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.
Sunday, December 22, 2013
Headhunt begins for RBI Deputy Guv Sinha's replacement
“Why even an NDF Dog cannot wag the on-shore tail, much less an NDF tail wagging the on- shore Dog !” - V.K.Sharma
RBI's job is to make sure growth doesn't suffer: Gopinath
.........Yes. I think this is partly the reason behind Rajan’s first policy move - to raise interest rates. That was partly reflection of the fact that we already know that inflation is a problem for the country. If you wanted to kill inflation, it can be done through monetary policy. If you raised rates high enough, you will bring inflation down and there is hardly a country in the world – I cannot think of a single country in the world that has been able to bring down inflation without some pain.........
VITALINFO - Part of life : P.Aravind, Former Regional Director
Dear Mr Tarambale
VITALINFO has become part of my life and the first thing I do when I
open my email is to read what you have published in VITALINFO. I have even
stopped subscribing to Economic Times which I was reading for the past 25
years.
-
P.Aravind, Former Regional Director
PS fraternity is the base that you found to create a blog as VITALINFO
which is earning a name to you and indirectly the PS fraternity is proud of
you! Keep it up!!
- R.Sridharan,
Former Principal Private Secretary to Governor
Sir
I have started reading VITALINFO since recently. I feel I missed the
info for such a long time. You are great, I wish you all the best and send my
new year greetings. Looking forward to your info with great interest. Regards
-
B V Krishnamurthy
Dear Sir,
You are requested to add Smt. Kim Guite, DGM, Secretary’s Department in
the list of recipients for ‘VITALINFO’. With best regards,
- Manisha Thosar, PS to CGM, Risk
Monitoring Department
Dear
Mangesh, Nobody can repay your debt. May God bless you.
– Rang Pal Gupta, Ex Deputy General Manager
A surprise indeed
...........Inflation has been the key concern for managing the interest rates, which if increased curtails the growth and if decreased fuels inflation; balancing both is truly a tight rope walk for the RBI governor and his team who continue to surprise the market by addressing key policy issues that has been plaguing for a long time. Nevertheless, as against the market expectations that the central bank would increase both the interest rates and the Cash Reserve Ratio (CRR) Mr. Rajan maintained status quo........
Remedy worse than disease
My View on "PINching the so called safety measure - P.Aravind":
The ‘PIN’ stipulation at sales outlets is yet another case of remedy being worse than the disease. This helps only sale of more card-swiping machines of the new generation. Soon, once this system is introduced country-wide, I will not be surprised if the cards are ‘linked to AADHAAR identity’. Again, new cards, new machines. What more we can expect from policy makers who claim that import duty increase is the ‘reason’ for rise in smuggling of gold? Improving security features in the card and cautioning clients against allowing ‘third party use’ of debit/credit cards are options that should be considered. Aravind has explained the extant practices in use of cards and in the given situation, maintaining secrecy of PIN numbers will be next to impossible.
- M G Warrier, Thiruvananthapuram
Obituary
Mr. K. Ramachandran (Baby), Retd. Treasurer, RBI, Chennai passed away on 17.12.2013. Mobile: 98410-32030 / 97400-6006
HinduBook review: Sahara -The Untold Story
......Assuming that each of Sahara's 30 million investors - that's equal to the population of Malaysia - had just one A4 size document each to account for their investments in Sahara's debentures, the papers stacked up in a pile would be 3,800 metres tall, or 52 times the height of the Qutub Minar. The documents are stored at the office of Stock Holding Corp. of India Ltd (SHCIL) House, at Mahape, Navi Mumbai. It's one massive building spread across five acres - one kilometre away from the Thane creek hazardous waste disposal facility. The vast storage space at SHCIL was built to store share certificates..........
