............While confirming that they have received such a letter from the RBI, top officials of some of the major temples said they were not taking any hasty decision on the matter without consulting the government and authorities concerned. When contacted in Mumbai, the RBI spokesperson Alpana Killawala admitted that they have written to these temples but clarified that "the objective of the letter is to collect data and mentioned that in the RBI statement issued on September 1, there is no proposal under its consideration (to buy gold and bullion from temples)."......
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.
Tuesday, September 10, 2013
Banks can only sell standard insurance products through branch
......The move is aimed at ensuring that lenders do not sell customised insurance products where risk assessment is more complex. It will also address various concerns of the Reserve Bank, including those pertaining to conflict of interest. RBI does not want banks to undertake new risk in the form of insurance broker...........
Defaulters, not criminals
.....There are obviously lessons to be learnt, and hopefully the committee RBI Governor Rajan has set up will have some guidelines. It is equally true the mammoth delay in government clearances has turned a large number of assets into NPAs—how do you service a power sector loan if the plant has no coal? None of this, needless to say, precludes the chances of genuine fraud. ...........
Banks Expect No Quick Fix for NPA Pain Despite Reserve Bank Warning
.........“Although
RBI governor’s statement on NPA has sent a strong signal to defaulting
borrowers, banks are facing difficulties at the field level in
implementing SARFAESI Act and taking physical possession of mortgaged
properties due to administrative gaps. This needs to be addressed first,
otherwise bad borrowers will continue to use the loopholes and make
mockery of the system,”.............
Your EMIs may not come down anytime soon
Four sets of data over the next few days — industrial output growth for July, monthly retail and wholesale inflation for August and corporate advance tax numbers — would largely determine the Reserve Bank of India’s (RBI) next move on interest rate hikes, but analysts do not expect the new central bank governor Raghuram Rajan to cut lending rates soon. So, don’t expect EMIs on your existing home loans to come down in a hurry.............
National Pension Scheme funds hit by downturn
.........Most NPS investors, including the 30 lakh central and state government employees, who are compulsorily a part of the scheme, are SIP investors and their returns should be calculated accordingly. We looked at the SIP returns of NPS funds in the past year and found that most of them were in the red............
Can you trust your bank to run your ECS on time?
.....The truth is that more often that not, banks do get the ECS part correct. But, banks could make mistake like this, after all it did happen to the customer mentioned above as per RBI data. So, what can you do, to ensure that your ECS runs on time and your bank does not goof-up? ................
Woman seeking alimony, hubby's bank fined for data theft
...........Considering the facts of the case, Agarwal in his order cited Section 43A of the IT Act and the guidelines of Reserve Bank of India which require banks to maintain the confidentiality and privacy of customers. The order states that the bank has failed to protect the private and sensitive data of the customers and also failed to provide any information about the city or the branch from which the statement was generated. The IT secretary further goes on to say that the bank has admitted that it has no mechanism to check the system logs and audit trails of internal bank staff using the system.
Monday, September 9, 2013
RBI Governor Rajan’s ordeal by fire - Dr.S.S.Tarapore
.........The RBI’s KUB Rao Working Group had recommended that a Bullion Corporation should be set up to mobilise domestic idle gold hoards. The Report was ostensibly under examination in the government and the RBI. Some press reports indicated that the Bullion Corporation was being set up. The August 31, 2013, press release by the RBI is rather baffling. It is one thing if the authorities felt that the announcement was premature and quite another if the very idea has been killed. If it is the latter, it would be a setback to rectification of the large CAD. A similar proposal was scuttled 21 years ago. If we do not learn from the mistakes of the past, we will be punished by the future. One hopes the KUB Rao Report will be seriously examined by Governor Rajan.............
Rajan’s dad proud, but says task before Governor is a challenge
........In a conversation with this writer at his sprawling old bungalow in the Indira Nagar enclave of Adyar in Chennai, Govindarajan, a sprightly octogenarian, says all those singing hosannas now can very well sing a different tune. “This is probably the honeymoon period when everybody goes gaga; we have to see.” But the retired diplomat has full faith in the capabilities of his third child. “Lifting someone too high… the drop can also be sharp. But, he’s got a sound head and won’t be carried away; he knows what he’s capable of and he’s already said that he doesn’t have a magic wand.”...............Barons of Banking
A new book relooks at the history of Indian banking up to the 1990s through the careers of six personalities..........
