......This move, according to analysts, could infuse about ₹30,000-40,000 crore into the banking system. But whether this will have any impact by way of lower lending rates or more credit to the so-called “productive sectors of the economy” remains to be seen. Anis Chakaravarty, Senior Director and Lead Economist at Deloitte India, said: “This is a calculated move by the RBI and should give a boost to growth.” However, bankers seem to disagree that such a move will have any significant impact on lending as most banks have already deployed funds in excess of the statutory requirements in government securities. .......
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.
Wednesday, June 4, 2014
Things getting better for the economy? Here's what RBI's Raghuram Rajan thinks
Are green shoots of economic recovery round the corner? Are there any indications that the major factors that have worried both the Finance Ministry and Reserve Bank of India (RBI) have moderated? RBI Governor Raghuram Rajan certainly feels that the prospects of economic recovery look better.
Inflation not easing soon; rate hike likely by Dec: Analysts
...Governor Raghuram Rajan, while leaving all key rates unchanged, reduced the statutory liquidity ratio (SLR) by 0.5% to 22.5%, thereby injecting about Rs 40,000 crore into the financial system. Analysts described the RBI actions as "dovish". "If the economy stays on this course, further policy tightening will not be warranted," Rajan said......
Bandhan to go for listing after three years of banking
........."As per RBI norms, Bandhan Bank will get listed after three years of operation as a banking entity," Ghosh said. "The RBI has given us 18 months to start banking operations. .........
RBI approves re-appointment of KVB MD
The Reserve Bank of India has accorded its approval for re-appointment of K. Venkataraman as Managing Director and CEO of Karur Vysya Bank (KVB) for a further period of three years from June 1, 2014 to May 31, 2017, the bank informed the Bombay Stock Exchange on Tuesday.
The Hindu
Tuesday, June 3, 2014
RBI governor Raghuram Rajan meets Narendra Modi
RBI CGM resigns for being superseded
S Ganesh, Principal Chief General Manager (CGM) of Reserve Bank of India (RBI), who was in charge of expenditure and budgetary control, has resigned in protest as he was superseded for the selection of the executive director’s post. RBI has accepted his resignation and has relieved Ganesh from his duties........
PMO to have a fresh look at RBI dy governor's appointment
...........According to sources, while the finance ministry of the previous United Progressive Alliance government had recommended its choice to the appointment committee of the cabinet (ACC consists of several ministry's and departments including PMO), but the PMO had left the decision to the new government. Sources indicate the files will be referred to the PMO once again............
Bankers Salary Reduced, Hope from New Govt for Pending Wage Revision
.........It is unimaginable that salary for any regular worker can be reduced, without any fault on their part. But it is the hard reality for bank employees, who will be receiving a salary decreased by 2.40% from May 2014. Dearness allowance (DA) for bankers is dependent on the Consumer Price Index (CPI). A continuous decline in CPI during January, February and March 2014, led to decrease in DA by 16 slabs i.e. 2.40% of basic salary. The Dearness allowance of bank employees is link with index, so if index increases it increase and whenever index decreases DA of bank employees decreases. Bankers are hopeful that the new Govt under the aegis of Prime Minister Sri Narendra Modi would act swiftly to implement the long pending salary revision due since November 2012. It is memorable that........
Settle Urjit report first
It is just as well that the largely media-created hype over likely strained relations between RBI and government have been put to rest by finance minister Arun Jaitley and RBI Governor Raghuram Rajan’s co-ordinated statements on growth and inflation. But that still doesn’t leave us any the wiser over what RBI policy will be over the year. Certainly there will be ........
Modi Govt to have distinct mark on RBI credit policy review: ASSOCHAM poll
......As many as 76 per cent of the respondents in the 125-sized sample survey of the CEOs and economists said the RBI Governor is walking a tight rope as he knows the mind of the new Government which has been projected as pro-growth. On the other hand, he would have also been sounded by the new establishment about the people's expectations from the new government to hold the price line, especially of the essential commodities. Significantly, an overwhelming majority of the respondents felt that the RBI Governor's own expectations from the new Government ..........