Agricultural Banking - Book Review by P.P.Ramachandran
.......An ideal system of agricultural credit would balance policy objectives with farming needs. Dr. Raju has a post script on the Food Security Act. its implication on the future. He believes the Act makes good politics and bad economics in one stroke. It fixes no accountability for failure to implement provisions of the Act. This book is a thoroughly scientific analysis of India’s Achilles Heel. The author has provided insights into how the policies for agricultural banking has evolved over the years and how they are shaping up today
MORE RBI VIGIL OVER BANKS - This day that age - December 21, 1963 - The Hindu
The Lok Sabha on December 20 passed the Banking Laws (miscellaneous provisions) Bill to give the Reserve Bank enhanced powers for stricter supervision over commercial banks, and for ensuring more effective supervision and management of the monetary and credit system. Several Government amendments and a few moved by Mr. R.R. Morarka (Cong.) were incorporated in the Bill before it was approved. Explaining his amendments to clause five, Mr. Morarka said they sought to make the intentions of the Government “clear and precise”.
The Hindu
Muslim MPs write letter to Chidambaram on interest free banking
...........The signatory MPs, ten in total, in the letter have demanded to take necessary action to implement ‘Interest Free Finance’ as recommended by Dr. Raghuram Rajan committee “to meet the inclusive financial policy of the Government.” “We request you to arrange a consultation with the concerned authorities including the Governor of RBI for sorting out Legal and Technical apprehensions to implement the Recommendations on the subject. We will extend necessary Subject expertise,” demands the letter.............
‘RETURN SOILED CURRENCY NOTES, GET NEW ONES FROM BANKS’
Mysore, Dec. 21- In view of the Reserve Bank of India (RBI) prohibiting the circulation of soiled, defaced and mutilated currency notes from Jan. 1, 2014, members of the KMPK Charitable Trust launched an awareness campaign at the Agrahara Circle on Dec.19 and distributed pamphlets among the public, directing them to get their soiled currency notes exchanged for new ones at the banks..........
Confusion follows RBI circular on scribbled notes
..........“We have tried to get information regarding such directive of RBI. However, we have not been able to find any such official circular of RBI. The circular which are available on RBI website on soiled currency note directs commercial banks for non-issuance of currency noted either in stapled format or the currency notes which are soiled or scribbled,” the National Secretary General of CAIT, Praveen Khandelwal said in a written letter to the RBI Governor, Raghuram Rajan. CAIT further requested the RBI Governor to issue a notification or advisory for non-acceptance of Indian currency notes having anything written or scribbled to commercial banks for non-acceptance from January 1, 2014............
RBI proposal on corporate debt Restructuring
.........The RBI will set up a Central Repository of Information on Large Credits (CRILC) – an entity to keep track of “large credits”. The RBI’s definition of “large credits” is not really large, as accounts with a fund and non-fund exposure of Rs5 crore, and current accounts with an outstanding balance of Rs1 crore will be covered by the CRILC system. Where an account reaches SMA-2 status, banks and larger NBFCs (systematically important NBFCs) will report the account to CRILC.........
NBFCs under central bank scanner in Chhattisgarh
........The issue figured top in the agenda of state-level coordination committee meeting of the Reserve Bank of India—country’s central bank. The meeting was chaired by RBI Bhopal Region Director P R Ravi Mohan. “The meeting stressed for taking up extensive campaign to aware people about the risk associated with investing in the NBFCs,” a state government spokesperson said.......
Misuse of bank guarantees, letters of credit on the rise
........The reason for the devolvement of LC usually is that the buyer (or importer) refuses to pay the bank at the end of the credit period even though the imported consignment has been disposed of and profit pocketed. A senior Union Bank of India official pointed out that if the RBI allows sanction of non-fund based facilities by banks to non-customers it could trigger predatory practices.............
Credit card dues for 90 days are NPAs: RBI
....“The gap between two statements should not be more than a month,” the RBI said while adding that banks are currently following ‘divergent’ practices with regard to asset classification status of credit card accounts. “While some banks reckon the due date specified in the statement for payment of minimum amount due to determine the over-due status, some banks reckon the subsequent billing date to determine the over-due status of the minimum amount due,” the RBI said in a notification........
