....Even with a high weight on inflation and a lower weight on employment, a Taylor rule says that current levels of interest rates are too high. The RBI needs to note that while it must target the consumer price index, it will find it hard to do so until it solves the question of whether monetary policy affects food prices, or whether inflation targeting involves a policy of manufacturing price deflation..........
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.
Monday, September 16, 2013
Reforms: clear the clutter
.... A refreshing contrast comes from the new banking reforms of Raghuram Rajan, the new RBI Governor. He has decreed that any bank can now open a new branch without RBI clearance. Earlier, the RBI viewed every new bank branch as a special dispensation, to be approved only after long scrutiny. Indeed, the RBI once wanted to approve even individual ATMs, viewing these as bank branches of a sort! Rajan has jettisoned the approach of everything being forbidden till approved. By freeing banks to expand as required, subject only to the usual rules, he has produced clean, uncluttered liberalisation.........
The situation is grave but hardly hopeless
Listening to Reserve Bank of India (RBI) Governor Raghuram Rajan's refreshing speech, I was reminded of a 1970s French satire about the Chinese invasion of Paris in which a sombre protagonist declares reassuringly to panicked colleagues: "la situation est grave, mais pas desesperee!" Indeed our situation today is serious. But it is, as the governor implied, hardly hopeless. In fact, as I argue below the situation is quite salvageable but will require determined action...............
Keep up with the 'out of box' thinking: Shubhada Rao
.....Fortunately, policy focus has now shifted towards attracting capital flows, through a mix of conventional and unconventional measures. However, we need more out of box solutions to enable RBI to reverse its recent tightening measures without compromising rupee stability. In this context, the option of a partial switch in the composition of government borrowing from long-dated securities to bills can be explored. This will have the dual benefit of lowering long-term yields, while enhancing the attractiveness of T-Bill rates for foreign portfolio investors. It is, however, critical for RBI to continue with strategic intervention in the forward market, to ensure hedging costs do not dilute this yield premium..........
Contradictory actions
.........The government and RBI have to control inflation. Analysts think it unlikely to moderate very much despite the good monsoon, because of rising energy prices. In recent months, the RBI has put pressure on liquidity, and maintained high interest rates. The RBI might now, and frequently, increase and reduce liquidity while holding on to interest rates...........
Devaswom rejects RBI request to furnish gold stock
........“The RBI had requested the GDMC to provide details of the gold stock in its possession as part of collecting gold assets of places of religious worship in the country,” Devaswom administrator K.Muraleedharan said. The Devaswom has already communicated to the RBI its inability to provide the details as it was impractical to assess the gold stock correctly, he said on Sunday. A decision in this regard was taken at the GDMC meeting here yesterday, he said..................
Finmin to RBI: Stop Banks from Bidding for PSU Bulk Deposits
.......“Banks
are forced to offer a higher rate because of the bidding process, often
done informally,” a finance ministry official said confirming that the
issue has been raised with the RBI. The central bank is aware of the
problem and had said even in its 2012-13 monetary policy statement that
there was a wide variation in banks’ retail and bulk deposits, which is
unfair to retail depositors...............
Mandya district may soon get State’s first all-woman bank
.................The actor-turned MP was in Mandya on Wednesday to lay the foundation stone for a commercial complex on RAPCMS grounds, off Bangalore-Mysore Highway, here. After the programme, Ms. Ramya said she had requested Minister of State for Finance Namo Narain Meena to set up the bank branch in Mandya. She had got a positive response from the Union Minister. The district was likely get the bank by November. Its location, however, was yet to be identified, she said..................
Banks scurry to expand presence in non-urban areas
........Of this, a large number are in metro and urban areas. Though the rule that banks set up at least 25 per cent of the total branches in rural areas has existed for decades, not many banks have followed this diktat. This has lead to an uneven spread of banks. “Notwithstanding the development of various types of banks, the Indian banking sector is yet to meet the desired banking penetration and inclusion as witnessed in most advanced and some of the emerging economies,” the RBI said in a report recently............