Rajan, Modi & the supply side conundrum
With a new, development-focused government in place, the interaction between the government and the Reserve Bank of India (RBI) was expected to become a matter of debate. Some analysts have gone to the extent of doubting the RBI governor's ability to continue in the new dispensation. The impression that is sought to be created is that while the government will be focused on growth, an inflation-focused RBI may dilute the impact of government measures. Even the most cursory analysis suggests otherwise..........
Growth should be given priority over inflation: Bimal Jalan
..................I cannot comment on the RBI credit policy. This time around, we have twin problem as you know and you must have discussed it in a great length, inflation and growth but given the present environment -- speaking as an observer over the scene -- I would say that I would give weight to growth just now because the atmosphere is good. If growth takes place then supply will increase, manufacturing production will increase and I think that would have positive impact on our inflationary environment. So as an observer of the scene,..................
Raghuram Rajan is unduly worried about QE. Will he rethink the policy this time?
............The RBI is clearly not willing to loosen policy as yet on misgivings about the effects of withdrawal of stimulus by the Fed and other central banks. Is the RBI misplaced in this belief and is it effectively postponing policy easing to stimulate domestic economic growth? India’s GDP grew 4.7% in fiscal 2013-14, up from 4.5 percent seen in fiscal 2012-13 but still close to decade-low growth rates. Demand drivers are absent as seen from negative growth in industrial production, manufacturing and consumer durables in the last fiscal. The new government at the centre led by Narendra Modi would want to put the economy back on track. However, it should address..........
Growing NPAs in banks - efficacy of ratings accountability and transparency of credit rating agencies - R.Gandhi
Speech by Mr R Gandhi, Deputy Governor of the Reserve Bank of India, at the Conference conducted by ASSOCHAM (Associated Chambers of Commerce and Industry of India), New Delhi, 31 May 2014
...Growing NPAs is the biggest challenge for the banking industry. A slowing economy is bound to see an increase in NPAs. Notwithstanding the economic weakness, the NPAs of banks have registered increases since FY 2012 which is a cause of concern for us. The NPA increases have been more pronounced in case of the public sector banks. There are various factors affecting the asset quality of SCBs adversely, such as the current slowdown- global and domestic, persistent policy logjams, delayed clearances of various projects, aggressive expansion by corporate during the high growth phase etc. However, it is the shortcomings in the credit appraisal, disbursal and recovery mechanism of the banks, besides the economic slowdown that can in large part be held responsible for their high levels of NPAs. Lack of .........
EFFECTIVE BANK AUDIT - Emerging Challenges : M.G.Warrier
.....Performance audit is a concept introduced as part of commercial audit carried out by the then Indian Audit and Accounts Department in the late 60s. The purpose was to go beyond mere checking of accounts and ensuring that each item of expenditure.............
A bird in hand is better than two in the bushes
My View on "IDFC to shave off infrastructure loans to meet RBI...":
A bird in hand is better than two in the bushes goes the saying. Here is a real story where IDFC, the only agency to provide funding support for infra projects is killed to create a commercial bank which may focus on all types of financing. It is now planning to sell off Rs.5000 cr of infra project portfolio to comply with the RBI requirements for commercial bank licence. Infra project funding may be or may not be in its portfolio as a commercial bank. It is an irony that the new govt at the Centre under Mr Modi has emphasized the need for funding support for infra projects for speedy growth of economy. At the same time, the only infra dev organisation has been converted /killed to make way for a commercial bank. In hindsight, the RBI may think that their decision to issue banking licence to IDFC may not be met with the objectives of the GoI for infra development in the country. So, RBI/ GoI should rethink and cancel the licence issued to IDFC and strengthen it by infusing more funds for infra dev projects.