Worried over ranking, IIT-Delhi to hold first-ever alumni meet
......... “These include many successful entrepreneurs, corporate czars and senior decision-makers in the government. The illustrious list includes the RBI Governor, Dr. Raghuram Rajan,” he said, while explaining that more than 2,000 alumni were expected to participate in the event............
Manager duped of Rs1.51 L
.......“As per the RBI guidelines, the person who is exchanging currency should check documents like passport, visa, identity card of the person with whom he is transacting. Also currency exchange should happen only in offices. Gaikwad had himself gone to the hospital and exchanged the currency.”..............
Friday, December 20, 2013
RBI will definitely hike rates if inflation remains high in Jan: Subir Gokarn
....If that happens, there would be some softening, but overall, the message was that this is not a reflection of the end of the tightening cycle, but just a wait and watch policy and that is the message that the markets need to take. I do not think the markets misread it, because even if the rates were not increased, the tone of the message was almost been as though an interest rate hike was inevitable and if we do see inflation numbers surging in January or remaining quite high in January, one of ..............
Read - ET......
RBI policy: Rajan is making same mistakes as Subbarao
..........In these circumstances, Rajan had only one thing to do: deliver a shock to the system by raising repo rates substantially – say by 0.5 percent or even 1 percent – so that the government is forced to act on its core revenue deficit. Now it won't. By chickening out, Rajan has flunked his test. He is making the same mistake made by his predecessor D Subbarao – giving the government too much of the benefit of doubt. He has eroded his own credibility as an inflation fighter.
Rajan’s holding operation
.......But keeping the key bank rate on hold for the time being suggests that the central bank is equally keen to provide whatever little push it can to growth. Without accelerating the growth engine, it will be hard to tame inflation. If supply side problems account for high inflationary pressures in the economy, the onus to provide correctives would actually lie with the government. No hard economic decisions can be expected...........
Rajan's Pause Gamble Muddles Message
......Is this time different? There is little dispute that consumer prices will continue to rise at 11% pace, or more in the months to come. But it may not fall drastically either. Also, Rajan’s belief that savers should have positive real interest rates is still far away. That means either inflation has to cool substantially, or rates may have to move up. Which one will walk how far?...........
A breather
...Inflationary pressure is still the larger trend which RBI has preferred to study further. GDP growth has been pegged 4.7 per cent in fiscal 2014, and the lacklustre growth of manufacturing and services, not to mention the IIP deceleration of over 1.5 per cent, does warrant a vision beyond inflation firefighting. Here, a trim-down of the earlier interest rate hike would have helped industry and banks alike. But the dangers of NPAs spiralling of control and RBI’s proposals to pre-empt delinquencies seem to have gone down well with state-run banks.......
A wait-and-watch policy
...............Persistent inflation reinforces inflation expectations. While maintaining that there is no room for complacency, the RBI feels it has enough reasons to wait and watch. For one thing, there is evidence that vegetable prices have started coming down. Second, the disinflationary impact of stable exchange rates will ease the pressure on prices. Finally, the lagged effects of monetary tightening since July should help. The decision not to raise the rates is obviously a debatable one. There is no room whatsoever for complacency...........
Has Raghuram Rajan succumbed to Congress led UPA's pressure?
.......So what has happened to the man who believed, ‘If you can keep your head when all about you...Are losing theirs and blaming it on you...If you can trust yourself when all men doubt you’? What has happened to the man who proclaimed to take necessary decisions even if he does not receive ‘facebook likes’ for them? Has India’s central bank governor succumbed to government pressure to save his position? Does the RBI governor feel insecure? Why is the governor not adamant anymore over economic reforms? What is withholding the former Chief Economist to Government of India (GoI)?.........
A balancing act
......the apex bank has softened its stance on inflation and Rajan is perhaps losing his credibility in arresting inflation. Sometimes, no decision also amounts to a good decision. Remember, ........
RBI hope on prices not shared widely
.....Defending its stance, RBI said, “There are indications that vegetable prices may be turning down sharply... In addition, the disinflationary impact of recent exchange rate stability should play out into prices.” However, economists still feel WPI inflation would remain elevated in the coming months. “Even if we go by RBI’s presumption of a likely decline in food prices, the remaining impact of rupee depreciation and continuous adjustment in diesel prices will keep the inflation high,”.........
