.......“I did not know that the money we were depositing had fake notes. My family and I suffered a lot because of the case. I obtained anticipatory bail and spent about Rs 2 lakh in the legal battle that went on for about a year. The judgment was, however, in my favour,” Shinde told The Indian Express. “High quality FICN are being circulated. It is difficult for the common man to identify these notes,” said advocate Sushil Mancharkar. Banks have stopped complaining against genuine customers, and inform the police only about suspicious persons. They now either destroy fake notes or cancel and return them to customers.
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.
Thursday, July 12, 2012
Currency manipulators
........It is hence unfortunate that the December RBI circular prevents exporters/importers re-hedge the hedges, and banks have been asked not pass on the profits on cancelled contracts. Also, these companies have to take cash rate on such cancelled contracts. It is pity that SMEs are hit badly by such directives, whereas hedge funds, speculators, big corporates and banks are making huge, unjustified profits. It is time the RBI acts against the manipulators; else, the SMEs, which contribute more than 75 per cent of global trade, will have to close shop.
Little chance of rate cut on July 31: Parekh
...."Unless the Reserve Bank sees a trend that inflation is actually coming down, I don't see the Reserve Bank reducing interest rates,".........
Jayaram Bhat gets second term as MD and CEO of The Karnataka Bank Limited
.....MANGALORE: P Jayarama Bhat, managing director and chief executive officer of city-based The Karnataka Bank Limited, who will be completing his first term in office by July 13, will step into the second term of 3 years on Saturday. The Reserve Bank of India has conveyed its approval for re-appointment of Jayarama Bhat as the managing director and CEO of the bank for further period of three years as proposed by Bank's board of directors........
Rising interlinkage in financial system under RBI scanner
With insurance companies and mutual funds becoming the largest lenders to the banking system, the segments have become “vulnerable to the risk of contagion from the banking system”, according to the Reserve Bank of India...............
My View on "Misunderstood macro adjustment"
A well-balanced analysis of the present policy scenario. Here again RBI may not be able to make the right noices or bring about changes suggested here unless there is strong fiscal policy support. First, our economic advisors in Delhi must convince GOI the need to augment the forex reserves and generally strengthen the balance sheets of major national level institutions including RBI and al public sector organisations including PSBs. Cash-rich private organisations should be made to take supportive measures. The governemnt should resist the temptation to depend on public sector organisations including RBI and PSBs for 'window-dressing' budget. These institutions should be allowed to plough back profits for developmental initiatives and for augmenting reserves.
- M G Warrier
My View on "My View on "North shouldn’t block" - - M G Warrier
In their own selfish interest, those who are in charge of governance should reconcile to the fact that health of economy is dependent on a vibrant financial sector for which a central bank commanding respect from within the country and at international forums is a pre-requisite. For historic reasons RBI has been entrusted with several responsibilities which elsewhere are not part of central bank's role. RBI has been with GOI's support has been performing its role successfully. GOI should continue to ensure that RBI is not weakened. For the purpose it is essential to allow functional autonomy within the contours of the statute. While on the subject, the need for a strong balance sheet with adequate capital and reserves for RBI also has to be emphasised.
Wednesday, July 11, 2012
Getting India's economy moving again
....even as the Reserve Bank of India (RBI) nuances monetary policy to maintain the growth-inflation balance, manufacturing is likely to remain flat. The global contagion and the falling value of the rupee limit the RBI’s options to cut interest rates. As this newspaper has rightly pointed out, the solution to high inflation and low growth – stagflation – lies squarely with the government. RBI Governor D. Subbarao has, again rightly, identified the problem as supply-side – lack of reforms discouraging productive investment. Fiscal profligacy has fuelled inflation. Without fundamental economic reforms – cutting fuel subsidies, fast-forwarding infrastructure projects and reducing the fiscal deficit – no amount of monetary policy tinkering will tame inflation or spur GDP growth......
Cooperative bank gets RBI licence
“The Reserve Bank of India has granted a banking licence to the Gulbarga District Central Cooperative Bank,” president of the bank Annarao Patil told ..........
Banking: All about exams, cadres in CWE (IBPS)
IBPS or Institute of Banking Personnel Selection acquired independent status in 1984. The credit to the initiative goes to the Reserve Bank of India (RBI) and the Nationalized Banks. Dr Manmohan Singh, who was the Governor of RBI at the time, became the first Chairman of the Governing Board of IBPS.........