Read - Mint
Move On Governor, It’s Time to be a Grandpa
...........For
now, Subbarao plans to catch up on reading, travelling and learning
salsa. Urmila has left him back in Mumbai to do all the packing before
they relocate to hometown Hyderabad by mid-September. Urmila is now in
the US with her children celebrating a baby shower; the family awaits
Subba who is due to be a grandfather by the year-end.
Obituary
I regret to inform that Mr.M.S.Aradhey, who retired as GM
in-charge, Byculla Office expired on September 7, 2013 at Thane. He was suffering
from Blood Cancer. May his soul rest in peace.
- R M Joshi
Aradhey was Grade I in New Loan Section of PDO, when I reported on the first day to my second job in RBI, I reported to Shri R. Janakiraman, AO, PDO, then. Aradhey was simple and always smiling bespectacled handsome person. Shri K V Deshpande and Aradhey were initiators for me to learn about PDO. I respected and loved them very much. At this age loss of Aradhey is great loss to society of good people.
- K.S.Iyer
Aradhey was Grade I in New Loan Section of PDO, when I reported on the first day to my second job in RBI, I reported to Shri R. Janakiraman, AO, PDO, then. Aradhey was simple and always smiling bespectacled handsome person. Shri K V Deshpande and Aradhey were initiators for me to learn about PDO. I respected and loved them very much. At this age loss of Aradhey is great loss to society of good people.
- K.S.Iyer
Public sector - Act V? - Subir Gokarn
............There are many other sectors in which these questions about the relevant roles of the public and private sectors are becoming important. We have to find an answer to them, which will, at least for a while, be consistent with the development challenges that we currently face. As a start, let me propose that the theme for Act V be "Renewal".
The vanishing cadres
........Note that the difference between Rajan the CEA and Rajan the RBI governor is not a comment on his ability to make a difference. More appropriately, it is a comment on the roles that the government assigns to its CEA and to the RBI Governor. The CEA is an advisor and more like a backroom boy, who does an important job for the finance ministry or the minister, but is usually not seen as taking decisions. In the past, there have been exceptions, where CEAs have played a more active and well-publicised role in policy-making. But in the last few years, CEAs have usually taken the backseat. In sharp contrast, the RBI governor is the head of an autonomous organisation that has to take decisions to impart stability to the economy and markets. By the very nature of the job, the RBI governor has to take charge of the situation and has to be seen to be doing things............
Handle gold from a banking angle
My View on "Concern over RBI's reported move to take over temp...":
It is unfortunate that legislators raise ‘doubts’ about tracking domestic gold stock without doing their own home work. It is in the national interest to have a fair idea of country’s domestic resources including gold, wherever they are located. MPs were vociferous about ‘funds abroad’. Is it not fair for the GOI/RBI have an idea about the domestic stock of gold?
Time is opportune for authorities to think in terms of dedicated professional institutions at regional/state level which will handle gold from a banking angle with an apex body equipped with linkages for import and export of gold and gold products with borrowing and lending capabilities. A ‘Gold Regulatory Authority’ with legislative mandate, should keep a record of gold stock with individuals and organisations, beyond a pre-decided threshold level. There should be arrangements for reporting use, further accumulation and disposal of such stocks.
Establishment of ‘Gold Corporations’ with state participation could also be debated. Such an institution can act as a depository where the pride gold possession of individuals and institutions now in bank lockers and the pledged gold can find a safe shelter, provided the purity could be ensured and the ‘Corporation’ is able to find resources and skill to deal in gold and money with the customers’ confidence. States like Kerala have successfully intervened in other similar sectors like chits/kuris and lotteries, which were also areas of exploitation by vested interests, whereby players in private sector had to fall in line and function with discipline and self-regulation.
The policy should look at a strategy that will encourage transparency in transactions, elimination of wastages, standardization of valuation norms and facilities for gradually converting even the existing stock of gold with individuals and institutions to conform to internationally acceptable standards.
