.........Banks are yet to effectively pass on the rate cut of 50 basis points announced by RBI in April. Bankers were of the view that reduction in policy rates did not help much, as liquidity was tight and high cost of funds limited their scope for reducing lending rates. The central bank is scheduled to announce the first quarter monetary policy review on July 31. RBI had opted to hold rates in the mid-quarter policy review in June, citing upside risks to inflation.....
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Tuesday, July 17, 2012
More EM central banks join the easing crew
.........Worries about a growth collapse are clearly gathering pace. So how much room do central banks have to cut rates? Compared with Europe or the United States, certainly a lot. And with the exception of Indonesia and Philippines, interest rates in most countries are well above 2009 crisis lows. But Deutsche Bank analysts, who applied a variation of the Taylor rule (a monetary policy parameter stipulating how much nominal interest rates can be changed relative to inflation or output), conclude that in Asia, only Vietnam and Thailand have much room to cut rates. Malaysia and China have less scope to do so and the others not at all (Their model did not work well for India).........
Indian Banks On Security Alert!
.....However, the good news is that the Reserve Bank of India has proactively directed banks to beef up their information security and risk management posture, outlining a number of checks in several categories to protect users’ information and money from cyber threats. Upadhya believes that it depends on how decision makers in the banking ecosystem can leverage technology to its fullest and ensure a secure enterprise.
June inflation at 5-month low: India Inc clamours for rate cut, RBI unlikely to oblige
India's headline inflation fell to a five-month low in June, increasing the clamour for a cut in policy rates but the Reserve Bank of India governor D Subbarao quickly dashed hopes, saying it was still "way above the threshold"............
New clients are a matter of interest for lenders
..........However, bankers say that if the RBI reduces rates in the monetary policy scheduled on July 31, they will pass on the benefit to the customers. “Unless RBI reduces rates banks will not be able to bring lending rates down. We will wait for RBI action," said S Raman, CMD, Canara Bank.
PM’s job plan fails to take off in J&K
........The Expert Group – headed by former RBI Governor, C Rangarajan – had also suggested to run special training programmes for university and professional college students in collaboration with industry sector under the “Udaan Scheme”.........
SARFAESI Act and its impact
.....It would have been appropriate, say, for the RBI to have studied/ audited the financials and methods of operations of the ARCs and the reasons for the existing trust deficit between banks and ARCs before the ministry issued this direction. Besides, the definition of authorised officer given in the SARFAESI Act does not include ARC, though it can be an agent.........
Killing Me Softly With His Song...
.....That the central bank was well cognisant about the fact was evident in the 2002 speech made by former RBI governor Y V Reddy. “The availability and easy access to different forms of financial savings on an extensive scale, particularly for women, to protect the traditional stree dhan (jewellery given to brides) will prove to be the most viable policy option to encourage non-gold form of savings,” said Reddy. Today, much of the central bank’s action is aimed at just doing that. Besides forcing banks to increase their rural penetration, the central bank has looked to curb lending against gold by capping interest rates and jacking up the capital requirement for gold-lending non-banking finance companies. Besides, it is also toying with the idea of banning banks from selling gold coins. But the market seems to be turning a blind eye to the fact. The truth is, gold is no longer a ‘safe haven’. It’s just another alternative asset class that has turned speculative in nature......
Anand Sharma pitches for interest rate cut to boost growth, exports
With inflation easing marginally to 7.25 per cent in June, Commerce and Industry Minister Anand Sharma today pitched for cut in interest rate by RBI in its month-end policy review to boost both growth and exports. "The cost of the credit has to be low so that the Indian industry remains competitive in the global context,"............
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Stealing is as easy as A, T, M
......the police will write a letter to banks across the city, asking them to enforce RBI safety guidelines, which state that a unique PIN should be generated for every transaction. Although the RBI's guideline came quite some time ago, many banks are yet to implement them........
Monday, July 16, 2012
Well Spoken, Guv
In the Indian context where regulators are appointed by the government, it is not often that regulators speak their mind. Especially if it is to tell their political bosses off ! The Reserve Bank of India (RBI) Governor's show of spunk in telling the finance ministry not to micromanage banks must, therefore, be applauded. The RBI, unlike many other central banks, is not autonomous in law. Over a period of time, thanks to a succession of competent governors, it has won a certain degree of de-facto independence for itself. Nonetheless, governors, with some exceptions, have been wary of calling a spade a spade........