Fake note biz thrives as RBI, cops play blame game
JAIPUR: Thanks to the lack of coordination between the Reserve Bank of India (RBI) and special operation group (SOG) of Rajasthan police, the fake currency business is thriving in the state. Both the department are playing blame game but shying from taking the responsibility to check the menace. A state level security committee set up to curb the flow of counterfeit notes in the market is defunct. Neither the officials of RBI nor the SOG remembers when the last meeting was held. The committee was constituted to work jointly so that inputs and technical expertise can be shared and cases can be resolved promptly..........
Fake currency swamps Pune market
....As per details obtained by The Indian Express under the RTI Act from Pune city police, 166 complaints of fake currency (under section 489 of IPC) were registered between January 2008 and April 2012. Of these, 141 were by banks in the city. C V R Rajendran, executive director, Bank of Maharashtra said, “FICN of over Rs 12 lakh were found in our banks last year. The money cannot be recovered; the bank is at a loss.” In January, Narayan Peth branch of the HDFC Bank lodged a complaint at Vishrambaug police station against unknown persons for depositing FICN of around Rs 4 lakh before December 2011. There were 54 fake notes of Rs 1,000 denomination, 728 of Rs 500 denomination and 38 of Rs 50 denomination..........
Watch out for currency manipulators
.....According to Dr Basu, the intention of the paper is not to explain how currency manipulation is done. There are numerous ways to do that and there are players who are masters at the game. But regulators in most countries do not acknowledge the presence of manipulators nor do they understand the way the manipulator strategises. Deciphering these methods could help the regulators curb currency fluctuations without disturbing free functioning of market forces. The RBI also appears to be thinking along similar lines. It had recently imposed limits on overnight open positions and intra-day open positions held by dealers in inter-bank forex market. This is among the first acknowledgement by the central bank that speculation could be one of the reasons for currency volatility......
Ploughing a profitable strategy
The Reserve Bank of India (RBI)'s approval to Jain Irrigation for setting up a non-banking financial company (NBFC) could help the company address various issues relating to high working capital and debt...........
‘Failure to build consensus’
.....How do you assess the Reserve Bank of India’s (RBI) measures to ensure capital flows by easing rules pertaining to external commercial borrowings (ECBs) and allowing foreign institutional investors (FIIs) to invest in government securities?
These measures have to be carefully examined because while speaking on the Finance Bill in the Lok Sabha I had said that not only was the current account deficit going beyond sustainable limits but what was even more worrisome was the fact that 70 per cent of the CAD, as per data available with me, was being financed by short-term debt. Commenting on a similar situation way back in 1991, Dr I.G. Patel said that short-term debt is like sudden death because if they don’t roll over and insist on repayment, you have to repay. So short-term debt is even worse than FII money..........
Borrowing time
....the RBI measures are designed to boost the short-term foreign fund flow through the debt route, besides helping to stem the slide in the external value of the rupee, which has lost over 25 per cent in the past one year. The high current account deficit, which is the difference between all foreign inflows and outflows, has made imports expensive and pushed the value of the external rupee on a downhill path....
Financial sector players ask govt to perk growth
....This was the second meeting of Rangarajan in two days with key players or their representatives in the economy arena. On Monday, he had met officials from industry chambers, who among other things, pressed for easing of monetary policy by the Reserve Bank of India (RBI). However, Rangarajan had said RBI’s stance would depend on the behaviour of non-food manufacturing product inflation. On Monday, RBI expressed displeasure at banks not cutting interest rates despite the central bank lowering the repo rate, at which it lends money to other banks, by 50 basis points in April. The apex bank had also expressed concern at the slow pace of bank deposit growth. RBI, which opted not to change rates at the policy review last month, is scheduled to review the monetary policy on July 31.......
Seeking a magical repeat
......That still leaves the big task—getting the Indian economy back on a higher growth trajectory. Reserve Bank of India Governor D. Subbarao has already indicated that India can grow at only 7% without high inflation, around 1.5 percentage points than the trend rate before the global financial crisis....
Misunderstood macro adjustment
..... is a foregone conclusion that the RBI will need to increase its foreign reserves or India’s external liquidity ratios will worsen further. Such an outcome will raise more worries among sovereign credit rating agencies. However, the increase in foreign reserves will occur only when India begins posting overall BoP surpluses and the RBI intervenes to prevent rupee appreciation. India is not there as yet but the current adjustment to narrow the current account deficit via below-trend growth is a step in that direction........
My View on "North shouldn’t block"
Coordination and not confrontation is what is required between the Central govt and the Regulators particularly the Reserve Bank. All other regulators of the financial system should cooperate with the Reserve Bank and should be under the guidance and supervision of the Reserve Bank. Then only the so called Financial Stability can be achieved.
- Dr.T.V.Gopalakrishnan
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