- M.G.Warrier
Govt may start gold deposits to channel savings
.......While the Reserve Bank of India is already in the midst of issuing inflation-indexed bonds for retail investors, other options on the table could include a gold deposit scheme. "The idea is to not only fill the immediate investment gap for gold but also to provide long term options to investors that are attractive," said another official close to the development...........
Shocking: Ahmedabad emerging as gold smuggling hub
Ahmedabad: About 100 kg of gold is being smuggled into Ahmedabad every day to match the unabated demands of the Indian consumers. In rupee terms, 100 kg of gold (as on September 7) costs about Rs. 31.10 crore, which effectively means Gujarat is consuming about Rs. 930 crore worth of smuggled gold every month. Stringent import duties levied by Reserve Bank of India (RBI) had curtailed gold imports at the city airport to a mere 174 kg but in the process, has spurred smuggling of the yellow metal. ...........
A debate on evolving banking structure
..................On government ownership, there is very little new that the RBI discussion paper has to say. Government can issue shares with non-voting rights to retain control while simultaneously enabling public sector banks to raise capital. By many viewpoints, the role of government in any future banking set-up will be the most important factor impinging on the general level of competitiveness and financial stability.
Facing stiff challenge
......Co-operative banks, according to Amonkar, are constrained by bottlenecks in parameters. They cannot deal in forex and therefore lose out on profit income. They also have limited capital and cannot open ATMs and have to tie-up with commercial banks for CBS, RTGS and NEFT services. Another barrier to growth is restrains on opening new branches as a result of which scope of operations is limited. ............
RBI's notification on 20:80 schemes aim at consumer awareness
CHENNAI: The Reserve Bank of India's notification advising banks against upfront disbursal of loans without considering the stage of construction has been issued in order to prevent indiscriminate lending under such schemes by banks. "The increasing popularity of the 20:80 scheme during the past one year has prompted RBI to sound out an advisory to banks," ratings agency CRISIL said in a recent report...............
Need Money? Don’t Go to the Bank
.....There
are new emerging payment systems and we are trying to become a
less-cash society, even if we cannot be a cashless one.” He speaks about
interesting possibilities like cash at POS where people can withdraw
cash from retailers. With M Pesa for instance one can even pay for
sweets at Shrinathji and Birdy’s. That is the kind of sweet ending Raghuram Rajan would surely like.
Man adds woman on social network, dupes her of Rs7L
...........“Later, Philip called her again and told her that because of so much luggage, he has to pay Reserve Bank of India (RBI) taxes. He texted her an account number, saying it belongs to one Sanjay Gupta, a fund officer in the RBI,” added Pachurkar. “Some days later, Philip messaged her again with another account number, this time belonging to ‘RBI officer’ Sabina Mishra, and asked her to transfer money again. Within 18 days, Philip convinced the victim to transfer Rs 7,09,700,” said the officer.......
‘Fake SBI officials’ dupe school principal
..........When contacted, one SBI officer told Nagaland Post that it was the “carelessness and ignorance” on the part of the customers that they were falling prey to the fraudsters. He said that according to the Reserve Bank of India (RBI) guidelines and Know Your Customers (KYC) norms, no RBI or respective bank officers have the right to ask its customers their ATM secret pin code and ID and password in internet banking. Those asking for ATM secret code, ID or password were fraudsters, he added. He said that SBI would be putting banners and posters in all the ATMs and bank branches. .................
Banks told to file FIRs against wilful defaulters
......“Public sector banks have been told to show zero tolerance towards wilful defaulters and lodge FIRs against them. Taking over the company management from such defaulters is also a must. Not just the banking system, but society is paying a heavy price due to such defaulters," financial services secretary Rajiv Takru told FE. Banks are already submitting to the RBI on a quarterly basis a list of those who deliberately default (cases of over Rs 25 lakh where suits have not been filed but were classified as doubtful/loss accounts). In addition, the RBI and CIBIL have a database of suit-filed accounts, including wilful defaulters of over Rs 25 lakh.........
