Reserve Bank of India Governor Raghuram Rajan is set to use consumer-price inflation as the main guide for monetary policy for the first time, a shift that signals further increases in the benchmark interest rate. Rajan, 50, will add to last week’s surprise repurchase-rate boost after specifying a pace of consumer-price gains as the key target, seven of 10 analysts said in a Bloomberg News survey. A panel he set up after becoming governor on Sept. 4 is due to report by December on revising the monetary-policy framework.........
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.
Friday, September 27, 2013
Is Raghuram Rajan an inflation hawk?
.....That lends further support to the view that RBI is now looking at consumer price inflation, rather than wholesale price inflation, when deciding upon policy. During an interaction with analysts after the monetary policy statement on 20 September, Deputy Governor Urjit Patel said the central bank looked at multiple indicators, including WPI, CPI and CPI-IW, before arriving at a decision to hike the repo rate. But there are several reasons why CPI is likely to be the new governor’s favoured measure..........
RBI governor says forex reserves comfortable
..........The central bank has been cautious in using its forex to stem the depreciation of the rupee, which has weakened by 14.4 per cent against the dollar this financial year. Under Rajan, who took charge on September 4, the currency has been able to halt its fall, which has appreciated 5.5 per cent this month.................
RBI’s liquidity assurance: Is Raghuram Rajan nervous?
......RBI has promised to take appropriate actions, including open market operations (OMOs), to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. Indeed, OMOs will be the key to liquidity management. RBI has been generating primary liquidity through OMOs since fiscal 2009. Till then, RBI’s dollar buying was creating rupee liquidity as for every dollar it bought, an equivalent amount of rupee flowed into the system..............
Now, home loan cashback on RBI's radar
After directing banks not to offer zero per cent finance for purchase of consumer goods, the Reserve Bank of India (RBI) might also crack the whip on home loan products offering cashback facility or EMI (equated monthly instalment) waiver, people familiar with the development told Business Standard. The banking regulator is likely to review these products so see if pricing was done in a transparent manner..........
Let zero schemes finance growth, RBI
..........It is not the case that consumers are unaware that these financing schemes entail real costs on account of interest and documentation. They are aware that credit card-issuing banks charge a financing cost that product companies bear, to tempt consumers with "zero" offers. But this is not their concern. Nor should it be the RBI's. If the RBI is worried about the rates banks offer, it is welcome to examine the banks' books and ascertain if any rule is being violated............
Will RBI ban hit Deepavali sales?
.......The directive has come as a surprise to not just consumers like Mr. Jayaram but to various stakeholders. Banks, consumer finance firms and retail chains have adopted a cautious approach even as they get ready to evolve an alternative to attract customers during the ensuing festive season. Nearly one-third of total sales are driven by such hassle-free consumer finance schemes, said retailers, who fear the RBI directive will only add to woes related to rising prices. The prices of many consumer durables are likely to be revised next month...................
Are regulator penalties just?
With recent reports on levy of deterrent penalties by the Reserve Bank of India (RBI) on banks and by the Insurance Regulatory and Development Authority (Irda) on insurance companies, it is time to understand the basics of monetary penalty action processes that the three financial services regulators—Securities and Exchange Board of India (Sebi), RBI and Irda—undertake..........
Merry-go-round shifts axis of bling
Exporters of gold jewellery involved in round-tripping before the Reserve Bank’s (RBI) curbs on import of gold, which began in May, seem to have shifted focus to round-tripping of diamond-studded gold jewellery. Round-tripping is exporting of goods without much value addition, to avail cheaper export finance from banks and show a higher export performance to get the benefits of a star trading/export house..........
Social media travails
...... Well, the page handler might choose to ignore the news, but it is certainly difficult for the company management to ignore the RBI diktat.
IRDA slaps fine on Punjab & Sind Bank
.........In an order, the regulator said that the bank has received payments from Aviva Life Insurance Company Ltd as its corporate agent over and above the permissible level of commission in the form of rent for infrastructure and advertisement and publicity expenses, among others...........