- Dr.Santhanam
Bankers Fear CVC More Than NPAs
When BK Batra, deputy managing director of IDBI Bank, was to be promoted
as chairman of a state-run bank, a Central Vigilance Commission note
stalled it. His crime? He did not ensure due diligence on farmers in a loan sanctioned to a company that was in contract farming. Bankers know that nothing can be more flimsy than this because the same
account is just a bad loan for any other bank and no one is affected
since no officer associated with such a loan is due for promotion........
Window Dressing of BS to bring down NPAs in March - Dr.T.V.Gopalakrishnan
.......Generally banks resort to window dressing of balance sheet and Profit and Loss account in March and they arrive at some presentable figures in respect of NPAs, profit, deposits and advances. This is done with the full knowledge of top management of banks and auditors seldom object to it.........
Read.......
No possibility of Nagpur DCCB’s revival: RBI defends its action in HC
.......In the submissions sworn-in by D B V Raju, the Assistant General Manager, Rural Planning and Credit Department, Reserve Bank of India, it has been stated that the impugned order was communicated to the petitioner-bank, as there was no possibility of revival of the bank, as it is in no position to pay its present and future creditors as and when their claims are to accrue and in such a situation allowing the bank to operate would have been detrimental to its present and future depositors and these banks’ applications for licence have to be rejected. Allaying any fears of damage to the interests of depositors of the bank, if order to liquidate the Bank is passed, it has been stated in the RBI’s submissions, that in that eventuality also around 98 per cent depositors' interest is well protected in view of DICGC provisions, which guarantee refund of up to Rs one lakh to every depositor............
RBI approves Kamath’s appointment as ICICI Bank’s non-executive chairman
The Reserve Bank of India (RBI) has approved the appointment of K.V. Kamath as non-executive chairman of ICICI Bank Ltd by three years effective from 1 May until 30 April 2017, the bank said in its annual report. The banking regulator has also approved the re-appointment of managing director and chief executive officer (CEO) Chanda Kochhar and executive director N.S. Kannan for three years starting 1 May 2014 up to 30 April 2017, while executive director K. Ramkumar’s appointment was approved effective 1 February 2014 to 31 January 2017, the bank told its shareholders in the annual report........
Free non-home bank ATM transactions may be cut to two
.....Banks in association with National Payments Corporation of India has sent a proposal to banking regulator to reduce the number of free transaction at non-home branch automated teller machines. Currently, consumers are allowed five free transactions at a non-home bank branch ATM. Banks have also requested the interchange fee--the amount that one bank charges the other bank if a consumer uses the ATM of its non-home bank-- to be revised. Currently, ..........
RBI mulls cap on banks’ group MF sales
RBI is planning to introduce a cap on the percentage of mutual fund products of group asset management companies (AMCs) that banks can sell to investors. The central bank is looking at capping the sale of group MF products/schemes by banks at 25-30%, said sources. An email sent to RBI remained unanswered at the time of going to press. Sources also said .........
Finmin plans to cut govt stake in PSBs to 58%
The finance ministry is drawing up recapitalization plans with government equity in public sector banks set at 58%, even as the draft report of the PJ Nayak committee has recommended cutting the Centre's stake in state-owned banks to under 51%........
Read - TOI
Read - TOI
Don’t let your bank accounts idle away
......Besides this, there are many operational restrictions on dormant accounts. For instance, a dormant account holder will not be able to transact through his ATM, or via internet and phone banking. New cheque books are not issued to dormant accounts. Some banks even have restrictions on customers issuing cheques from a dormant account. An account which has been dormant for a long time could also escape your memory, especially if you have changed addresses. This could deprive you and your legal heirs of the money lying there..........
Armed with RBI Nod, Premji to go Hunting in China & US
........Premji Invest, the eponymous family office of Wipro founder Azim Premji, will now invest directly in technology companies in the United States and China after receiving RBI's approval to do so. The family office, which has a corpus . 10,000 crore, could potentially of over ` set aside nearly a quarter of it for making investments overseas, according to a person familiar with the plans..........
Read - ET
Read - ET
T-Govt. opens RBI account with Rs.1.38 cr.