Country bank
.......... If the villager has any money, he can open a savings account and create a variable recurring deposit, or ask the teller to make an electronic bank transfer to his girl friend; otherwise he can use the same account to take an overdraft. The Indian villager is a lucky man — at least in the view of the RBI.
Bank Licence Hopefuls Scramble for Clearances
Banking
aspirants, including Shriram Capital and Religare Enterprises, are
running from pillar to post to get clearances from a plethora of bodies
such as the Central Bureau of Investigation, the income-tax department,
as the Reserve Bank of India accelerates processes to grant new licences
by January. The central bank, which is in a hurry after Raghuram
Rajan took charge, has sought details of the ultimate beneficiary
shareholders in some of the group companies and more details about
finance beyond what appears in annual reports.........
Read - ET
Read - ET
RBI must come clean on why it took so long to acknowledge its mistake
......‘Inadvertently’? It’s been more than two months since the Bank released the list of 26 applicants! So why did it take it so long to realise it had made a ‘mistake’?............
Read - ET
Maharashtra’s Rs 545 crore is locked in land leases
.........The leased lands, located at prime spots, house offices of corporate companies such as Reliance Industries, Jet Airways, public institutions Indian Oil Corporation, Reserve Bank of India as well as elite recreation clubs like Hindu Gymkhana, Islam Gymkhana, Bombay Gymkhana, Wodhouse Gymkhana and Willington Sports Club. The Maharashtra Opposition has alleged that the government did not renew the land leases to give an undue benefit to those who possess the lands...............
Banks must explore new-generation technologies: CII-KPMG report
In view of the prevailing scenario, the financial services industry must explore the potential of some new-generation technologies such as social media, mobile, analytics and cloud (SMAC), according to a CII-KPMG report that was unveiled during the Banking Conclave 2013 in Kolkata. With the Indian banking sector at an inflexion point, the CII-KPMG report notes that the sector must live up to the challenges, particularly in view of the government's ambitious financial inclusion plans and its decision to spend substantially on infrastructure building..........
Will Chidambaram yield to raise the tax exemption limit
The Prime Minister’s Economic Advisory Council wants the government to raise the tax free savings limit for individuals to Rs 5 lakh from Rs 1 lakh. It’s a good idea as this could encourage people to buy more houses, mutual funds, insurance or pension policies and improve the country’s financial savings. The salaried middle class would be happy because for most people PF contributions alone account for a good chunk of the tax exempt of Rs 1 lakh. This leaves them with barely any incentive to invest in other savings schemes............
How the money flows from banks
..........According to available statistics, during the current year 2012-13 up to July end, home loans of banks grew by 18.4 per cent. Loans for commercial real estate during the same period grew by 15.61 per cent. It is reported that the bulk of the growth is in Mumbai and Northern Capital Region. The new guidelines are meant to stop the banks from up-front disbursal of sanctioned individual loans to builders, in order to avoid risk to both banks and the borrowers..........
Regulators get tech-savvy
......Various regulators, including the Ministry of Corporate Affairs, Central Board of Direct Taxes, Securities and Exchange Board of India and Reserve Bank of India have started using the Information Technology Act, 2000 to enhance corporate governance...............
There’s someone ‘smarter’ than your smartphone
............“Nowadays people use handsets with Anroid version and download apps from Google’s Playstore. While downloading, there are chances that a malware named Perkele -- which means Devil in Finnish -- may enter the user’s system, through which attacker gathers information of the user’s mobile data,” Rohit Shrivastava, founder of Club Hack, says. So each time a bank sends an SMS or a one time password (OTP) to the user, the same SMS goes to the attacker. This malware, which has entered through the download, helps the attacker block the SMS alert to the user, so the user is not able to see it, .............
IIM-A faculty suggests way out of macroeconomic mess
AHMEDABAD: There is possibly a way out of the current economic mess if credit can be expanded to close the differential between the low end government bond yields and the repo, says a working paper by faculty of the Indian Institute of Management, Ahmedabad..............