Thursday, September 26, 2013
Raghuram Rajan brings Wall Street flavour to Mint Street
In the hot seat, Raghuram Rajan sticks to the path of independence
.......This was a reference to Chidambaram’s exasperated remark that if the RBI refused to walk in step with the finance ministry, he would rather walk alone. But then, Subbarao hoped that the minister would at the same time add “Thank God, there was Reserve Bank”. Against this backdrop, Rajan had walked into the RBI. The expectation was that he would walk in step with the North Block and comply by lowering interest rates as a gesture to encourage growth. But Rajan did not follow that route. He chose his own path. It appears he had chosen, as if, to sit before a big size control panel for the Indian economy, fine tuning various knobs and levers to set the pace of the flow of finances and, thereby, activity in various channels. Why this imagery?.........
India needs an inflation-targeting RBI
.......It has also been pointed out that the lack of clarity in the Reserve Bank of India (RBI) on the monetary policy framework—which enunciates the goals, strategies and operational tactics for this framework—coupled with large fiscal deficits have contributed to the prevalence of high and persistent inflation in India in recent years. Before blaming RBI, in particular, for failing to control inflation, however, it is important to examine a few conceptual issues involved from first principles............
What Rajan did that Subbarao couldn't
Raghuram Rajan did what D Subbarao tried and failed- to prop up the rupee. What was the clincher for Dr Rajan then, that in a matter of days he helped stem the massive rupee fall? According to ICICI Bank non-executive chairman KV Kamath, the Reserve Bank of India or RBI earlier made the mistake of saying it did not have the tools to defend the rupee, but Dr Rajan's strong policy stance helped the currency recover................
Financial and real economies
......One wonders whether our policymakers still retain faith in the rational expectations of financial market participants, of financial markets being efficient in producing prices which reflect all fundamentals, etc. The hollowness of the argument struck me recently in the sharp contrast between the behaviour of the domestic and external values of the rupee. The latter has changed by 10% or more in a matter of days (and in opposite directions), twice in recent months, in reaction to monetary policy statements. In contrast, it took the former governor three years, 13 interest rate hikes, and umpteen statements, to reduce the rate of fall of the rupee’s domestic value from 9.6% to a little under 6% in terms of the Wholesale Price Index. ............
Trophy consultants?
........Of course, SKS and the RBI are well within their rights to take advice from whoever they choose. But the choice of consultants in relation to the businesses in question makes you wonder whether there's a real talent shortage in India or whether the foreign credentials of the advisors are an end in themselves.
Well done Gov............
Through the medium of your daily VITALINFO, let me say well done Gov. In a small time span of three weeks he has boosted the confidence of all players in the market. I am sure in the coming days he will address the supply side of our economy by using all tools at his command. All the very best to RBI family.
- B.K.Katyal, Ex-CGM
It's never too late to turn over a new leaf
There are many bank branches in every city,
as there is ample power in the form of electricity,
this is really a pity,
however,let's now hope banks will move with alacrity,
to open new branches wherever required with utmost rapidity,
it's never too late to turn over a new leaf,
this will undoubtedly provide to our folk in the rural areas much needed relief.
- F R Misquith
More may Get a Ticket to Ride on Bank Street
......The intention is to allow a greater number of players qualify, a senior official involved with the process of issuing new bank licences said. Any final decision to tweak the guidelines would be taken by RBI, but the external screening committee headed by Bimal Jalan, former RBI Governor, is expected to play a crucial role in recommending suitable changes. ...........
Rs 3,800-cr bank credit to State MSME sector
........Speaking to The Assam Tribune on the sidelines of the NE MSME Conclave 2013 organized by the Indian Chamber of Commerce here, RBI General Manager (Rural Planning and Credit Department) D Sethy said, “Last fiscal, total credit allocation in the NorthEast stood at Rs 3,300 crore, of which Assam’s share was Rs 2,600 crore. This fiscal the disbursement target for Assam alone is Rs 3,800 crore and the process has started well.”........