The 'Vivekananda formula'
.... There was a time when even the Reserve Bank of India (RBI) had an informal quota for an IAS officer nominee for the post of a deputy governor. That practice has been discontinued in the last couple of decades. And this perhaps could happen also because the central bank paid more attention to build a strong cadre of its own officials. As a result, today RBI has its own cadre of officers who have been nurtured to grow within the organisation, reducing its dependence on outside talent for filling key vacancies........
RBI website displays nothing
Browse the RBI website and look for the email IDs of its several departments. You will find none displayed. Try communicating online. The website's " contact us" slot does not accept most of the punctuation marks, in the text printed. And when the message is submitted, you are failed repeatedly, because of some " error occurred", and are asked to " try again," till you throw up your hands. Evidently, RBI's public service seems to lie in discouraging the public from contacting it. Why is it so? It is the culture of our government departments, organisations, and undertakings.
- V V Vijayan, Chembur (FPJ)
'Days of big bang reforms are over'
C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, has been a dependable aide of Manmohan Singh for several years. He was RBI Governor when Singh announced two rounds of rupee depreciation in July 1991. Now, with the PM taking charge of the finance ministry, Rangarajan is once again busy devising the revival of Asia's third largest economy. He sounds optimistic about growth prospects this year and says the government is taking steps to revive investor sentiment and growth...........
Loan rangers should be cautious
According to the RBI’s Master Circular, the consumer has to get all information regarding the loan in writing and in a local language. This information should include the terms and conditions governing the loan
..... I would suggest that you go through the “Master Circular on fair practices code” released by the Reserve Bank of India in the first week of July. It will help you understand and protect your rights better and also deal better with those giving you those loans. The Master Circular, which is a compilation of all the instructions issued by the regulator (RBI) to non-banking financial companies till date (June 30, 2012), tells you what your entitlements are vis-à-vis the loan agreement.......
आरबीआई के डिप्टी गवर्नर सहित 17 को राहत नहीं
जयपुर. हाईकोर्ट ने आरबीआई के डिप्टी गवर्नर एच.आर. खान, राजस्थान बैंक के चेयरमैन रहे पीके तायल व एमडी डॉ. के.एम. भट्टाचार्य सहित राजस्थान बैंक के निदेशकों को राहत से इनकार कर दिया। हाईकोर्ट ने इनके खिलाफ अधीनस्थ कोर्ट की कार्रवाई को चुनौती देने वाली याचिकाओं व रोक लगाने के प्रार्थना पत्रों को निरस्त कर दिया। अधीनस्थ अदालत को निर्देश दिया कि वह प्रार्थियों की आपत्तियां सुनने के बाद मामले में आगामी कार्रवाई करे। न्यायाधीश महेशचन्द्र शर्मा ने यह आदेश एच.आर. खान व राजस्थान बैंक की याचिकाओं पर दिया।...............
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TOO FEW WOMEN AT TOP OF PSU BANKS?
......India’s government-owned banks have something to cheer about. For the first time, the public sector banks, which account for about 70% of the banking assets in the country, will have three women chief executive officers (CEOs). In its 43-year history, the state-run banking industry has had only 43 women chiefs.........
Read - Mint
Read - Mint
Licence To Bank
......Some aspirants (RBI has not named them) have pleaded that “the requirement of the bank having 25 per cent of branches in unbanked rural centres is too onerous; therefore, the requirement could be revised to 15 per cent to ensure a level playing field between existing and new banks”. In June, Deputy Governor K.C. Chakrabarty had noted that banks should “be actively encouraged to set targets for themselves to capture untapped business in rural areas covering approximately two-thirds of the country’s population” in its 600,000 villages. Many suggestions come from big industrial houses — (and nowhere in the draft guidelines did the RBI even refer to them!) — and non-banking finance companies with interests in real estate. Even the idea of a wholly-owned non-operative holding company (NOHC) has been sought to be diluted. The objective of the NOHC was to fence regulated financial services from other activities of the promoter group — commercial, industrial and financial activities not regulated by financial sector regulators. The chorus is that the requirement that the NOHC be wholly owned by promoters be “revisited, and diversified shareholding at the NOHC-level be permitted”.......
Banks told to hold exclusive board meetings on policy, strategy issues every quarter
.....The reform measures come in the backdrop of the Reserve Bank of India recently asking the Government to show ‘exemplary behaviour of corporate governance and exercise its ownership rights through the board’......
Gold: A protection from inappropriate policies - S.S.Tarapore
........ On interest rate increases and tightening of liquidity, India Inc. has been forcefully lobbying for easing of monetary policy and it would be creditable if the RBI can resist these pressures. While earnest attempts are being made to undertake a fiscal correction, political economy considerations appear to thwart effective action.........
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