Risk-free returns aren't enough
........The Reserve Bank of India's latest annual report shows investors put Rs 647 billion last year in new commercial bank FDs. Bank deposits comprise 56 per cent of a household's investments. Says Vishal Kapoor, head of wealth management, Standard Chartered,"The bank fixed deposit has been a traditional investment across emerging markets and for most investors, as there's a safety and comfort attached to these products."..........
What a swap is all about
........Two parties agreeing to exchange their cash flows in such a way that both are benefited, is what a typical swap entails, in the financial sense. Companies, financial institutions and even countries enter into such exchanges. The commonly used swaps are interest rate and currency swaps. Swaps were in news recently because the Reserve Bank of India introduced a swap window to attract FCNR (B) dollar funds to rescue the beleaguered rupee. The RBI has allowed banks accepting deposits for three years and over, under FCNR (B), to swap the dollars with it for rupees.................
Cash or credit?
......The beauty of credit cards is that the downside is subtly hidden while the benefits are plugged for all they are worth. Then there is the status thing; silver cards gave way to gold, which gave way to platinum, and now, there are black cards and even palladium and titanium. Dubai’s First Royale Mastercard is made from real gold and has a diamond set in the card. All the big players—Amex, Mastercard, Citibank and Visa, as well as leading banks, have VIP cards for their richest clients, which come with special services. All this is a long way from the origins of credit cards, in America, during the 1920s. It started with...........
Merger has strengthened bank’s financial position: chairman
Chairman of Pragathi Krishna Gramin Bank M.B.Bhat has said the merger of Pragathi Gramin Bank and Krishna Gramin Bank had strengthened the bank’s financial position and would enable the bank to provide better service to its customers. Addressing a press conference here on Saturday, Mr. Bhat said that the merger process had been completed and the staff and officers of both the banks were happy.........
Syndicate Bank plans to outsource ATM management
............Initially, the bank intends to go for outsourcing ATM Management Services at 194 off-site ATMs. This might be extended to all the new off-site ATMs opened subsequently. Also, the bank proposes to go for partial outsourcing of management of on-site ATMs, it said in a bid document. The bank has been strengthening the ATM delivery channel by adding more ATMs from time to time. It plans to add 1,300 ATMs during this year..........
Schemes for minorities being cornered by non-Muslims: Report
........The Reserve Bank of India's efforts to extend banking and credit facilities to Muslims, a major fallout of the Sachar Committee report which said Muslims were out of the banking system, has also ended up benefiting non-Muslim minorities whose socio-economic status is comparable to upper caste Hindus, the report said. "Diffidence at the policy level to clearly focus on Muslim deprivation translates into active reluctance by the implementing agencies on the ground to target the Muslims even in districts with high Muslim concentration," the report said........
Top IRDA official charged with sending ‘spurious mails’
.........S. K. Jain, who is also the Vice-President of the IRDA Officers and Staff Association, was charged with using fake IDs to send e-mails to senior officials, including those in the Ministry of Finance, about corruption and malpractice in the regulatory body. The remand report of the police dated August 23, 2013, notes that Jain had “noticed some irregularities in promotions, absorbing of ineligible employees and corruption, upon which they have tried to convey them to senior officers but they have showed deaf ear… As such, he had decided to send mails to private persons…’’............
Saturday, September 14, 2013
Clinging to a discredited dogma
.........That Mr. Rajan would do so even as the Indian economy is being buffeted by the vagaries of the global financial system is noteworthy. It suggests that as governor, he will not so much be setting out policy but dogma. By clinging to the thoroughly discredited dogma that “arm’s length” financial markets always know best, Mr. Rajan risks putting the RBI on the wrong side of economic history................
Banking In The Time Of Turmoil
....The Indian banking turf is set to change. The RBI set the ball rolling when they opened the stage with the intention to hand out licenses to new entrants. Undoubtedly, the official reason was to bring a large number of hitherto unbanked and under-banked population in the formal financial system, but how many aspirants will be allowed to get into the ring remains RBI’s prerogative. In 1993, when the RBI licensed some private banks, it received 113 applications but only 10 banks got the license. Till now, `financial inclusion’ was the responsibility of public sector banks but by using inclusive growth as the base for licenses, RBI has made private sector banks equally responsible in social objectives. As one can see from the table, currently, public sector banks have more branches than any other bank group in the rural and semi-urban areas..............