Go beyond salaries
....In the event, at a macro level it may be possible to say the government is compensating employees adequately, but the 7th Pay Commission needs to, like its predecessors, look at the head-to-tail ratio—the government has too few secretaries and too many peons, the former is still under-paid and the latter highly over-paid. Government data shows the government spends around 13% of its salary bill on gazetted officers and the rest on the non-gazetted ones. Apart from correcting this, perhaps with a VRS and certainly by freezing salaries at this level, there is little point in hiking salaries unless attention is paid to the work done by bureaucrats. ..........
7th Pay panel formed, retirement age may go up 62 yrs
.......Meanwhile, CNBC TV18 learns that the proposal to extend the retirement age of central government employees by two years has received fresh impetus. A decision on this could be taken within a week or two, and would be the second major populist decision by the UPA to woo the urban middle class and the powerful government employee mass in Indian society..........
7th Pay Commission for central govt employees announced
Prime Minister Dr. Manmohan Singh today approved the constitution of the 7th Pay Commission, which is likely to impact at least 85 lakh central government employees and pensioners. "Its (7th Pay Commission's) recommendations are likely to be implemented with effect from January 1, 2016," Finance Minister P.Chidambaram said in a statement.............
RBI says fee on debit card usage not permissible
The Reserve Bank of India has directed banks to terminate relationship with merchants who charge customers a certain percentage of debit card transaction value as processing fee. "Such fees are not justifiable and are not permissible as per the bilateral agreement between the acquiring bank and the merchants and therefore calls for termination of the relationship of the bank with such establishments," the RBI said in its circular.........
RBI's Jaago Grahak Jaago moment
........Do this simple test to calculate the extra payout: Ask the dealer for the cash discount you will get if you were to purchase the same good. The discount will most likely be around five per cent. So, for a product of Rs 48,000, it will translate into savings of Rs 2,400. Two, the processing fees, say, Rs 1,000. For a 12-month loan, if three instalments are being paid in advance, the actual loan is Rs 36,000 for only nine months. Your loss: Rs 3,400 (processing fee plus cash discount loss). The rate of interest is 12.6 per cent..............
Further season blues: RBI bans zero interest EMIs for consumer goods
......”...in principle, banks should not resort to any practice that would distort the interest rate structure of a product as this vitiates the transparency in pricing mechanism which is very important for the customer to take informed decision,” RBI said in a notification. The very concept of zero per cent interest is non-existent and fair practice demands that the processing charge and interest charged should be kept uniform product or segment wise, irrespective of the sourcing channel, such schemes only serve the purpose of alluring and exploiting the vulnerable customers, it said........
Banks told to end zero interest EMI schemes
With the festival season fast approaching and banks and merchant establishments falling head over heals to woo clients, the Reserve Bank of India dealt a severe blow to them on Wednesday. The Central Bank has instructed banks to stop offering zero interest EMI (equated monthly instalment) schemes for the purchase of consumer goods in a move to discourage them from offering such schemes or products..........
RBI steps in to tame runaway bond yields, attract dollars
...In its “assurance on liquidity management” released on Wednesday, the central bank said it was monitoring liquidity conditions closely and continuously. The central bank said it would take actions as appropriate, including OMOs, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy...........
RBI asks banks to regularly review export credit limit
......"We have examined the issue and banks are advised that they may compute the overall export credit limits of the borrowers on an on-going basis say monthly based on the prevalent position of current assets, current liabilities and exchange rates and re-allocate limit towards export credit in foreign currency, as per the bank’s own policy," RBI said in a notification...........