........The RBI was authorised to open an account in the books of Central Accounts Section, RBI, Nagpur in the name of State Government of Telangana with an amount of Rs. 1.38 crore. The other formalities including documentation and execution of agreement between RBI and the State would be executed by the authorised officials of Government of Telangana in due course.............
Monday, June 2, 2014
Budgetary challenges for new govt - Dr.S.S.Tarapore
.......While undertaking monetary- fiscal coordination, it is essential to appreciate that easing of monetary policy can be sequenced only after fiscal correction and inflation is brought under control. In other words, reduction in inflation must precede easing of monetary policy. To the extent there is fiscal correction, there would be headroom for easing monetary policy. Hence, there is need for caution in undertaking monetary- fiscal easing before inflation comes under control........
Read - FPJ
Five fiscal fixes - Dr.Subir Gokarn
High on the government's priorities should be to gain control over the fiscal situation. Between the Budget for 2014-15 to be presented next month and the one for 2015-16 in February, every opportunity to deal with both short-term and structural fiscal problems must be taken. Here is a list of five issues that require immediate attention..............
Bad loans a cause of concern: RBI Deputy Governor
.........."The final (NPA) figure for March 2014 is yet to be known; while some may view this ratio as reasonable, given the economic conditions prevalent in the country and elsewhere, the total stressed assets in the banking system (including restructured standard assets) as at December 2013 was 10.13 per cent of the gross advances of the banks, which is a cause of concern for the Reserve Bank," .........
Happy augury for the RBI
......As Subbarao put it, "An apolitical central bank, operating autonomously within a statutorily prescribed mandate and with a longer time perspective, is an effective counterpoise to a democratically elected government which typically operates with a political mandate within the time horizon of an electoral cycle…. But this is a delicate arrangement and will work only if the government respects the autonomy of the central bank, and the central bank itself stays within its mandate, delivers on that mandate and renders accountability for the outcomes of its policies and actions." Initial statements from Jaitley suggest he recognises the need to work together with the RBI. Historically, non-Congress governments have had a better relationship with the RBI than Congress-led governments............
RBI governor Raghuram Rajan meets Modi
Ahead of monetary policy review on Tuesday, Reserve Bank Governor Raghuram Rajan on Sunday called on Prime Minister Narendra Modi and is likely to have discussed the macro-economic situation and issues related to price rise. The RBI’s bi-monthly policy review on June 3 will be the first after Prime Minister Narendra Modi assumed office on May 26. Last week, Mr. Rajan also met the newly appointed Finance Minister Arun Jaitley and had said fighting price increase is a priority, stressing that the central bank has always maintained a balance between the need to check inflation and prop up growth............
Why Arun Jaitley must back Raghuram Rajan
..............New Delhi will have to cooperate with Mumbai if the inflation dragon has to be tamed; the two masters of our economic universe often worked at cross-purposes in recent years. Jaitley and Rajan will have to establish a climate of trust akin to the situation when Manmohan Singh was finance minister while C. Rangarajan was governor. Another smooth working relationship was between Yashwant Sinha and Bimal Jalan. The battle against high inflation will be a long one, which is why cooperation between the finance ministry and the central bank is important........
Money changers unhappy with RBI
......Yet, from visiting the RBI fairly regularly over the years, she and her counterparts from places such as Model Town, Patparganj and Chandni Chowk are now allowed to enter the bank premises only for an hour once a week. So after standing for hours in the heat this Friday, Ms. Gupta was amongst the most vocal when security guards at the RBI did not let the group of money changers through even though they had made it well in advance for the 3 p.m. entry............
Soiled notes and a story
......Balbir can get issued only one bundle of notes at a time from the RBI Issue counter. He usually takes a bundle of Rs.1000 of Rs. 10 denomination which he exchanges for soiled notes against Rs.1040 at a shop in Kachha Bagh. “During the wedding season, I can make Rs.1100 to 1200 from the same bundle,” he says. The new money also ends up being garlands against which the RBI has been appealing to the public as it removes money from circulation..............