The pitfalls and pain for India
.........The measures put in place before the crisis by the former governor YV Reddy in the early 2005 to prevent asset price bubble in the real estate sector, however, went a long way in keeping the impact under check. Reddy knew that the economy was getting overheated. YV Reddy said in a recent interview to Rajya Sabha television, “India’s growth of 9 per cent was a sign of the economy getting a bit overheated, as the economy did not have the potential to grow at that rate. So, the growth needed to come down. The potential for the economy was to grow at 7 to 8 per cent.”................
Plastic gains currency
......According to the RBI website, credit cards are of two types. First is the general purpose cards, named platinum, gold or classic, and are based on services offered and income eligibility. These are issued under the trademark of credit card associations like Visa and MasterCard and are accepted by many merchants. The other type of card is private-label cards accepted by specific retailers only.........
Banks, lend us your tweets!
............. I did a spot poll on facebook before writing this column only to discover that twenty five percent of the respondents, most of them successful professionals and active on the social media, were not aware of the Reserve Bank of India ban on alterations in cheques. Almost fifty per cent were not informed about this important RBI circular by their banks. And forty per cent revealed that they get more promotional stuff rather than communication relevant to their banking transactions. Now this is where high public interface organisations like banks can reach out to customers. ............
BSF on anti-fake currency mission
...The circulation of fake Indian currency notes (FICN), printed in Pakistan and China and smuggled into the country through the porous border with Bangladesh and Nepal, has taken such alarming proportions that personnel of the force are at a loss on how to tackle the problem. From Tuesday, a team of BSF and RBI officials are touring the border villages in Dhubri district and holding workshops on detecting fake currency notes. The workshops will continue till Friday. .............
2nd International Workshop on Inclusive Finance organized by XLRI
2nd International Workshop on Inclusive Finance’ organized by XLRI, the premier private B School in India was inaugurated today in presence of Mr. H R Khan, Deputy Governor, Reserve bank of India, Mr. YC Nanda, former Chairman, NABARD & Chairman, National Commission on Farmers, Fr. E. Abraham. S.J., Director of XLRI and Dr. H.K. Pradhan, Professor of Finance & Economics and Coordinator, Financial Market Centre, XLRI at Jamshedpur today..................
Author rightly opined
Interest in Indian markets for investments arises basically from the strong domestic market with over 350mn middle class and heavy monetization of the rural areas through a largesse of subsidies and MNREGS. It is the lack of consolidation of efforts to strengthen the domestic markets and bring about order that is responsible, as the author rightly opined, for the current imbroglio. It is high time that we give up empirical attitude in tackling regulatory issues governing investments and also the nervous approach to inviting investments. The Indian economy need not be at the begging end but at a commanding end provided the Government improves governance and eschews corruption.
- Yerram Raju
The unbearable hotness of being Raghuram Rajan
........De is being roundly twitter-bashed for turning our poster boy of India’s economic revival into a pin-up model for her Sultry Days and Starry Nights. And ET is being pilloried for allowing De to turn their pages into True Confessions. But to be fair, she is hardly the worst offender there. Clearly our men are not far behind in their Shuddh Desi Bro-mance with this Raghu.....................
RBI governor Raghuram Rajan told he makes hearts go 'dhak dhak'
........After calling him "hot", comparing him to Bollywood heart-throb Ranbir Kapoor and saying she would "salivate from the sidelines", De, who is a regular columnist in India's newspapers, said the country should welcome a departure from the stereotype of central bankers. "Funny how quick Rajan has been slotted as a much panted-after sex symbol," she wrote, adding: "It's not often one gets an RBI Guv who makes hearts go 'dhak dhak' each time he strides into a room." Rajan, a former finance professor, who hails from the southern state of Tamil Nadu, has long been a darling of the Indian media, leading one newspaper to describe him as an "economist with rock star appeal."..........
Will Rajan mend Chidambaram’s bridge with disillusioned economists?