FCNR golden goose: Great returns on borrowed capital
Foreign banks are scrambling to raise dollar deposits from non-resident Indians -- even tempting them with loans -- to open their foreign currency non-resident (bank), or FCNR (B), deposit accounts in India. The move comes after the Reserve Bank of India (RBI) opened a special window for swapping FCNR (B) dollar funds of three years or more at a concessional rate, and offered various other incentives, including cheap dollar/rupee swap rates, as part of its efforts to stem the rupee depreciation...........
We are banking champions, Moody’s concerns overblown: SBI
..“What Moody’s feels is their view and we don’t subscribe to that. SBI is and will remain the banking champion of the nation. We have no difficulty in raising deposits with our nationwide presence nor do we have any means in raising funds. “We still have the highest rating amongst the public sector banks when it comes to bank?s financial stability rating (BFSR) from Moody’s.”............
Why all is not well with the State Bank of India
............In layman language, SBI does not have money to fund its losses in order to keep its capital in line with the RBI guidelines. Normally the bank would run to the government when its capital adequacy ratio came down, either due to strong growth or rising losses. But now the government financials are in such a mess that it would find it difficult to raise the capital needed.............
Less bank for the buck
...Chaudhuri needed to have concentrated on the quality of the loan portfolio rather than on profit margins or on growing the loan book. Indeed for a chairman who started out mending fences with the regulator, Chaudhuri appeared, once too often to be spoiling for a fight with the RBI on issues like the Cash Reserve Ratio (CRR).......
Why KV Kamath thinks RBI went wrong on rupee
.........."In the past, the mistake we have done is to say we have no tools (to defend the rupee). I think the main difference what I've seen in the approach is that Raghuram Rajan has taken is to say that we have tools, that single statement made by a central bank Governor can make the markets take watch,"............
Rising cyber crime cases: Poor coordination between cellphone operators, banks blamed
....."It has been observed that after the SIM is blocked, the money is siphoned off from the account via multiple transactions that take place one after the other over a short time period. The banks have systems to detect that the transactions are taking place at this pace one after the other. In such a scenario, an alternative verification mechanism, such as the one using a secondary cellphone, can be employed."
Capital ratios of public sector banks under pressure
The joke doing the rounds in banking circles these days is that investors are better off putting their money in bank deposits than in bank stocks. The absence of any bank stock from several model portfolios of leading brokerages indicates the analysts are not just making light of a “stressful situation.” The sharp run up in bad loans is not just a cause because stressed assets are eroding capital ratios of state-owned banks. The markets had hoped that RBI’s new boss Raghuram Rajan would start easing rates to boost growth but.............
Aadhaar's role is diminishing
........It was only in December 2012, over two years after the first card was issued, that the Reserve Bank of India (RBI) allowed banks to accept Aadhaar as valid proof to open bank accounts. And this Tuesday, the Supreme Court ruled that Aadhaar is not mandatory for essential services such as salary, PF disbursals and marriage and property registrations. Obviously, the question is that whether one should really go for Aadhaar anymore? .................
Wednesday, September 25, 2013
Only 40,000 villages in India have bank branches: K C Chakrabarty
Managing the Liquidity Issue - A SESHAN
The results of the latest auction of gilts reveal the problem of
liquidity in the market. One does not understand why the auction was conducted
when government deposits in RBI should be large due to the advance tax
payments. Surprisingly, deposits of the Centre with the RBI, as on September
13, 2013, were at the stipulated minimum of . 1 billion. RBI has the procedure
to invest government surplus deposits in gilts in its portfolio. Government
should follow the principle of just-in-time inventory management pioneered by
the Japanese industry. Unlike in the case of industry, where there is a lead
time before getting the materials, the government can get immediate money from
the RBI by accessing the ways and means advances facility in case of necessity.
RBI should lower the marginal standing facility rate by 25 basis points
and roll back the increase in repo rates. It should also raise the monetary
ceiling on repos by 25 basis points. As the RBI governor pointed out, the CRR
maintenance requirement does not really ‘bite’. Then why is it prescribed? It
could be withdrawn. The kharif marketing season is starting and there will be
credit demand for the movement of the bumper crops. This is the time to effect
some relaxation in policy measures.