Its too early
My View on "Limitation of RBI’s monetary policy in taming infl...":
It may be too early to come to conclusions about RBI’s (Read Dr Rajan’s) intentions while leaving the rates untouched this time. Perhaps, this may be just to give signals to speculators that RBI doesn’t go by market gossip. RBI has never claimed changes in base rates alone or even a combination of traditional Monetary Policy measures in the central bank’s armoury can manage inflation. Every time RBI’s policy statements contain or are followed by ‘expectations’ from GOI on various ‘possibles’ from fiscal policy angle. One of the objectives of truncating RBI and making the central bank an organisation handling only Monetary Policy and Financial Sector Regulation is to take out responsibilities now with RBI which are giving headache to Finance Ministry.
- M.G.Warrier
India prepared to deal with Fed taper: Chidambaram
.....Markets have already factored in the decisions of the US Federal Reserve, the finance minister said in a statement. To highlight that the government and the Reserve Bank of India (RBI) are working together, the finance minister said he has spoken to RBI Governor Raghuram Rajan on this issue..........
Cabinet proposal soon to constitute 7th Pay Commission for revising salaries of 50 lakh employees
....According to information available, the government's intention to constitute 7th Pay Commission before going for polls is clear as it has made provision of Rs 3.5 crore in the second supplementary demands for grants in this regard which was approved by Parliament in the just concluded Winter Session. Earlier in September this year, Finance Minister P Chidambaram had announced that Prime Minister Manmohan Singh has approved setting up of the 7th Pay Commission...........
SMEs playing key role in development of social, finance sectors: RBI General Manager
........."The small and medium industries are playing a vital role in the development of financial and social sectors. "Reserve Bank, along with both the state (Andhra Pradesh) and Central governments, is implementing special programmes for encouragement of SMEs," said RBI General Manager (rural planning and credit) R S Das. He was addressing a conference organised by RBI, Hyderabad, here yesterday. Bankers, industrialists and district officials participated in the event. "The loan sanction has been increased to small and medium industries, but the sector is encountering certain issues which are being addressed by the Prime Minister's Advisory Committee and discussions are going on," Das said.............
PINching the so called safety measure - P.Aravind
Recently RBI have stipulated that we type PIN when we use our Debit Cards at Point of Sale (Shops, Restaurants etc). I accept this is to protect the interest of the customers, but it is also exposing our secret PIN to public. While some shops gave us access to the Swiping Machine to type our PIN in privacy, there are some places like large restaurants, the waiters take our card and also ask for PIN to be given to the Cashier for making payments. In some places the cashier asks us to spell the PIN loudly across the counter while others watch. Now a days we read in newspapers about cloning of debit/credit cards. We are being constantly advised not to share our PIN with anybody, (even with our spouse). Are we not exposing ourselves for frauds by publicly sharing our PIN? Is there no other way to protect our interest? Hope RBI will have a rethinking on this so called safety measure.
- P.Aravind, Former Regional Director
BS Banker of the year: Aditya Puri
........The country's second-largest private sector bank, the jury felt, had benefited hugely from Puri's "common-sense banking" - keep things simple, never allow retail customers to over-borrow, and refrain from lending to companies that have over-leveraged themselves. The jury, headed by Subir Gokarn, former deputy governor of the Reserve Bank of India, also said the bank's greatest strength was its ability to maintain a consistency in quarterly credit growth, across credit cycles..........
Reserve Bank of India to issue new currency of various denominations
.......As per the information provided by the RBI, the organization would shortly issue Rs 100 domination currency incorporating the new rupee symbol and without any inset letter. All the new bank notes would bear the signature of Raghuram Rajan, Governor, RBI, India. The year of printing of the notes would be 2013...........