Achche din for taxpayers?
.....There are millions of taxpayers, all of whom are susceptible to this frustrating situation. And I have not even gone into the draconian penal provisions for failing to deduct tax at source. Mr Modi, please get this tyrannical TDS removed, in order to usher in achche din for taxpayers. As someone said, taxpayers are like "customers" of the income tax department. They deserve better.
Banking on public faith
My View on "Make the PS Banks Performing assets of the economy...":
Cannot but fully agree with TVG's views. It's time the govt sheds it's strangle hold and allow the PSB's to prune the bank in an "all round fashion" and revive the public faith in the banking system. "Naik" committee recommendations on reduction of govt stakes in PSBs must be immediately implemented with the ulterior objective to revive the public faith in the banking system.
- Muralidharan , CGM , Retd. (But active)
Right diagnosis
My View on "Make the PS Banks Performing assets of the economy...":
This is a right diagnosis, crisply given. If treatment gets delayed further, India will regret having ignored warning signals, risking a crisis in the financial sector which the country can ill-afford. Supporters of private sector, please note the private sector which sucks the creamy layer did not show any willingness to go deep and support national priorities. If evidence is needed, look at the share of private sector in banks, as of now. Please do not argue that new bank licences will solve this issue. We have already almost destroyed cooperatives in many states. Let that fate not swallow Indian Public Sector Banks.
- M.G.Warrier
Thought provoking
My View on "The Robbing Hoods - T C A Srinivasa-Raghavan":
This article is thought provoking. Except generating black money and dishonesty even among honest and good people,the IT has not helped the economy in the economic sense.This has created only socio-economic problems benefiting the politics as rightly indicated.If the BJP can remove the Income tax, the party can claim to have achieved a revolutionary change benefiting the economy, the society and politics a lot. The loss of revenue can be easily made up by saving administrative cost,enhancing the savings, investment and production cycles with attendant benefits etc. Further, the Government can raise revenues through dividend tax above a cut off limit, enhance STT which is not inflationary and which is affecting only those who are in the capital markets which is emerging as a speculative den instead of as a capital formation avenue. Or else the Income tax can be in the range of 2% and 10% on all incomes without any exemptions what so ever.
- Dr.T.V.Gopalakrishnan
Views for CHANGE
My View on "Sustainable prosperity - V.K.Sharma":
Issues of governance and regulation raised here need immediate attention. This is the right time for government to think 'differently' and act keeping in view the national priorities which were always known, as Indian Constitution had incorporated the principles that government should follow to make the life of 'WE THE PEOPLE' (to whom it was 'given') better. The message from AAP, the repeated assertions by Congress for over 65 years about people's rights, Modi's promise of right governance...all should converge to make BHARAT emerge and take the position in the world it deserves. More and more open expression of views like this will help opinion to evolve in favour of the majority of the country's population waiting for a CHANGE.
- M.G.Warrier
Reinventing Development Economics
...........Dr. Mujumdar has asserted that massive imports of gold threatened to erode the strength of our economy through their impact on household sector financial saving and on current account deficit and on the Balance of Payments. He has recommended imposition of quantitative ceiling on gold imports. The Second Section is on “Monetary Policy”. The comments of the Economist, London — “Judging by the numbers, RBI is among the World’s best central bankers. RBI has more brains, muscle and integrity, relative to the best State Bodies”. Thanks to the RBI the Nation escaped the Asian Currency Crisis of 1997 and the Global Financial Crisis of 2008.........
Read - FPJ - Book review by P.P.Ramachandran
RBI may stick to status quo on interest rates
........So will the Central Bank surprise the market? Not many believe so. "Although headline CPI inflation has come off recently, inflation expectations are still quite entrenched and outside the comfort zone of the RBI," Singh added. How long would RBI keep the capital costly? Singh does not see any possibility of a rate cut or hike over the course of this year, unless there are dramatic changes on inflation and growth outlook. But, does high cost of capital not hurt investment that is badly needed to fix the supply-side bottlenecks? .....