Huge Challenges Await the New RBI Governor - M.G.Warrier
....................To conclude, I must say, the appointment of Dr. Rajan has raised huge expectations. Can the new RBI governor help the economy, besieged by a plethora of challenges including a weakening currency, burgeoning deficits, sluggish growth, runaway inflation, rising interest costs, etc., regain momentum? Well, only time will tell.
‘The World is Watching Rajan’
.......I
expect he will try to break the back of India’s inflation, establishing
the Reserve Bank of India as a more independent and credible central
bank, and trying to end the rapid decline of the rupee through sharp
interest rate hikes.
The question is whether he has the resolve and political skill to pull
those things off, and for a central bank without a strong tradition of
political independence, that will be no easy task.........
Read - ET
Messiah on Mint Street
........The
level of hype which marked his entry into Mint Street has never been
seen earlier. But Rajan does have the potential to emerge as a fine and
successful governor, with some luck and given his intellectual ability.
But as Rangarajan who headed the committee which chose Rajan as chief
economic adviser says, when an academic takes on an executive position,
he has to find answers immediately. According to the former RBI
governor, an academic who takes on an executive assignment will have to
apply his knowledge and find solutions swiftly as there is no luxury of
time in the real world unlike in academia. So what will count is
delivery not intellectual heft...........
Read - ET
Banking on Mr Rajan
..........Everyone you speak to — from bankers, entrepreneurs and executives to investors — hopes Rajan will usher in a pro-growth shift in India’s monetary policy. Will he do that? Everyone will be keenly waiting for his mid-quarter credit policy, scheduled for September 20, just a fortnight after he took charge. Rajan faces what economists call a central banker’s trilemma. He has to arrest the rupee’s slide, cool inflation and create conditions that will boost growth. Most central bankers have to deal with one or two of these challenges at a time. Attempting all three simultaneously is a Herculean task..............
Raghuram Rajan in no hurry to reverse measures
.....In sum, managing inflation expectations will remain RBI’s priority and the high interest rate regime at the shorter end may continue for the time being. Those who are expecting Rajan to reverse the August policy measures may have to wait for months before they are done.
New India central bank chief may face short honeymoon
NEW DELHI, September 8- The euphoria which greeted new central bank governor Raghuram Rajan has been unprecedented in India’s normally sober financial world but the honeymoon may be shortlived. Analysts say it is a mistake to believe the suave star economist, whose first day on the job last week one financial daily likened to the “central banking equivalent of a blockbuster movie opening,” is a miracle man who can rescue India’s ailing economy.............
Raghuram and Asaram: the future of India has arrived
Two important events stand out in the last week. And surprisingly, in both the events the lead actors have the name of the most favorite Indian God ‘Ram’ as part of their names–- Asaram and Raghuram Rajan. These two individuals, though totally unconnected to each other have one thing in common -- they are prime symbols (of course in their respective fields of expertise) of the pathetic state of affairs the country is witnessing. The society and the economy both seem to be crumbling and Ram as usual is omnipresent.............
Indian economy needs the FM and the new RBI Guv Raghuram Rajan to match their steps
.........The sudden spurt in optimism over Rajan's arrival at Mint Street is reminiscent of India's cricket great Sachin Tendulkar stepping out on the ground with his team in dire straits. Like Tendulkar, the new RBI chief also will have to carry the burden of expectations from a large Indian population. While Tendulkar is nearing the end of a highly successful career, Rajan is just beginning his arduous innings at RBI..........
Mystery of the mangled rupee
...... “You know what all this reminds me of? It reminds me of the movie The Murder on Orient Express. The story was about a murder where everybody seemed to have an alibi. Ultimately, it turned out that every suspect had struck a blow against the victim, with no one knowing who struck first. The detective decided not to prosecute anyone.” “I think that is what we must do about the rupee. Thankfully, it still seems to have some life left in it. Let’s stop arguing and see what we can all do to revive it”.............
Is Raghuram the Rupee Whisperer?
It’s
a sign of the world economy that these days central bankers are bigger
superstars than, well, superstars and prime ministers. But it’s an
occupational hazard for superstars that it takes just one stumble for
the fickle public to swing from exuberant “likes” to utter dislike. RBI
Governor Raghuram Rajan could take a lesson or two from Mark Carney, the
BoE’s Canadian rockstar governor. His arrival was greeted with the kind
of euphoria that usually only teen idols can generate............