IDFC not eligible for bank licence as fgn holding exceeds 50%
..."The Board of Directors on December 19, passed a circular resolution approving postal ballot process for seeking an enabling resolution from the shareholders to authorise the board...To keep reducing ceiling limit of the foreign shareholding from existing 54 percent to 49.9 percent in various stages...," IDFC said in its filing. It further said that in case it does not receive the bank licence from RBI, it "will take steps to reinstate the ceiling on the foreign shareholding back up to 74 percent. The RBI guidelines require that the eligible promoters of a bank should to be 'owned and controlled by residents'.......
Rising non-performing assets a concern, says Andhra Bank CMD
..........“The NPAs will continue to impact the third quarter. There are some more slippages left on the NPA front in the current quarter. We do not know about the fourth quarter though.” Going by the broad indications of the Reserve Bank of India, the bank was not keen on lending to commercial real estate..........
RBI’s new NPA norms: the spirit is willing, but flesh is weak
.......Perhaps the RBI’s intention is not to just allow restructuring of loans, but the restructuring of companies since it is advocating leveraged buyouts (LBOs). However, even that is not easy for listed companies because of a whole lot of norms put in place by the capital markets regulator. A buyout will not only mean buying the promoter stake, but also that of the public, in which case ........
Kodagu’s PLP for 2014-15 unveiled
The Potential Linked Credit Plan (PLP) prepared by the National Bank for Agriculture and Rural Development (NABARD) for the year 2014-15 has been put at Rs. 3.035 crore. The PLP was unveiled at the Corporation Bank—lead bank for Kodagu—on Thursday by an official from the Reserve Bank of India, Anand Babu. Credit projections to the agriculture sector are estimated at Rs. 2,666 crore, including Rs. 1,888 crore for crop loans.......
More banks hawk loans gone sour
...........According to Reserve Bank of India (RBI) data, gross NPAs of commercial banks ballooned from Rs 94,121 crore (2.36 per cent) in March 2011 to Rs 236,245 crore (4.2 per cent) by end-September 2013. There are growing signs of banks becoming ready to sell some of the bad loans in their portfolios, to keep on holding these in the hope of realising value. The pace of growth ........
Taxes deflate inflation bonds
........All in all, the tax department takes back a part of the benefits that the government planned to give. One hand of the government gives, and the other hand takes back a part of it. This defeats the very purpose of providing relief from inflation. Inflation affects personal expenses, which are met after taxes have been paid. The net increase in income has to be higher than the inflation rate for the bonds to really protect savings. One wishes that ..........
Rs2 crore worth blood diamonds sneak into Gujarat from Nepal
In the wee hours of Wednesday, the Directorate of Revenue Intelligence (DRI) sleuths made a shocking discovery when they pounced on a family of smugglers ferrying, blood diamonds worth Rs2.12 crore, near Memco on the city’s outskirts. They also found 1.5 kg gold worth Rs50 lakh with the smugglers. This discovery couldn’t come sooner. For on Wednesday, RBI governor Raghuram Rajan said curbs on gold import would incentivise smuggling of the precious metal, while he was addressing the RBI’s third mid-quarter review of monetary policy...............
Thursday, December 19, 2013
Raghuram does a Rajan
RBI gets its priorities right - A.Seshan
........What is important is the strong message coming through, both in the press release and in the interaction of the governor with the media, that the RBI is not soft on inflation. There is a reassuring statement that, if the expected fall in inflation does not take place, the central bank will take appropriate action even before the next review. Though growth is mentioned, there is not much focus on it. In fact, comfort is indirectly derived from the fact that slower growth should contribute to some relief in inflation!..................
Raghu Leela...
We
are trying to calibrate monetary policy primarily to target inflation
in an environment when the economy is weak. So, when we take action, we
have to be convinced. That’s why we were waiting to take action. When
there are a lot of uncertainties, you want to wait for more data to get a
sense… This is precise calibration of action. Rate decision does not
depend on a particular indicator but a variety of indicators. We need to
see substantial softening of headline inflation as well as some
momentum in the right direction of food........