Bank unions demand repeal of PJ Nayak committee report
............."The committee report is highly unfair, unwarranted, unjustified, rhetorical and pro-capitalist. It should be scrapped. The health of the public sector banking industry is of prime concern, as a major chunk of the profits is being utilized to write off bad loans running into lakhs of crores of rupees. Today, the total deposits in the banking sector amount to more than Rs 78 lakh crores, while the country's per annum budget is Rs 12 lakh crores. This huge saving needs security, which is provided only by public sector banks and not by the private ones, as many of them have gone bankrupt globally............
‘Think out of box to reach the unbanked’
........There is a need to change the way we look at financial inclusion. It shouldn’t get reduced to a target which needs to be fulfilled. Because in that case, achieving numbers become important and not what we have really achieved. Financial inclusion should be a by-product and not an objective by itself. Here also, the services envisaged should be based on an assessment of demand from the beneficiaries. If you look at how we operate; first we identify people running small enterprises who need small capital but are denied by the formal banking sector. Then, after we get engaged, we discover various other unmet needs. After identifying and assessing such needs, we start supporting these, increasing our engagement and helping the beneficiary grow economically in other areas too. We see this as real financial inclusion. Reaching these people is a high-cost proposition. So there should be enough flexibility and freedom to the lenders.........
Read - DNA
Sebi-FMC merger talks back at North Block
......The finance ministry officials, though, are convinced that a merger of the bodies will have its inherent advantages, as regulations in securities, commodity futures and currency derivatives will converge. However, even if the merger happened, the Reserve Bank of India (RBI) would continue to be an interface for currency derivatives, they said. A convergence would make it easier for the watchdog to track movement of money among a group's companies engaged in different tradeable products, explained an official. Besides, it would reduce transaction costs for markets, since companies might not need separate set-ups to comply with regulations...........
Fraud Alert - Contact Reserve Bank of India Immediately For Your New ATM Master Card
........However, Kindly contact the Customer Service Department of ATM Master CARD
Email Address:( rbbnkdmin@admin.in.th )
Regional Director : Shri Deepak Singhal, Reserve Bank of India
Telephone:+919643120877
try and contact the Regional Director : Shri Deepak Singhal, Reserve Bank of India for your ATM Card as soon as possible to quicken the process of your ATM Card before your Bank Draft gets Expired............
Chit fund scam: Ask people to deposit money in banks, post offices, RBI tells Orissa govt
....After the CBI took over the probe last month, the SIT led by its joint director Rajeev Singh had started its probe in Orissa where the scale of the scam was found to be much larger (chit fund firms collected around Rs 4,600 crore in Orissa as compared to Rs 2,460 crore in West Bengal). Now, in a letter to the finance department, the RBI has suggested that the Orissa government raise awareness among people through print, TV and radio that they should deposit their money with banks or post offices only...........
IDFC to shave off infrastructure loans to meet RBI norms
......IDFC's executive chairman Rajiv Lall, whose name has been proposed to the Reserve Bank of India for the post of managing director and chief executive officer of the banking entity, had earlier indicated that the lender would trim its infrastructure exposure. "As we prepare ourselves to be compliant with regulations, we will have to expand our book and build CRR ( cash reserve ratio) and SLR (statutory liquidity ratio). The idea is to diversify the asset portfolio. We will shrink our............
Needed: A Swamy and Jethmalani SIT
............The SIT that has been created to tackle the gargantuan problem of black money in India, not to mention the trillion-plus dollars in illegal accounts held abroad by Indian nationals and their close relatives, is likely to come up with disappointing findings in a few years' time, so that critics of Mr Modi can argue that he is not serious about confronting the problem of unaccounted money. At least a few very big fish need to get snared in the accountability net before 2019 for Prime Minister Modi to show that, unlike his predecessors, he is sincere about ending corruption.............