Read - ET
Will Raghuram succeed where Manmohan failed?
.........So in this bleak landscape will the new Governor of the Reserve Bank be able to make a difference? Will he be able to take measures that will strengthen the Rupee and encourage investment? Will he be able to restore some of the optimism that was such a characteristic of the Indian economy for more than 20 years? The truth is that nobody knows. The truth is that times are so hard at the moment that the future looks bleak despite one of the most celebrated economists in the world taking charge at the RBI.
Rising dollar, falling rupee, crouching students!
......Since the past few days, the only thing that everyone is talking about is the rising dollar and falling rupee. Moreover, there are numerous articles on how this is affecting the lives of people in India. For students who are studying abroad, for families who want to holiday abroad; the US and the UK seem like a mirage, a shimmering promise of a dream which has now turned dull. Undeniably, the falling value of rupee indicates that to study, holiday, live and work abroad will get expensive but it is not unachievable. Who are the people who plan their annual vacations abroad? Businessmen, industrialists and upper middleclass Indian families, right? Well, these people can still ‘afford’ that trip by just shelling out a few thousand dollars or pounds more..........
The razzle dazzle of the Rajan effect and the ifs of the rupee raga
.........Rajan brings to the table the critical three Cs: Comprehension, Confidence and Clarity. Rajan comes with a reputation for Comprehension of the complexities of global finance. Unlike his predecessor, he has the Confidence of the Prime Minister and more importantly, the Finance Minister. He has also, clearly, prepared for the job while at North Block. His arrival statement had Clarity and a firm grasp of the obvious issues.............
No tweeters, all followers
Predictably, the twitterati led the mass hysteria over Raghuram Rajan taking over as RBI governor. Just about everyone seemed to have a view on the man. His near rockstar appeal was visible on twitter-handle @RaghuramRajan. On the day Rajan took charge, the twitter-id tweeted “@RaghuramRajan hasn’t tweeted yet”. But that obviously was not too much of a bother for his 700-plus followers who had already hitched their wagon to this star. At last count, the score was: 0 tweets, 0 following, 1,152 followers! Could this be a fake id of Rajan created by someone with a sense of humour?
Raghuram Rajan: the challenge facing India's Ben Bernanke
......What's ironic is that Rajan's and Bernanke's fates as economic policy-makers are tied up in other ways, reaching back years. Kurt Vonnegut, in his novel Cat's Cradle, wrote of the fictional religion Bokonism, which required of its adherents only belief. Vonnegut theorized that groups of people – dubbed a "karass" – would end up working toward a common purpose, unknown to themselves or each other, finding their lives intertwined without any knowledge of the goal they were working towards in common. The world's central bankers have become this karass, meeting and separating and meeting again to solve the quandary of economic crises – without knowing, really, what they are doing, or how it will end. The common threads are there. ..........
Can he walk the talk?
.............his will be a continuous battle for Dr. Rajan in the face of constant efforts from North Block to encroach on the RBI’s territory. He’s not the first Governor who will face this problem, and he will not be the last. What is different though is that the pressures are now bigger given the slowdown in the economy. The report of the Financial Stability and Legislative Reforms Commission has put the central bank on the back foot, and Dr. Rajan will find it difficult fending off the government’s yorkers from this position. But yet, he will have no option but to keep defending as his predecessors have done. ..........
Raghuram Rajan may discuss stability issues at Basel Meet
MUMBAI: Raghuram Rajan will meet global central bank chiefs in Basel, Switzerland on Monday, for the first time as the Reserve Bank of India Governor, and probably discuss global financial stability and issues related to banking regulation. ...........
Being erudite is so sexy
..........Also, by not pandering to the cacophony of social media chatter, Rajan has shown that he means business and that’s pretty much what he intends to keep his focus on. It’s not all talk and little work for him. And ladies who love a man in charge are going to dig you for keep the frivolous chat to the minimum. It’s the serious, intelligent image that wins any day..........