ET
North East MSME Conclave held in Guwahati
..........The MSMEs provide employment to about 60 million persons through 26 million enterprises. The geographic distribution of the MSMEs is also more even. Thus, MSMEs are important for the national objectives of growth with equity and inclusion. “Bankers and Entrepreneurs should behave like brother with respect of MSME Sectors,” said Mr.D.Sethy General Manager – Rural Planning & Credit Dept., Reserve Bank of India..................
Fresh ideas must be allowed
It was so good to read an article from Renu Kohli, a former RBI official from 1984 batch. Really good. I think a new Price Index for urban and rural population needs to be evolved to serve as an inflation anchor.It must take into consideration the changing consumption pattern to capture inflation at retail level.Since the younger generation is fond of gizmos, branded clothing,freaking out at restros etc; for urban population, this must also be factored. RBI's intellectual reserves need to be strengthened by introducing lateral entry at the level of CGM/ED also.In fact, in this competitive world, the concept of all posts to be manned by cadre officials only must go. The fresh ideas must be allowed to come by enabling talented people to walk in/walk out of RBI at periodic intervals with shorter tenures of 3 to 5 years. Renu Kohli will fit the bill to be ED.
- Sitendra Kumar
VITALINFO made it possible - Prakash Bakshi, Chairman, Nabard
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Dear Mr Mangesh,
Its not 24x7 news channels, nor the e-papers
available on the net that led to anyone not reading newspapers. But your early
morning VITALINFO certainly achieved that near impossible, and I don't think I
have touched a newspaper for the past few years now for reading any news
related to economy and banking. Thank you so much for making our working lives
so simple. Now that I would be laying down my office in a week’s time, I
request you to add my personal email ID to your database so that I keep myself
updated even after retiring from NABARD. Once again, thank you for this support
all these days, and I wish you all the best in your endeavours. Warm regards
-
PSU bank employees unions call off Sep 25 strike
Banks will function normally as a section of public sector bank employees who had threatened to go on strike on Wednesday have deferred it following assurance from the government that there is no plan for merger of banks at present. Following conciliatory meeting before Chief Labour Commissioner, where officials of Finance Ministry and Indian Banks' Association (IBA) were present, it was decided to defer the strike, All India Bank Employees Association (AIBEA) General Secretary, C H Venkatachalam said..........
Arundhati Gets Shortlisted For State Bank Chairman’s Post
State
Bank of India, the country's largest bank, may soon get its first woman
chairman with Arundhati Bhattacharya having been shortlisted for the
post, according to two senior government officials. Currently one of the
bank’s four managing directors, Bhattacharya’s name will soon be
forwarded to the Appointments Committee of the Cabinet (ACC)..........
Read - ET
Read - ET
Chaudhuri Leaves Poor Investors, Rich Legacy
..........“I
want my legacy to be such that (nasty provisioning) should not come
back again. We should correctly and rightly anticipate and not push
things under the carpet,” says Chaudhuri. “Investors understand that
there are good years and not so good years, and that could be due to a
variety of reasons. But this company is at least disclosing correctly
what it is doing.”...........
Read - ET
RBI to rap auditors for lapses by banks, NBFCs
....."The RBI Act empowers the RBI to take action against the auditors who have misreported or not reported or not told the RBI about violations," a source said. The top management of RBI, particularly Deputy Governor K. C. Chakrabarty, has been critical of how management changes at state- owned banks have led to sharp decline in profits and jump in non- performing assets. This has generally happened as the tenure of top management has gotten shorter in public sector banks, and both the outgoing and incoming chief executives are under pressure to show higher profits during their tenure........