Time for ECB to put money where its mouth is
......Action being readied includes taking the ECB's deposit rate negative for the first time - effectively charging banks to park money at the central bank in the hope they will lend it out instead. The ECB insists it sees no threat of deflation but euro zone figures for May, due before it meets, are forecast to show inflation at just 0.7 percent. That is within what ECB President Mario Draghi has termed the "danger zone" below 1.0 percent for the eighth successive month.
Probe report blames MSC bank board led by Ajit Pawar for losses
.....A report by the state Cooperatives department has pinned the blame for losses worth nearly Rs. 500 crores in the Maharashtra State Cooperative (MSC) Bank on its board, which was led mainly NCP politicians including the Deputy Chief Minister Ajit Pawar. The bank’s board was disbanded in 2011, after directions from the Reserve Bank of India because it was deeply in the red. .............
Ease up on gold
.....The arguments against easing up on gold import curbs are misplaced. Fears that the gold import bill will surge back to $50-60 billion levels if restrictions are eased are exaggerated. India’s unprecedented gold demand in 2011-12 was triggered mainly by investors chasing high returns from gold, due to the global downturn, double-digit inflation and poor returns from other financial assets. The circumstances today are different, with the global economy turning, inflation cooling and financial assets making a comeback. Gold has halted its 12-year bull run and .................
JK Bank performing excellently: Rather
.....“The decision involving Reserve Bank of India supervision is nothing new and the same was taken some three years ago. The pros and cons of the decision were amply explained to one and all in opposition Peoples Democratic Party and other political parties. Why they remained silent in last three years is questionable and now doing propaganda seems a part of the larger political designs.”..........
Read.........
Saturday, May 31, 2014
K C Chakrabarty - The accidental banker
Sustainable prosperity - V.K.Sharma
Love in Tokyo: Rajan Says RBI, MoF One on Inflation
RBI Governor Raghuram Rajan sought to dispel any lingering doubts that he may be at odds with Finance Minister Arun Jaitley and the new Narendra Modi government for the second time in a week, saying the administration's priority of taming inflation is a prudent one. Rajan said the central bank will work with the government to curb inflation, which has wrecked the economy, giving a clue to the governor's thinking ahead of the June 3 monetary policy announcement. “The government and the central bank have both stressed the need to bring down inflation while respecting the fact that growth is very weak............
RBI's '007' Raghuram Rajan faces pro-growth boss in Modi
Hailed as a troubleshooting "James Bond" of central bankers amid India's currency crisis last year, Raghuram Rajan was given a licence to kill inflation with higher interest rates and drive a programme of monetary policy reforms. Now, the governor of the Reserve Bank of India (RBI) may need all the suave charm of the fictional British spy to sell that same hard-nosed agenda to a powerful new Prime Minister who is determined to revive economic growth and create jobs..........
Hope to work with Modi govt to battle inflation, RBI chief Raghuram Rajan says
TOKYO: Reserve Bank of India Governor Raghuram Rajan said on Friday he expected to join hands with the country's new government to bring down high inflation. Rajan, speaking at a seminar in Tokyo, said the new government's plan to curb food inflation seems sensible and that he expected the public's inflation expectations to fall in the future. ............
Make the PS Banks Performing assets of the economy - Dr.T.V.Gopalakrishnan
The PSU banks are becoming non professional and non aggrssive in their business approach is a fact which cannot be ignored both by the Government as owner of the banks and the RBI as Regulator. The reasons are not far to seek for such a situation in PSBs. The technology in use, the attitude of employees, thewrong age profile of human resources in banks and the incentives they get , the unprofessional guidance they get from top managemnt etc add to the non performance of banks, Added to this the Government interference in many ways acts as a moral hazard not to perform is also not a secret. Borrwoers take full advantage of this and they also do not perform. Time a very serious view is taken to make the banks performing assets of the economy.
The Robbing Hoods - T C A Srinivasa-Raghavan
.......What the "good" people don't seem to understand is that a tax on income has always been a device to attain political ends rather than a device to attain economic ones. If you study the history of income tax in detail, you will find that when it was not being imposed to finance wars, it was imposed in order to meet some political agenda................