Now, over to the politicians
........Rajan is undoubtedly a very smart man. He is youthful by the standards of the Indian policy establishment. He is energetic and he has fresh ideas. But he doesn't possess a wand, which can be waved to magically restore the fiscal balance. In fact, that isn't even his job. The best he can offer is some degree of monetary sanity. It took three years of collective fiscal profligacy and policy mismanagement to cause this crisis. Most of the people responsible are still very much part of the establishment. One man, and one without a fiscal policy mandate at that, cannot reverse that trend. It will require a combined effort from fiscal policy-makers, with the consensus of Parliament to even start putting things right and the damage cannot be mended in a day, or a month, or maybe even a year.........
Move to revamp Bhubaneswar night patrolling
..........."The responsibility of the GOs is to brief the night patrol officers about their tasks. They would also check up if night patrolling is being carried out effectively across the city, including VIP areas like Naveen Niwas, state secretariat, the assembly and Reserve Bank of India, among others," a senior police officer told TOI.............
Saturday, September 7, 2013
RBI Governor meets Maha CM; Chavan seeks banking sector help
Cubiclenama | An open letter to Raghuram Rajan
....Third, it is always a good idea, at least in the beginning, to act as if RBI is functioning very nicely indeed and very little needs to be changed. Say things such as: “My job is to merely let this august institution continue to function in the august way this august institution has always functioned augustly.” Avoid saying things such as: “For too long RBI has been a haven of ineptitude and incompetence and I am going to change all that starting this very moment, oh dear,...............
Is Re-based trade settlement a good idea? - Yes
........The decision on invoicing in a particular currency depends on the outlook on the exchange rate; when sentiment is weak on rupee, an overseas seller will not like to have a sale invoice in rupees while the overseas buyer will prefer a foreign currency invoice. This stresses the need to build confidence among overseas entities to invoice in rupees with Indian companies. The need of the hour is to encourage importers, rather than exporters, to invoice in rupees which would reduce the trade gap in dollar terms..............
Is Re-based trade settlement a good idea? - No | Dr.S.S.Tarapore
........The institutional memory of the Government and the Reserve Bank of India (RBI) should have warned us about the pitfalls of rupee-based trade. Again, how would such agreements bear up to India’s 1994 commitment to the IMF under current account convertibility? Rupee-based trade is an accounting device and imports of goods and services by India have to be paid by exports from India of goods and services — in other words, there is no free lunch...........
Banking Ombudsman is here to sort out complaints
......Addressing the annual press conference on Friday, RBI, Patna's AGM Gyaneshwar Pathak and Banking Ombudsman (Bihar and Jharkhand) Patric Barla outlined the highlights of OBO scheme, which was introduced by the RBI in 1995...............
RBI opens I-T remittance centres at leading banks
......Regional director of the Bank, P Kumar in a press note issued here has said that the the rush for remitting income-tax dues through the Reserve Bank of India has been far too heavy towards the end of September and it becomes difficult for the Bank to cope with the pressure of receipts although additional counters to the maximum extent possible are provided for the purpose. As a result assessees have to wait in long queues at the Bank for unnecessarily long periods. “To obviate the inconvenience involved, assesses are advised to avoid last minute rush by remitting their Income-tax dues sufficiently in advance of the dues date, P Kumar added.........
Read - Nagpur Today
The QE that no one noticed
........What is the key take-away from this definition? It is that when the size of the central bank’s balance-sheet increases, it effectively delivers easy/easier monetary conditions — reflected in low/soft interest rates — to the broader economy. With this explanation in mind, look at the following numbers. The size of the RBI’s balance-sheet in March 2002 was close to Rs 3,50,000 crore. In March 2013, it had ballooned to as much as Rs 22,00,000 crore. If this is not QE, what else is?..................
Subbarao’s innings
D. Subbarao richly deserves the compliments paid in “Subbarao’s innings: End of a turbulent tenure (Business Line, September 4.) In standing up to the Finance Minister he has proved that gentleness has a power of its own. Had he been at the helm of the Bank of England or Federal Reserve, his mettle and personality would have received more accolades. It remains to be seen how the powers-that-be recognise his undisputed talents and skills.
C. G. Kuriakose, Kothamangalam (HBL)
Raghuram Rajan: A New Posterboy for Indian Leadership?