..........The RBI, thus, has been conservative and also pro-reforms. It has been a perch of bureaucrats. By posting a renowned economist like Raghuram Rajan there, the government is trying to mend its broken bridge with the economists who have been disillusioned with UPA’s fiscally imprudent policies............
Wait for change
My View on "Finance ministry, RBI work out informal arrangement...":
In the given circumstances, this is the minimum Dr Rajan could have clinched before taking over. Like all government programmes, it will take some time for results to start showing. But perceptible changes can be observed in the tone of North Block officials while expressing views in public. Media too will have to re-adjust. Even yesterday, an ‘advertorial’ promoting FM (not in Times Group) had comments in bad taste against RBI, though the writer wanted just to criticise Dr Subbarao.
- M.G.Warrier
Promising move
.........A fresh look at monetary policy is welcome. The last such comprehensive look was way back in 1985. It is also good that the rethink is being led by RBI rather than being imposed upon it by New Delhi. The Indian central bank has an unmatched understanding of monetary dynamics as well as of macro stability, which were underplayed or even rubbished by some recent government committees...........
Interest rate takes a U-turn
...........The RBI took several steps to stabilise the foreign exchange market. It
sucked out liquidity from banks to prevent them from speculating in
foreign exchange derivatives. But that did not have the desired effect.
The rupee still declined and, due to lack of liquidity, the rate of
interest on inter-bank borrowing began to rise. The rise in bond yields
due to continued exodus of foreign currency led to a rise in the overall
interest rate..............
Raghuram Rajan's RBI to keep monetary policy tight till rupee stabilises: PMEAC
..............."The current stance of monetary policy has to continue until stability in the rupee is achieved. Thereafter, if the current trend in the moderation of wholesale price inflation continues, which is in fact expected, the monetary authorities can switch to a policy of easing," ...............
PM's advisors differ with finance ministry
.......Council chairman C Rangarajan tried to play down the differences with the finance ministry on this front, saying the situation could improve. Gold imports, one of the reasons for the widening trade deficit, were projected to fall to $38 billion this financial year from $53.8 billion in 2012-13. However, Rangarajan cautioned there could be an increase in gold imports in the coming festive season..........
Banks to remain open on Sep 14, 15 for advance tax collection
........"With a view to facilitate collection of advance taxes for income tax and corporate tax and meeting the probable rush of tax-payers, it has been decided in consultation with the Department of Financial Services, Ministry of Finance, Government of India that all agency banks shall keep the counters of their designated branches conducting Government business open on September 14, 2013 and September 15, 2013," ............
RBI asks some foreign bks to restrict activity in NDF mkt
.....The RBI is attempting to curb speculation on rupee in the offshore non- deliverable forward market, Cogencis had reported on Jul 25 citing a finance ministry official. Many a times, corporate hedging was used as a front by certain entities to undertake speculative positions of their own. In a bid to counter such speculation, the RBI on Jun 26 issued a notification saying that foreign institutional investors, who intend to hedge the exposure of one of their sub- account holders, would have to produce a clear mandate from the sub- account holder in respect of the latter's intention to enter into the derivative transaction......
Another currency crisis waiting to happen: Mahesh Natani
...........“This led to the further depreciation of the rupee to Rs. 68.85 on August 28, 2013. The manner in which the rupee depreciated by over 11% in a short span of 12 days (from 16.08.2013 to 28.08.2013) shows that a major component of buyer’s credit has not been hedged by importers,” alleges Mr. Natani. In response to queries raised by Mr. Natani under the RTI Act, the RBI has admitted that it does not possess key details on buyer’s credit being availed by importers like the amount and date of maturity. When asked, the RBI did not respond to a detailed set of questions emailed by The Hindu on September 3, 2013............
Banking sector revives Lehman fears
............"If you have to save banks from failing, you need more capital. The government has to act swiftly in recapitalising public sector banks. Otherwise, there is a significant risk of some of the banks' net worth being impaired," ............
