (within legislative mandate) or to move away from the financial inclusion initiatives he has started. His success has to be seen in the background of the circumstances which gave the outside world a feeling that monetary policy did not get the fiscal policy support in adequate measure for political and external reasons. His successor is aware of the situation and the first task before him will be to bring the North Block on the same page.
- M.G.Warrier
Raghuram Rajan's speech upon taking office as 23rd governor: Full text
...............Before I turn to specifics, let me repeat what I said on the day I was appointed. The Reserve Bank is a great institution with a tradition of integrity, independence, and professionalism. I congratulate Dr. Subba Rao on his leadership in guiding the bank through very difficult times, and I look forward to working with the many dedicated employees of the RBI to further some of the important initiatives he started. I have been touched by the warmth with which the RBI staff have welcomed me..................
Rajanspeak: brave and reformist
Brilliant and bold. That’s the takeaway from the first day first show of Raghuram Rajan, Reserve Bank of India’s 23 Governor. Dr. Rajan’s statement is brilliant in its vision and bold in some of the measures that it contemplates. And to be politically correct, Dr. Rajan has remembered to give high priority to the subject of financial inclusion, which was the second of the six broad themes that he highlighted, next only to monetary policy...........
The Man Who Predicted World’s Future Sets Out to Correct India’s Present
...Rajan’s
arrival at Mint Street is being seen as similar to that of Masaaki
Shirakawa at the Bank of Japan last year. Shirakawa shook up a regulator
that was steeped in conservatism with unconventional methods that
turned Japan into one of the best-performing markets in the world as he
sought to make good on a promise to pull the nation out of the economic
doldrums. The new Indian central bank governor is, crucially, seen as
someone who can communicate easily with and relate to both international
investors as well as the home constituency............
Dr Feelgood takes charge
......“These are not easy times, and the economy faces challenges,” Rajan, who was chief economic adviser before being moved to the central bank, said. “At the same time, India is a fundamentally sound economy with a bright future. Our task today is to build a bridge to the future over the stormy waves produced by global financial markets. I have every confidence we will succeed in doing that.”.........
Raghuram Rajan starts with a bang
........Dr. Rajan said a panel of experts under Deputy Governor Urjit Patel will come up with suggestions on what needs to be done to revise and strengthen the monetary policy framework. While preserving the purchasing power of the rupee, he said that the RBI had two other important mandates – inclusive growth and development as well as financial stability. The governor said that access to finance is still hard for the poor and for rural and small and medium industries. ``We need faster, broad based, inclusive growth leading to a rapid fall in poverty.’’..........
Rajan hits the ground running
........"At a time when financial markets are volatile, and there is some domestic political uncertainty because of impending elections, the RBI should be a beacon of stability as to its objectives. That is not to say we will never surprise markets with actions,"..........
Good luck, Governor Raghuram Rajan
Raghuram Rajan comes to the Reserve Bank as someone who understands the world of finance — which is beyond the ken, let us face it, of mainstream economists — and has spent some time studying India's financial sector in the company of eminent practitioners to prepare a roadmap of reform. Ideally, he should focus on implementing the report. But central bankers rarely find themselves in ideal conditions and Rajan will have his hands full with the immediate task of nursing a very depressed rupee back to some state of cheer...........
Hope Raghuram Rajan will cut rates, improve credit flow: India Inc
......I think he's an excellent choice and he would provide effective leadership to the RBI. Of course, the immediate problem that he will have to deal with is the volatility of the foreign exchange market and the volatility of the Rupee.......
The road ahead for Rajan
....The task of transforming RBI into a modern central bank consists of redefining the mandate of the central bank and its functions, clearly defining the objective of monetary policy and institutions related to conduct of monetary policy, and redesigning the role of RBI as a banking regulator. These issues have been raised by a number of official committees, including the one headed by Rajan himself.............
RBI to set up panel on mobile-based payments: Rajan
....."There is substantial potential for mobile based payments. We will set up a technical committee to examine the feasibility of using encrypted SMS-based funds transfer using an application that can run on any type of handset,” he said at his first news conference after taking over as the 23rd governor of the country's central bank.............