.......But ever since he was named the next governor of the RBI, media coverage of Rajan has been equal parts nauseating and bemusing. In article after article, gushing journalists have cited his long list of academic achievements. His preppy, good looks have also received disproportionate coverage. The country’s leading business newspaper, The Economic Times had no less than six photographs and illustrations of Rajan on the day after he took over from his predecessor D. Subbarao, including one that cast him as a cool James Bond-esque figure poised to reclaim the Indian rupee’s “stolen” value and bring the mojo back to India’s spluttering economy (low growth, high inflation, a treacherous current account deficit)........
When Raghuram Rajan took over Rajnikanth on Twitter India
....The Twitterati too wanted to express their happiness as the trend #Raghuram Rajan Facts caught up pretty fast after the close of market hours on Friday. That was the impact of just one speech from the new RBI Governor who is now being hailed as the savior of the country’s economy. His superpowers are being compared with none other than The Rajnikanth!.......
Proxy fame
.......It took a moment for the person to realise what was happening before he considerately told them, "I'm not the Governor." This sent a wave of laughter through the conference hall prompting Deputy Governor Urjit Patel to joke, "We should play this game more often!"
India’s new bank governor has hands tied
..........First of all, the RBI’s suave new governor has no control over what really ails India. Sure, he can try to defend the rupee and get a handle on India’s 10 percent inflation. He can use his international credibility to soothe markets as Ben S. Bernanke and the Federal Reserve withdraw stimulus. Even the most respected central banker, though, cannot stop politicians from spending without accountability. Rajan cannot root out corruption, make the government more transparent, or attack the red tape that is deterring investment and strangling growth...........
RBI chief Raghuram Rajan to hold media interaction post September 20 policy
The Reserve Bank of India's new Governor Raghuram Rajan will address the media after the central bank's mid-quarter policy review on September 20. Previous governor Duvvuri Subbarao had only addressed the media at the end of RBI's quarterly policy reviews...........
Lucky general?
The Napoleonic quote about preferring lucky generals to good ones doesn’t do justice to the great start RBI Governor Raghuram Rajan got off to, but not too many Governors can boast of a 248 paise appreciation of the rupee, 304 paise in the offshore non-deliverable forwards market, 1035 points in the Sensex and a turnaround in the FII market with $581 million coming in on Wednesday and Thursday. All this, without making the obligatory cut in interest rates, the only thing that seems to excite marketmen these days..............
The man for the moment
........What is fascinating is that Raghuram Rajan in his first speech as RBI Governor mentioned that the rupee needs to be internationalised. “This might be a strange time to talk about rupee internationalization, but we have to think beyond the next few months. As our trade expands, we will push for more settlement in rupees. This will also mean that we will have to open up our financial markets more for those who receive rupees to invest it back in,” he said. .........
New RBI boss has made the right noises, making markets smile again
.....The government, as former Governor, D Subbarao, constantly reminded us, must play its part and push through politically tough reforms needed to fix the economy. We are under the constant threat of a sovereign rating downgrade and our credit rating is just one notch above junk status. By the time Rajan makes the first monetary policy statement of his term on September 20, the US Fed would have taken a final call on tapering of quantitative easing. Markets will, meanwhile, keep waiting for what he promised in the first speech — a broader roadmap of reforms. Will RBI reverse the trend and cut policy rates in its next monetary policy review? If that happens, it will be a big step for Rajan in the many long strides he must take to push India’s economic growth.
Appeasement towards few should be Rajan’s policy
......It is the best way for Rajan to begin his term. Appeasement towards few should be his mantra under these trying circumstances. Win the markets and the people over and the rest will follow suit. Importantly, however, he needs to surround himself with a team of able advisors.............
On-tap licence good idea, but are there shortage of banks?
.....Yes, on-tap licenses will take away the hassles of opening a new bank, but what attracts me most are boutique banks. We don't have many specialized organisations having domain knowledge. Any number of boutique banks with a lot of domain knowledge will be a great help. They will be able to bring new products and develop new delivery channels. New mechanisms can be evolved.............