Investors tread cautiously in state high on RBI report card
........Government authorities described the RBI analysis as a proof of the Naveen Patnaik government's industry-friendly policy. "Our government has pursued an industry friendly policy. Investors are coming in diverse areas such as power, steel, cement, ports and so on despite perceived global slowdown. Odisha is slowly but steadily emerging as an industrialized state," said steel and mines minister Rajnikant Singh. ...............
India Infoline to demerge broking business
.............“We have applied for approval in the high court and then we can proceed on this,” said Mukesh Kumar Singh, executive director, IIFL. India Infoline Distribution is an unlisted subsidiary, in distribution of financial products. IIIFL has applied for one of the new bank licences to be given. The Reserve Bank of India had said it would.............
India’s Exim Bank Sees Potential in Burma
.........Exim Bank has been providing alternative financing solutions to the Indian industry, especially the exporting fraternity, supporting them in their efforts to be internationally competitive. Over the past three decades, a greater measure of internationalization of Indian business has been occurring, through Indian corporates establishing joint ventures and wholly owned subsidiaries, as well as acquiring companies abroad. Exim Bank was the first financial institution approved by the Reserve Bank of India, India’s central bank, to provide overseas acquisition finance..................
Delayed protest
My View on "Rythu Sangham opposes Bakshi panel recommendations...":
 |
| - Yerram Raju |
Two of the Members officially raised their dissent at the truncated view of the recommendations for the NABARD choice to implement: this author and Prof H.S. Shylendra. The Committee that met twice - once at the time of discussion of TOR and second time, when NABARD presented the Draft telling the members present that the RBI was not prepared to extend the date for submission of the Final Report. The Draft presented did not contain the recommendation highlighted by NABARD for its implementation vide its circular dated July 22, 2013. This website carried my article - the Gay Abandon on this issue reinforcing the delayed protest of Rythusangham.
Why mobile banking is more on paper and less on mobile
.......The usage is clearly increasing. Until 2013 August, as many as 846,000 transactions have taken place using IMPS, sharply higher than 93,715 as of September 2012, NPCI data shows. “The numbers are improving , but there is still a long way to go,” A.P. Hota, managing director and CEO, NPCI, told Firstpost. India has 55.48 crore mobile users as per this news report. Of this, only 2.3 crore (RBI data) or just 4.41 percent do any kind of mobile banking activities..............
RBI cancels license of Srikakulam Co-operative Urban Bank
......"In view of the fact that Srikakulam Co-operative Urban Bank Ltd, Srikakulam (Andhra Pradesh) had ceased to be solvent, all efforts to revive it had failed and the depositors were being inconvenienced by continued uncertainty, the Reserve Bank of India delivered the order, canceling its licence," the central bank said in a statement Friday..............
Send e-return copies to Bangalore centre: IT dept to taxpayers
Income Tax department has asked electronic filing taxpayers not having sent their returns copy for the two previous assessment years by post to its centre in Bangalore, to do so early. It also said that those tax payers who have already posted the corresponding ITR-V to its centre and have not received an acknowledgement for the same for these periods, should post it again.............
Friday, September 13, 2013
Uncertain times, certain opportunity
......RBI further informed that as per an earlier circular, interest rates offered by banks on non-resident external or NRE deposits could not be higher than those offered by them on comparable domestic rupee deposits. But in order to provide the benefit of exemption provided on incremental NRE deposits with a maturity of three years and above from CRR/SLR requirements, banks have been given the freedom to offer interest rates on such deposits without any ceiling. However, the prevailing ceiling on non-resident ordinary or NRO accounts will continue as it is. These instructions will be valid up to 30 November 2013, subject to review..........
Letter to new Governor by Retirees' Association
...........We
have reiterated that Regulation 5 empowers the Central Board to revise the
pension on the lines of the improvements in Govt. Pension Scheme. Unfortunately
for us, our fears in the matter have come true and even after nearly two years,
Ministry is seeking 'further clarifications and further data”, although HRMD
had many discussions with them and have provided every available information. We
shall be grateful if you will kindly keep in sight the above mentioned facts,
while considering the issue of updation of pension..........