Read - ET
Read - ET
Philanthropist Chaurasia wants to start a charity hospital
NAGPUR: Jaiprakash Chaurasia, a retired employee of the Reserve Bank of India, for whom philanthropy is passion, is now proposing to start a charitable hospital for the needy. "I have identified a land on the outskirts of the city, on Kamptee Road, and want to start a medical facility where doctors from the city could offer services," he said. Talking to TOI on Tuesday after returning from New Delhi where he received the Rashtriya Seva Ratna award from a non-profit voluntary organization Vishwa Sewa Parishad on Sunday, he spoke about plans to start a hospital. ............
Ooty to host workshop on mountain development
........On the occasion, the Deputy Chairman will present the Nilgiri Conservation Award to Dr. K. C. Chakrabarty, Deputy Governor of RBI and Dr. M. Narendra, Chairman and Managing Director, Indian Overseas Bank for implementing the unique and successful financial inclusion plan for the primitive tribes of Nilgiris.........
Aspects of foreign exchange, export discussed
...........Speaking on the occasion, Chief General Manager in charge of Foreign Exchange Department (Central Office), Reserve Bank of India (RBI), Mumbai, RN Kar said such awareness programmes in the name of town hall meetings must be taken as an outreach programme for making effective policies. Kar spoke at length about the various aspects of foreign exchange business and the incentives available to the exporters across the state. Regional director, RBI (Bihar and Jharkhand), MK Verma, while speaking on the evolution of foreign exchange business and various liberalized measures and facilities available to the exporters and manufacturers in Bihar, said the RBI being the regulator and supervisor of the Indian market is entrusted to oversee it...........
Against the current
......The policy decision indicates that the RBI's internal models do not expect this to happen soon. The internal assumption must suggest that demand will stay low and will not rise for another couple of quarters, by which time monetary policy contraction will have had an effect. When the RBI adopts a proper monetary policy framework, which Rajan has asked Deputy Governor Urjit Patel to work on, we can expect to see a clear inflation target and a way to get there. .........
RBI holds rate for now but warns of future hike
Bankers rule out rate cuts
.........“It really hurts the depositors, and we would not like to do (cut rates) that. Our rates are still higher than what they were on July 15, I see no immediate response towards the rate cut.”.............
Don’t Expect Central Bank’s Breather to Last
......Indeed, the phrase Mr. Rajan used in his remarks was “wide bands of uncertainty.” The RBI said it will act if there isn’t a “significant” reduction in headline inflation in the next round of data, or if core inflation doesn’t fall. In that case, the policy response will be “appropriately calibrated,” Wednesday’s statement said. No guesses as to what “significant” and “appropriate” will actually mean for the central bank’s purposes. Consumer and wholesale inflation data for December are scheduled to be released Jan. 13 and 14, respectively. Recent data releases have included sharp upward revisions to previous months’ inflation figures. The RBI’s suspicion is that price pressures are close to abating on their own. Recent high inflation largely is due to high vegetable prices, which in theory aren’t that affected by central-bank policy..............
RBI ready to act on off-policy dates: Guv
RBI
Governor Raghuram Rajan shied away from acknowledging that his decision
to leave things unchanged was a brave move, pointing out that in the
British comedy “Yes Minister”, ‘brave’ was the euphemism used by
bureaucrats to describe a foolhardy move............
Red - TOI
Red - TOI
Gold import curbs will spur smuggling: RBI
..........“I would have been happier if we had the current account deficit (CAD) that we have without significant curbs on anything, including gold. I think that is our aim. I think, we should aim to have a sustainable CAD without any distortions, like removing incentives for smuggling of gold [the 10 per cent import duty on the yellow metal has led to a spike in gold smuggling],” said Dr. Rajan. He was addressing a press conference to announce the RBI’s third mid-quarter review of monetary policy.......
Sensible pause
Given that the signals on inflation are very conflicting, RBI has done well to decide to wait for another month or so before it takes any action on hiking either the repo rate or CRR level—the latter is more likely to result in borrowing costs rising. As..........
India Inc lauds Rajan, says 'brilliant forward reading'
......."RBI's decision to keep the repo rate unchanged after two successive increases comes as a welcome breather. Ficci has been urging RBI as well as the government to bring the focus back on growth which has taken a serious beating.",....................