RBI extends date of discussion paper on Banking Structure in India
The last date for receipt of comments on the issues raised in the Discussion Paper on ‘Banking Structure in India – The Way Forward’ has been extended from September 30, 2013 to October 31, 2013. The comments may be forwarded to the Principal Chief General Manager, Department of Banking Operations and Development, Reserve Bank of India,.............
Read.........
Read.........
Default and be merry
The new RBI Governor Raghuram Rajan has mentioned that “we (RBI) will take a close look at corporate distress and bank NPAs to … accelerate the process of resolution”. The truth is that this is a messy affair. Regarding NPAs (non-performing assets) it is no secret that sovereigns in India (both Central and State) rarely, if ever, honour their financial guarantee obligations to banks and others.........
COULD VIKRAM PANDIT’S HOME-COMING BE FOR REAL?
Former
Citigroup head Vikram Pandit is rumoured to be heading home next year
as a full-fledged banker again. Pandit’s inclusion in the RBI panel on
Comprehensive Financial Services for Small Businesses and Low-income
Households is adding fuel to the talk. He will head an NBFC promoted by J
M Financial and will join next February and spearhead its banking
foray. But some believe he may just be flying in and out of India and
not relocate to Mumbai, though he has booked a posh home in BKC.
ET
ET
The essence of Inclusion
...Financial inclusion, full or otherwise, necessarily demands an effective enabling environment where access to financial services can be adorned with unflinchingly reliability, better proximity and fast and cost effective service. Banks in India have managed to provide this environment with reasonable success but the challenges in this area yet outweigh the accomplishments. Why? ..............
Read...........
GDP growth rates
This refers to the report "FM in war of words with BJP leaders over growth rate" (September 24). The problem can be sorted out if the correct procedure is followed. There are three measures of central tendency, viz...............
RBI may cut MSF by another 75bps in next 3 months: HSBC
..........I would also expect the RBI to raise repo rate atleast once, further by 25 bps. So you would have reduced the spread between the MSF rate and the repo rate by 100 bps and you can say that the monetary policy framework has been re-normalised at around the conditions it would normally set in. In terms of making the repo rate then the operational rate, you will most likely have to make some adjustments to liquidity, make available to help facilitate that. So, those are the broad trends I would expect over the next couple of months..............
Dire outlook: BSE Sensex set to crash, BofA blames RBI Governor Raghuram Rajan
........The Sensex had surged 685 points to close at an almost three-year high of 20,646.64 on the eve of the RBI policy review. The index gained 9 per cent between Raghuram Rajan's takeover and the policy review. The report noted that "as markets are already close to our upper limit of the 'range' we believe the risk reward is not favourable."..........
Is WPI Inflation overstated and CPI understated?
Even as the Reserve Bank of India (RBI) has preferred tight monetary stance to arrest inflation, a confusing trend has emerged in the rate of price rise in recent months. This may throw up an interesting debate on whether RBI's monetary tools are apt to control inflation in such a complex scenario..........
Repo rate hike cannot act as an effective measure in taming inflation
.............The flaw in the RBI policy can also be analysed by looking at the most core concept of inflation, which is food inflation. Food inflation is a predominantly supply side issue. We need good crop harvests to control food inflation and repo rate hike cannot be effective here............
Can Raghuram Rajan Reverse the Indian Economy’s Decline?
On September 5, Raghuram Rajan took over as Governor of the Reserve Bank of India (RBI). His predecessor, D. Subbarao, had made several controversial decisions in his five years in charge. His last two months in office were especially difficult. In an effort to control inflation, Subbarao raised interest rates again and again to bring down liquidity — but he failed.........
Fed surprise vs RBI dampener
......However, I'm finding it difficult to term the RBI's move as totally logic-defying. First, at this moment the priority for the country should be to stabilize the rupee, which substantially strengthened recently but is still far from stable. Second, both wholesale and retail inflation are still at high levels despite good monsoon expectations. Third, the monetary and CAD correction steps............