Finance ministry, RBI work out informal arrangement to avoid open clashes on policy issues
........While the recent arrangement does not particularly break new ground — setting interest rates and bank regulation are already under RBI — the government official involved in the process said there was a need to fix the relationship as it had turned "really bad" in the last year of Subbarao's tenure. "Short-term interest rates and monetary policy management have to be strictly within RBI's domain, but financial inclusion agenda is clearly part of the government's political mandate," the official said. This newfound coordination was reflected in the package of measures announced by Rajan at his press briefing. .........
Hyderabad to remain financial capital
Even if bifurcation of Andhra Pradesh is the reality, Hyderabad will continue to be the financial capital of the bifurcated States. The newly created regions will be brought under the jurisdiction of the Reserve Bank of India (RBI), Hyderabad, a regulatory model that is in place in north-east and other States according to a highly placed source at the RBI. While Hyderabad is expected to be the financial capital having monetary and regulatory control, the new regional offices will take up developmental and other activities of awareness post division, according to him........
Financial joke
The Securities and Exchange Board of India (Sebi) recently notified an National Institute of Securities Markets (NISM) exam for merchant bankers. It is one the best financial jokes. Those who are already in the profession before the notified date get two years to pass the exam, while someone appointed tomorrow, with no experience, gets only one year! And both will be answering questions from the same question bank.........
The FII effect - Dr.T. V. Gopalakrishnan
......The fact that FIIs are able to dictate terms to the capital and forex markets since the days of liberalisation, despite the presence of insurance institutions, mutual funds, provident funds, banks and a whole lot of whole-sale and retail traders only reflects the weakness of our markets and these investors. It is time our investors and the authorities frame a strategy to counter FIIs to ensure that some semblance of order prevails in the market. The buy and sell policy of domestic institutions has to necessarily counter that of FIIs...
RBI sets up committee to revise monetary policy framework
...Chaired by Deputy Governor Urjit Patel, the committee will review the objectives and conduct of monetary policy in a globalised and highly inter-connected environment and recommend an appropriate nominal anchor for the conduct of the policy. It is expected to submit its report within three months, the RBI said.......
A temporary spurt?
......Only a part of the reason for the revival of the currency might be the change of guard at the central bank. Raghuram Rajan’s appointment as RBI chief had been greeted by both the currency and share markets. He had, of course, taken some baby steps to restore faith in the currency, withdrawing a few panicky decisions his predecessor, D Subbarao, had taken in his last days at the bank. et, the euphoria over Rajan’s appointment cannot last long. Markets are heartless even at the best of times. There must be some good reasons for the reversal of the slide. One immediate cause could be the growing realisation that the US Federal Bank may not after all undertake the threatened tapering of the stimulus, at least not immediately..........
Finance Ministry seeks RBI view on listing of unlisted companies abroad
...........Seeking the opinion of the RBI governor, a senior finance ministry official has said in the note that the issue of allowing unlisted Indian companies to get listed abroad without a prior or simultaneous domestic listing has been under consideration for a long time and "was recently discussed with RBI and Sebi in a meeting chaired by secretary, economic affairs, on June 27, 2013." ..........
The wrong fears
.......Indeed, it was none other than Dr D Subbarao who said at his I G Patel memorial lecture at the London School of Economics earlier this year that the classical interest-rate defence of a currency might not work in India due to this peculiarity. The outflows of money and consequent 13 per cent depreciation in the rupee that we have seen since July 15 have more to do with expectations of a solvency crisis in the financial sector, rather than interest rate differentials........
Growth, deficit problems not structural: RBI chief Rajan
..In commentary published on the Project Syndicate website, he also drew an analogy between the current bearishness on the country, whose currency has barely recovered from record lows last month, to the fickle loyalties of Indian cricket fans. "A few years ago, India could do no wrong.... Today, India can do no right," Rajan wrote in the piece. Referring to the record current account deficit and slowing growth, Rajan said those "can all be fixed by means of modest reforms."............
RBI keeps subdued outlook for corporate investments
.......The apex bank said that demand conditions continue to be a major factor in driving investment intentions. With a baseline projection of real GDP growth at 5.5% in 2013-14, demand conditions may not improve substantially. While the government has initiated some steps in the recent past to improve the investment climate, results are yet to be visible,” said the RBI.............