Why waste a rate hike?
.....Since weak growth momentum has restricted RBI’s degrees of freedom in using interest rates to fight inflation, it is also important to use the limited room to synchronise domestic policy action with evolving global dynamics. With possibility of tapering by the US Fed remaining high in January, a rate hike around the same time offers tactical advantage by bolstering India’s preparedness for the unwinding of liquidity stimulus. So, why waste a rate hike now?
Equity, bond markets cheer ‘Santa’ Rajan
Equity and bond markets saw in Wednesday’s RBI policy review a veritable Christmas gift and in governor Raghuram Rajan a lovable Santa. Equity markets that had been on a downward ride for the last six straight sessions and were anticipating a third straight rate hike, were pleasantly surprised by RBI’s no-hike policy. After ..........
Raghuram Rajan takes a calculated gamble by not hiking rates
........By every yardstick, RBI’s decision to hold on to the current policy rate despite rising inflation is a close call. Instead of going for an all-out attack against inflation and bottling inflationary expectations by being proactive, Rajan has preferred to play a game of catch-up. Not too many analysts are expecting a significant reduction in inflation numbers—both retail as well as wholesale—in December. If indeed that is the case, Rajan is merely delaying the inevitable. An action-less policy at this point is not in sync with his stated stance against inflation. Moreover, the time was ideal as there would not have been an iota of political opposition to a rate hike at this juncture............
Limitation of RBI’s monetary policy in taming inflation
..........The RBI measure to increase inflation in the past has only retarded growth. The RBI needs to understand that even if inflation comes down in near future, it may be because of factors such as better supply of foodgrains post-kharif crops. Given the policy measures adopted by the government during recent years, it is better that we learn to live with new normal inflation or rethink our policy measures. .......
Governor’s Master Stroke Defies All Expectations
.....The
hike in interest rate was expected as inflation has been stubbornly
high. Let us understand why it makes a lot of sense despite high
inflation and desperate need to tame it. The primary contributor to
price rise is food inflation which has been in double digits for 20
months now. The Achilles heel is vegetable prices, hurting the common
man. The other large contributor to inflation has been fuel prices. Yet,
the fact is RBI’s monetary policy can achieve nothing as far as food,
vegetables or fuel prices are concerned...........
RBI to keep vigil on inflation
...The
central bank admitted the decision to maintain the status quo had been a
close-run thing but that the situation merited a pause in the policy
tightening war on inflation. RBI will be vigilant on the inflation front
and won’t hesitate to take action whenever it deems necessary. “Current
inflation is too high,” it said in a release on Wednesday. “However,
given the wide bands of uncertainty surrounding the short-term path of
inflation from its high current levels, and given the weak state of the
economy, the inadvisability of overly reactive policy action, as well as
the long........
Read - ET
RBI kept key rates unchanged to push growth, says Montek Singh Ahluwalia
......."Keeping in mind, the need to give the economy stimulus and not wanting to take too hasty a step, the (RBI) Governor has surprised the markets. Markets were expecting a hike," Ahluwalia told reporters here. "He (RBI Governor Raghuram Rajan) is expressing confidence that price inflation will come under control and let's hope that he is right. If he is right then definitely in retrospect it will be proved to be very good decision,"..........
PSU banks' staff go on strike; operations hit
Divide to rule
My View on "CURSE OF ’13 OFFERS A FEW LESSONS":
Institutional reforms are not easy come by in a world ruled by hypocrisy. Banking sector is in dire need of governance reforms. It is time to see whether the CMD posts in PSBs need separation of Chairperson. Time to see how the SBI and other private sector banks with non-executive chairmen are performing with division of functions between the Chairman and Managing Director and draw lessons. It is also time to see the effectiveness of the various committees of Board in Banks are functioning in terms of their roles and responsibilities.