Rating of Banks Downgraded - Banks Continue To Be in Hands of Corrupt Officials
..Is RBI totally unaware of such unhealthy culture? Majority of branches are working under huge mental pressure and hence they cannot safeguard bank's interest. It s absolutely beyond my imagination that officers who are always in fear of action from bosses and who are always threatened of transfer can work wisely and safely. The key target of majority of field functionaries is to please the boss and not to safeguard bank........
Finance ministry clarifies: RBI forex curbs not retrospective
The government on Tuesday clarified that the recent curbs on outward investments by Indian companies will not impact the deals entered by them before August 14, the day the Reserve Bank of India imposed restrictions on overseas investments..........
Global bond index entry on RBI's radar
Last week, Reserve Bank of India Governor Raghuram Rajan said there was talk of bringing India into some global bond indices. For this, he said, discussions with international index agencies and investment banks that created these indices would have to be held. "Sometimes, they require a pace, and we have to examine (that) before we can be comfortable," he said. Here's a brief primer on bonds:.......
RBI has fight on its hands in managing govt’s borrowing
If the results of the latest auction of government bonds are anything to go by, managing the central government’s market borrowing during October-March could pose a challenge to the Reserve Bank of India.......
ATMs WITH BIOMETRIC READERS - round-table discussion
........We need to write to the RBI
that any directive that leads to increased costs to the depositor must be
discussed with us, the largest stakeholders. We invite all concerned NGOs to
join in a round-table discussion on this issue. We would also like to take it
forward with a joint memorandum to be finalised and sent to the RBI on this
issue..........
MP Rajeev Chandrasekhar asks PM, FM to rethink over Aadhaar-linked ATMs
.......Rajeev Chandrasekhar, an independent member of the Rajya Sabha, who is also a member of the Standing Committee on Finance, has requested Prime Minister Manmohan Singh to relook at the Reserve Bank of India (RBI)'s proposal on Aadhaar authenticated biometric automated teller machines (ATMs)..........
ICICI Bank launches new Facebook app Pockets
........."The app will enable young consumers who spend a lot of time on Facebook to carry out a wide set of transactions without having to leave the social media site," said Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank. Kochhar said one-third of the bank's customers are under the age of 30...............
Rise in Internet transactions helping banks reduce costs
......On Tuesday, ICICI introduced a Facebook application that allows customers to transfer funds among other things using the social networking website. The rise of transactions through the Internet should not be seen as being at the cost of bank branches, Kochhar said. “Branches have its own place for customer experience. It is not that non-branch products will replace branches, but in fact it will be complementary to branches, allowing a customer to bank in the car or on the phone,” Kochhar said.............
Banks quiet on festive discounts this year
Mumbai: Around this time every year, bankers are busy planning special discounts on home and car loans in order to attract individual borrowers ahead of the festive season. But not this time. “We are not planning any festive season discounts as of now,” A Krishna Kumar, managing director - national banking, State Bank of India (SBI), said on Tuesday.............
Bank of Baroda to grow by 18 per cent: CMD Mundra
Bank of Baroda, India's second largest lender, is expected to grow in the current year by 17 to 18 per cent as against the industry standard of 14 to 15 per cent, its top official said in New york on Monday. S S Mundra, Chairman and Managing Director of the bank said the growth of banks depends on the GDP growth rate, said at the Bank of Baroda's branch in Park Avenue, Manhattan, New York...........
Tuesday, September 24, 2013
Wait a minute, Dr Rajan- Renu Kohli
.....Specifically, the increasing divergence in WPI-CPI inflation rates has prompted the RBI to attach more significance to the latter in monetary policy formulation. While the central bank continues to anchor inflationary expectations to WPI inflation, its policy rate has increasingly tracked core CPI . Analysts believe that the new CPI is currently in a transition phase and it’s only a matter of time before the RBI formally switches to it as inflation anchor. Notwithstanding the inherent appeal in targeting retail price inflation for monetary policy purposes, should the new index be taken at face value, presuming the data series are robust?........