SBI - Change in Directorate
..... the Central Government, in consultation with Reserve Bank of India, vide Gazette Notification dated August 29, 2013, nominated Shri Tribhuwan Nath Chaturvedi, as part-time Non-official Director .......
Mani writes to RBI Governor
........In a letter sent to the RBI governor on Thursday, Mr. Mani said the escalation of prices of all essential commodities being experienced in the country now was due to supply side factors and increasing cost of production. The remedy, it seemed, should come from initiatives to encourage the productive sectors.......
RBI to create central repository on large credits
.....Accordingly, it has been decided to use the information supplied by the banks through the return on large borrowers (Form A)...which captures system-wide exposure of individuals and entities having exposure (both fund and non-fund based) of more than Rs.10 crore, for creation of central repository of large credits across banks,” it said...........
Rythu Sangham opposes Bakshi panel recommendations
......He also feared that the recommendations will again force small and medium farmers to approach private money lenders for investment on their crops and urged the State government to convene an all-party meeting including all farmers’ organisations to discuss the issue. He warned the Centre that the APRS would organise protests across the State opposing the RBI's move to implement the Bakshi Committee’s recommendations, if the government fails to withdraw the decision.
Self-regulatory organisations to enforce discipline in MFIs
....“We have had a detailed discussion with SIDBI, Nabard and the Government. We will be recognising industry bodies or entities which will function as SROs,” said Archana Mangalagiri, General Manager, Department of Non-Banking Supervision, RBI. An SRO is a voluntary body appointed by the industry participants to monitor the functioning of all players in the industry and bring in some degree of standardisation in industry practices. Mangalagiri added that the RBI is clear there cannot be multiple regulations for NBFC-MFIs....
ICICI plans to issue 500,000 new credit cards in 2013-14
.... “We are seeing spending growth of 20% or more, varying between Rs.1,300 crore toRs.1,500 crore every month. Our delinquencies are less than half of the industry and 90% of our cards are actively used,” Sabharwal said, adding that ICICI’s delinquencies had fallen “dramatically” over the past few years. Sabharwal declined to give a specific number on the delinquencies citing compliance issues.....
RBI report an eye-opener for Congress: Parkash Singh Badal
CHANDIGARH: Punjab Chief Minister Parkash Singh Badal today said the Reserve Bank of India (RBI) report which has put Punjab among three best investment destinations in India during 2012-13, should be an eye-opener for Congress. ...........
Thursday, September 12, 2013
The curious case of central bank independence
.......N. Nergiz Dincer and Barry Eichengreen have updated their ranking of global central banks in terms of transparency and independence. Their data shows that the Reserve Bank of India (RBI) is the least independent of the 89 central banks the two economists have studied. They say that the Indian central bank suffers because of the way governors are appointed, the lack of independence in policy formulation and the lack of an independent objective.............
RBI to get glimpses of Rajan's technical accumen, not earthshaking changes - Rajiv Takru
.....With Raghuram Rajan taking charge as the new RBI Governor, do you think differences between the North Block and Mint Road will come down?
When there are two thinking people they are bound to have different opinions. When two people think about the same thing they very frequently come out with interpretations and solutions which differ. I don’t think we should blow it out of proportion and call it differences. ...........
Why has the rupee recovered? - Renu Kohli
Over the past few days, the rupee has recovered some of the ground it lost to the dollar. Some ascribe this to a retreat from panic overshooting. Others believe it is optimism inspired by a new Reserve Bank of India (RBI) governor. Still others proffer explanations based on economic fundamentals.....
Don't shower bank notes on personalities, says RBI
......."Such actions deface the bank notes and shorten their life," the Reserve Bank stated and added that bank notes should be respected as they are a symbol of the Sovereign and public should not misuse them and help in increasing the life of bank notes. The Reserve Bank has also stated that it has been taking all measures to supply clean bank notes across the country and has urged the members of public to contribute their mite to its efforts in pursuing a ‘clean note policy’ for the country.................
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