- Yerram Raju
Making NPAs perform
......... Though some part of this exists even today—such as the provision to transfer part of the borrowers’ equity to the banks or to put it in an escrow account to allow for change in management control—RBI is strengthening the provisions by, in some cases, codifying them. Wilful defaulters—and it is up to the banks to classify lenders in this fashion—will not be eligible for restructuring and, if an exception is to be made, each and every bank in the consortium has to approve this. Here’s the added twist......
RBI should have given spl push to engineering exports: EEPC
........“RBI should have given a special dispensation of interest rates to exports, which are key to maintaining stability on the external sector parameters like current account deficit,” EEPC India chairman Anupam Shah said...........
Bilateral Currency Swap Arrangement Between Reserve Bank of India and Bank of Japan
......The terms of the Agreement have been agreed between the Indian and the Japanese side in this regard. The Government of India has authorized Reserve Bank of India (RBI) to sign the agreement..........
Government to conduct debt switch mostly with insurers
..........RBI Deputy Governor H. R. Khan said the central bank was considering dealing directly with insurance companies, which are traditionally buy-and-hold investors and would not be as much affected by falls in bond prices. "A large number of long-tenure bonds are held by insurance companies," Khan told analysts in a conference call on Wednesday. "So they will be the ones who will be switching, and not the banks so much.".......
RBI surveys households in Bhopal on impact of inflation
....... "We have been provided with a questionnaire by the RBI for the door-to-door survey in Bhopal". Also, RBI wants to know impact of existing inflation and how it would affect all in three months from now. A few of the questions asked by the surveyors were how much your expenditure has gone up? and what is the difference in your foodbill and expenditure?...........
Tightening rules
....Asset deterioration of banks has been perceptible for some time now and by specifying the formation of a lenders committee, the RBI is clearly requiring a timeline from borrowers to settle their outstanding debt. While it would be officially acceptable to call the situation stable for now, the RBI has been pre-emptive in tackling any inherent instability in the banking system by changing the solution for ..........
‘Please tell me your ATM PIN’
........Retailers to restaurateurs, traders to merchants and most importantly customers are finding it difficult to incorporate the change. The most glaring problem is that of debit card holders being asked to share their PIN at merchant outlets where the cashier’s counter is not easily accessible..........
The GenNext currency
..........Bitcoins got visibility in India when bitfilm used it for the voting process and as prize money in its 13th International Digital Film Competition in Bengaluru. Reports talk of 30000-strong Indian BTC and e-wallet owners participating in TOR forums on BTC. CoinMonk organised India's first bitcoin conference in Bengaluru (December 15) where investors/enthusiasts/bankers gathered to convince the government and regulators that the bitcoin ecosystem would be a valuable economic innovation for unbanked India and for remittances. They talked of India's laxmicoin, the Rs.1.20-crore bitcoin transactions, and hoped RBI would form policies about it......
Shunted out of top 10 banks list, 'displeased' HDFC Bank wants rankings overhauled
..........HDFC Bank also sought to differentiate large or commercial banks with cooperative or small banks while working out rank for any bank as later normally have less presence or branch strength. "Cooperative banks should be put in separate category (for ranking purpose),"........
Bitcoin’s challenge
......Bitcoins can be mined by anyone who owns a computer and devotes machine time to running an algorithm which computes data blocks representing value. Like conventional currencies, it is built on the notion of scarcity. In this case, the difficulty of computation and the physical limitations of computer hardware create scarcity. ..........
Over 6,000 financial frauds in 2013: RBI
The Reserve Bank of India has reported 6,034 cases of frauds involving credit cards and debit cards in 2013, Milind Deora, minister of state for communications and information technology said Wednesday while answering questions on cyber crimes in Lok Sabha.......
Read - ET .......
Wednesday, December 18, 2013
CURSE OF ’13 OFFERS A FEW LESSONS
..............Although
Rajan’s regime had just four months this year, it has delivered on some
of the promises made on September 4 when he took charge, including a
repackaged interest rate futures. Silencing experts from airing their
opinion on interest rates, inflation, yields and the currency movement
may yet turn out to be his best achievement this year since their
unstoppable opinions harmed the markets more than helping it. Will he be
tested once a new administration comes in after general elections?
Read - ET
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