A focus for the RBI - Ila Patnaik
.......Rajan will have to work hard to build the RBI's credibility as an inflation targeter. He will need to get rid of its multiple objectives and many instruments. He will have to focus on defining the objective of monetary policy and its instrument clearly, building credibility, being consistent and communicating his policy stance to the public. The success of his term will be measured by how well he is able to anchor inflationary expectations and bring down consumer price inflation. ..........
Rajan Walks Subbarao's Path
........Rajan is walking in the footsteps of his predecessor Duvvuri Subbarao, when he said, 'the focus has turned to internal determinants of the value of the rupee, primarily the fiscal deficit and domestic inflation.' And he is exercising his authority a lot more than his predecessor who might have talked the same language, but hesitated to raise interest rates. Subbarao admitted, in hindsight, that he should have raised interest rates a lot earlier, and quicker. Rajan has taken a leaf out of Subbarao..........
This RBI guv’s a Rock Star economist
...Since his appointment, he's been talked about for his stellar credentials just as much as for his handsomeness. Ladies have been fangirling over his dreamy eyes on Twitter for days (in fact, an entire Tumblr blog has been devoted to pictures of "Raghuram Rajan staring at things"), and many jokes about him rejecting the Batman role and starring in Dhoom 4 have surfaced. In a nutshell, Rajan's appointment has everyone following the economy closely........
Decoding Rajanomics: Tame inflation; govt must boost growth
.......To glean Rajan's next step we need to understand whether he will focus on CPI or WPI. It appears he will prefer CPI. His statement dwelt more on CPI for one; sample this : "What is equally worrisome is that inflation at the retail level, measured by the CPI, has been high for a number of years, entrenching inflation expectations at elevated levels and eroding consumer and business confidence. Although better prospects of a robust kharif harvest will lead to some moderation in CPI inflation, there is no room for complacency."......................
If govt doesn’t do its bit, Rajan’s attack on inflation will hurt
......When I prodded him in the press conference as to whether he will watch out for CPI or WPI, he shied away from clearly admitting his bias for CPI. He said he would wait for the Urijit Patel committee report. But he gave himself away when he argued that the WPI does not have any component of services.............
Rajan honeymoon over for banking stocks
.........The RBI commentary’s tone has also meant that economists are now predicting further increases in the policy rate (or that they will remain at the current level), as opposed to forecasts of a rate cut earlier. As a Citigroup analysis of past rate changes shows, banking stocks do well when the repo rate falls, not when it rises. The overarching problem for the banking sector—asset quality—also intensifies as the recovery cycle is extended and growth gets little support from the central bank. In such a scenario, the only attraction of banking stocks remain their relatively low valuations.
India’s top banker needs to steer through chaos
.........The skills required for the two responsibilities are totally different. Rajan, in his previous roles, may have been used to more organised and disciplined fields of play, but his new role will be about navigating between chaos and disorder. Rajan is surely a new generation central banker, but the parameters within which he has to operate are all of the old generation, making the match even more challenging.
The banality of buzzwords
......No useful economic or social purpose is served by central banks pledging complete transparency and predictability of the policy framework and policy decisions. On the contrary, when there is too much policy transparency, the financial sector takes on too much risk, thinking that the path of policy rates is well flagged. A competitive financial sector landscape, executives’ and investors’ obsession on return on equity (RoE), and the perception that the transparency has eliminated policy risk framework is a very potent mix for excessive risk-taking in the financial sector................
RBI organizes Quiz Competition at Jammu
.......The audience for the programme constituted, besides the participants, hundreds of students from different schools of Jammu who thoroughly enjoyed the quiz that they found informative as well as entertaining. A.K.Mattu, General Manager, RBI, Jammu gave away the prizes to the winners and all the quarter finalists at the conclusion of the Quiz. The programme was conducted by Ravinder Kaul.
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