Dhoot counters RBI statement on bank licence application withdrawal
The Reserve Bank of India (RBI) on Tuesday announced that the Venugopal Dhoot-promoted Value Industries, based in Aurangabad, had withdrawn its application for a banking licence application. However, in a curious turn of events, Videocon Industries, promoter company of Value Industries, denied having done so. Venugopal Dhoot, promoter of Value Industries and chairman, Videocon Industries, said: “We have not withdrawn the application and have only sought clarifications from RBI on certain issues.”.........
'Rajan must cut rates; expedite bank licences to boost growth'
......"RBI should lower the interest rates at this juncture to enable a cut in lending rates by banks and thus stimulate corporate investments. Bank provisions for CRR and SLR should also be brought down to ease liquidity," Ficci Secretary General Didar Singh said. The central bank should also strengthen the corporate bond market for long term funding to reduce the pressures on banks for long-term lending and to diversify the debt risk beyond banking system, he added.........
Subbarao put serious pressure on real estate
........By asking banks not to fund such projects and cautioning buyers about the credit rating if the builder fails, RBI is clearly giving a signal that builders need to bring in their own money to buy land. Once the project takes off, they can sell it to buyers to raise money for construction purposes. Bankers said that in this way, RBI is trying to ensure that there is no deviation from Subbarao’s predecessor Y V Reddy’s diktat that banks cannot fund land purchases. Also, it is likely to force builders to complete existing projects and sell them before moving on to the next one. There are already talks that this move could lead to fall in real estate prices. Of course, the performance of Reserve Bank of India governors are normally weighed by ‘inflation containment’ and ‘growth support’ through their interest rate or liquidity regime............
Falling short
This refers to the article, “Cashing in on coin shortage” (Business Line, September 6). Coinciding with the big agenda set out by the new RBI Governor comes a trivial news item that retail traders all over India have been experiencing an acute shortage of small coins. This is nothing but a mismatch between demand and supply. As the report itself has stated, the RBI has been supplying less than the indent thereby creating the shortage. While many of the issues raised by Raghuram Rajan are indeed difficult to tackle, can the RBI not solve this problem? It may seem trivial from a policy perspective but it makes a retail trader’s day quite miserable, not to mention the common man. No wonder middle men make hay by charging a premium on exchange of small coins. Let the new RBI Governor make a good start by resolving this coin crisis.
K. V. Rao, Bangalore (HBL)
Only 3.6% households go in for cashless dealings: Report
......As almost 96 per cent of all transactions in the country are conducted in cash, the repercussions are felt by individuals, businesses and the government, it added. "In 2009-10, RBI incurred an annual cost of Rs 2,800 crore to just print the currency notes, which was 0.4 per cent of the total currency in circulation. This cost, however, does not include the cost of storage, transportation, security, detection of counterfeits, etc," the report said...........
Jago grahak jago - RBI's new tool to stop phishing
.....Another email to phish your banking details reads, "On behalf of the India Government or the Reserve Bank of India, we wish to notify you as a beneficiary of…….certain amount." Further, in order to make the email look authentic, it even bears the signature and photograph of the RBI governor and ends with the message "In us you can trust."..........
RBI enhances limit of funds taken out, brought into India per person
In a bid to provide greater flexibility to resident individuals travelling abroad and to attract more foreign exchange inflows in India, the Reserve Bank of India (RBI) on Friday enhanced the limit of Indian rupees any person residing in India can take outside the country or a person who has gone out of India on a temporary visit can bring into India.......
Corporate debt restructuring cases to come under scanner
.....“There is a thought to scrutinise each case (and the respective company’s performance) which is under the CDR package,” Takru told Business Standard. The details of the timeframe and the mode of review are yet to be worked out. Takru’s message comes just two days after Reserve Bank of India Governor Raghuram Rajan sent a strong message to company promoters in his first media conference. Rajan said promoters did not have a divine right to stay in charge regardless of how badly they mismanage an enterprise, nor do they have the right to use the banking system to recapitalise their failed ventures. He has also asked Deputy Governor K C Chakrabarty to take a close look at the restructuring and recovery process and said next steps would be taken shortly.........
Recapitalisation of defaulting borrowers by banks - Dr.T.V.Gopalakrishnan
.... 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...............
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.........
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