Jalan Panel to Screen Bank Applicants
Bimal
Jalan, a former RBI governor, will head an external committee that will
screen applications for new banking licence. The announcement was part
of a blizzard of steps announced by Raghuram Rajan on Wednesday evening
shortly after taking charge as RBI Governor. New banking licences
would be issued by the end of January 2014, while the central bank is
also contemplating ‘on-tap’ issue of licences, Rajan said...........
Read - ET
‘Looking forward to see how RBI functions in coming months’
The colonial mansion on 5, ML Dahanukar Marg (formerly Carmichael Road) in South Mumbai generates as much awe and mystique as its occupant. The heritage building with spacious rooms on a two-acre prime plot, which was taken on lease from Mumbai Port several decades ago, is the biggest perk of the Governor of the Reserve Bank of India (RBI) which is not a highly paid job. Its occupant in the last five years, D Subbarao, is shifting out after a five-year long innings.........
India's Juggling Act
It would be an understatement to say Raghuram Rajan has a plate of challenges as the new head of the Reserve Bank of India. He comes into the new job as India's economy has become a collection of superlatives: weakest level for the rupee, lowest growth rate in four years and a record high current account deficit. By all accounts, he's a smart guy who was chief economist at the International Monetary Fund. At age 50, he is a young central banker who may have the vision to shake things up. So what's the main problem?............
Monetary policy should focus on currency stability and inflation management: Ex-RBI Deputy Governor
RBI permits urban co-operative banks to undertake short-selling of govt bonds
............“It has been decided to permit well managed urban co-operative banks, who are members of Negotiated Dealing System-Order Matching (NDS-OM) and have regular concurrent audit of their treasury operations, to undertake intra-day short selling of government securities,” said RBI in a notification on Wednesday.................
Advance tax payments may add to liquidity woes
..........A senior State Bank of India official said liquidity would be under strain for a few days in the run-up to tax payment date. The cost of funds will be high this time due to steps taken by the Reserve Bank of India (RBI) to keep liquidity under tight leash. Suspecting part of liquidity was being used to speculate in the rupee-dollar market, RBI began to put curb on bank borrowing through the overnight borrowing window to stem the rupee fall...............
When gold saved the day for India
To meet the unprecedented BoP crisis, the Reserve Bank in consultation with the Government evaluated a difficult option, viz., utilisation of the gold held by the Bank and confiscated gold held by the Government to raise foreign exchange resources. Even the option of selling the gold was considered. However, since it was felt that the arrangement should be temporary as well as reversible, the sale with repurchase option was considered superior and was seen as being acceptable to the Indian public............
A little safer
India's real estate sector, many fear, is unstable. Prices appear to have reached bubble territory; balance sheets look shaky; and large amounts of debt have been taken on, with insufficient amounts of real production to show for them. This has worrying systemic implications - a financial system that lends too much to a heavily leveraged sector with minimal regulatory oversight is asking for trouble. That is why the Reserve Bank of India's (RBI's) notification on Tuesday tightening restrictions on home loans is a good idea. ........
Bomb scare near RBI, Mumbai; abandoned bag found in bus
Just in: There's been a bomb scare in a BEST bus outside the Reserve Bank of India headquarters in Mumbai. Early reports indicate that an abandoned bag was found in the bus. No confirmations on what the bag held. Incidentally, RBI's new governor Raghuram Rajan took charge today.
Rediff
Tax refunds: Beware of fake apps for smartphones!
......"Filers (people who file tax returns) using them are doing this at their own risk," the department said in its recent advisory issued to taxpayers. The fake mobile applications, according to sources, use the name and purpose of I-T returns to conceal their fraud identity and promise the gullible taxpayer in sharing his or her personal details as done under the legal I-T filings system. The I-T department, over the last few years, has constantly alerted taxpayers that the department never asks for detailed personal information of any person through e-mails or any other mode of communication on the Internet.............
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