Reposition the NABARD
My View on "Nabard FY14 Net marginally up at Rs 1,860 crore":
IDFC the infrastructure development organisation has become a commercial bank. Result is that funding support for infrastructure projects would need to be provided by commercial banks which will be costlier for the such projects. With the result, NABARD is the only agency with strong hand in funding infrastructure development projects, of course confined to rural areas. NABARD is also a fully owned GOI enterprise. So, it is in the best interest of the country's infrastructure development, NABARD may be repositioned as NABARD infrastructure development Bank with area of operations expanding to urban areas also. This would meet two objectives:
1. Infrastructure development would continue to receive the funding support without any problem.
2. NABARD with its performance going flat in 2013-14, it will give a great opportunity to grow in an area where its expertise lies.
- Dr.Santhanam
Pros and Cons of Keeping the Farm Loan Waiver Promise - B. Yerram Raju
...Interest subvention will not be available once the waiver is announced by the state government and therefore, to that extent the state government will have to bear this additional burden as well. It will be hazardous for the Centre to provide for loan waiver of AP as other states would not hesitate for raising similar demand. Farmers continue to be in distress not because of just the burden of institutional loans against which the waiver is now promised but on account of huge private debt at usurious rates of interest with no credible documentation. What is now promised is..........
Deepak Parekh honoured with Germany's prestigious Order of Merit award
........Germany's Consul General Michael Siebert who bestowed the award, said, "Deepak Parekh, one of the most respected personalities in the Indian finance sector for his outstanding entrepreneurial success and his integrity, has played a pioneering role in fostering Indo-German economic co-operation."......
Take it in right spirit
My View on "Too lax an approach to fighting inflation - Dr.S.S...":
Setting out the purport of policy as ‘alleviating the suffering of the masses and generating a climate of confidence which would boost savings and investments’(see conclusion) and systematically analysing the context in which Dr Raghuram Rajan will be presenting the second monetary policy review of 2014-15, the article doubles up as a background note for RBI and a guide for those who will be talking about expectations and fulfilment, post-announcement of monetary policy. One only hopes, the views, ‘In this context the autonomy of the Reserve bank of India’s monetary policy function and its accountability comes to the forefront’, ‘…The RBI should then have instrument independence’, ‘…presence of a top Finance Ministry official-the Big Brother’s watching syndrome!’ and ‘Hurrying through fundamental financial legislative changes is clearly not desirable’ coming from the veteran economist who had opportunity to be at the highest level in monetary policy formulation during challenging times, are taken in right spirit, by those in charge of fiscal and monetary policy formulation today.
- M.G.Warrier
Hostage to Questionable Priors
.....The committee which had one representative from a PSB (a retired official) and one from the Securities and Exchange Board of India was dominated by financial market participants and specialists. It is, therefore, no wonder that its report oozes with the sentiment of financial market fundamentalism. Surprisingly, there was no representative from the Ministry of Finance, banking trade unions and investor groups. Furthermore, it is intriguing that an RBI committee report can begin with the sentence, “The financial position of public sector banks is fragile, partly masked by regulatory forbearance.” Such a statement from a RBI-appointed committee is extremely irresponsible. Since most of the PSBs are also listed in the stock market, this statement is enough to cause ...............
Don’t mess with the banking sector
........The world over, economies have faced banking crises over the past several decades. Banks failed, they were nationalised or bailed out, then turned over to the private sector. This is the phenomenon of socialisation of losses and privatisation of profits that has come to attract public outrage. India’s experience has been refreshingly different. The Indian approach has been to have the public sector dominate banking while exposing it to competition. In the process, efficiency has improved without jeopardising stability. Experience has shown that it is possible to retain the public sector as the sheet anchor of the banking system without compromising on efficiency. Addressing the issues of governance at PSBs requires focus on the part of the finance ministry...........
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