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, January 3, 2013
Y.V. Reddy to head 14th Finance Commission
Reddy's self-discipline would come in handy while tackling challenges
During his stint as Governor of the Reserve Bank of India (RBI), it was alleged he was too conservative. However, through tough lending standards, to a large extent, Yaga Venugopal Reddy had insulated the Indian banking system from the effects of the sub-prime crisis that led to the global financial meltdown in 2008. Now, as he sets about steering the 14th Finance Commission, he would have to suggest ways to the Centre and the states to augment their resources at a time when the Union government is seeing tough times on the financial front. Reddy is an early riser. Speaking to Business Standard two years earlier, he had said this had resulted from a rural upbringing. “When you live in a village, you wake up with the sun and go to bed once it sets,” he had said. It is this discipline that would keep the former bureaucrat (1964 batch of the Indian Administrative Service) in good stead in striking a balance between the conflicting needs of the Centre and the states............
2012 was the most challenging year, says Subbarao
Chidu shows RBI who’s boss: but is this what he should do?
The decision of the government to decline an extension to Subir Gokarn as Deputy Governor of the Reserve Bank of India (RBI) does not speak well about our politicians’ tolerance of regulatory autonomy. The finance minister has been trying to pressure the RBI into cutting rates, but Governor D Subbarao has resisted these attempts so far. Gokarn, as his deputy in charge of monetary policy, has been a key player in this. That he is not being given an extension – normally, there is no reason to deny anyone a full five-year term, unless the incumbent has done things to deserve a truncation after three years – means that P Chidambaram wants to send a message on who’s boss to the RBI.........
Urjit Patel: Well cast for new role
...........In fact, this will be his second stint with the RBI. From 1995 to 1997, he served as an advisor, on issues ranging from development of the debt market to pension, banking reforms and exchange rates.........
Urjit Patel appointed as RBI deputy governor - banking secy
Read.........
Urjit Patel succeeds Subir Gokarn at RBI
The stress is showing
.........India’s exports have been declining month after month, as the prospects of a revival in the principal markets of the developed world have not improved. Imports of two commodities, gold and petroleum, have remained sticky and account for a substantial portion of the imbalance. Various measures adopted by the government and the RBI to curb the demand for gold have had limited success. Past experience suggests that measures such as physical controls will be counterproductive and encourage illegal trade. One promising route, though relevant only for the long term, is to popularise gold-based financial products to wean away consumers from their old preference for gold..........
Gearing up for banking reforms
.........When called upon to issue fresh private sector bank licences, it is right and proper for RBI to have sufficient powers to inspect the accounts and business of any associate enterprise of the applicant bank. Associate enterprises that have significant influence in the making of financial or policy decisions also come within the ambit of proposed amendments. The Act equips the regulator with substantially enhanced powers. Nonetheless, until such time as the Bill completes its formal process of enactment, aspirant companies seeking to enter the banking industry concurrently need to be well prepared.
Banking Reform Needs Focus
......A focus
on inclusion would be most timely. It would coincide with the
introduction of direct cash transfers. The scheme is billed as a
game-changer for routing government payments and subsidies. It could
prove a game-changer for banks as well. Millions of accounts will have
to be opened
that carry the promise of huge float funds. Because it meshes economic
priorities with the long-term commercial interests of banks, financial
inclusion should now be the focus of banking reform. If this is
accepted, we have a basis for dealing with licences for NPBs. Among
non-banking finance companies, those that have a network of branches in
the interior should have priority. As for industrial houses, the issue
of licences must be clearly linked to the objective of financial
inclusion.........
RBI may meet NBFCs this month for finalisation of norms
....."The central bank is likely to hold a couple of meetings in January before finalising the guidelines with regard to NBFCs," an industry source said. The apex bank had released the final draft guidelines on NBFCs, based on the recommendations of Usha Thorat committee report, last month...........
Why 2013 will be a crucial year for chief economic advisor Raghuram Rajan
.........For Rajan, known for his famous contrarian view in 2005 on a financial disaster in the making, way before the global meltdown, 2013 is when he will be watched to see how he manages to shape fiscal and financial policies — this time as an insider in the government. ............
Grameena Vikas Bank opens 105 ultra small branches
As part of the financial inclusion drive, Andhra Pradesh Grameena Vikas Bank (APGVB), a regional rural bank sponsored by State Bank of India, has opened 105 ultra small branches in the state on January 2 . These branches are being operated by business correspondent agents (BCAs) by leveraging biometric technology with the help of hand-held mobile devices to offer banking services in small villages having population of 2.000 and above, the bank said in a press release..........
RBI eases KYC norms for money changing activities
The Reserve Bank today eased the 'Know Your Customer' (KYC) norms for money changing activities. "If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her, the document may be accepted as a valid proof of both identity and address," RBI said.........
Stricter norms suggested for gold loan firms
........RBI had set up a working group under the chairmanship of K U B Rao, a senior executive, to study issues related to gold and gold loans by non-banking finance companies (NBFCs). Their draft report has been published on the central bank’s website for suggestions. The group has suggested gold loan companies should consider only the price of the yellow metal and not the jewellery making charges and other taxes in determining the value of the gold...........
NBFCs, banks may continue to deliver gold loans: RBI panel
......."The financial performance of the gold loans NBFC's and the current level of their borrowings from the banking system are not of significant concern. There appears to be no immediate systemic implications in terms of domestic financial stability due to the interconnectedness of gold loans NBFCs and banking system," said the working committee, which was constituted under the chairmanship of K U B Rao, Advisor, Department of Economic and Policy Research, RBI; to study the gold loan business in India............
RBI working group revives gold bank idea
Does India need a gold bank? The debate has been stirred alive by a working group of the Reserve Bank of India (RBI) after more than two decades. The government had proposed the idea of setting up a gold bank back in 1992. The idea was in cold storage for long until the worrisome contribution of gold imports to the current account deficit last year prompted the central bank to constitute a working group to look into the rising demand for the yellow metal...........
Design innovative financial instruments to curb appetite for gold: RBI tells banks
........"Demand for gold will come down commensurately with the availability of alternative instruments for investment with real rates of return. The fact that major portion of individuals' savings are channeling into physical assets, such as, gold and real estate indicates that there is vast scope for the banking system to take advantage of these opportunities." The Reserve Bank's suggestions came on the day when Finance Minister P Chidambaram said the government is considering steps to make gold imports more expensive........
She swallowed coin as child, retrieved it 24 yrs later
......."Usually we have children coming in with coins stuck in food pipes. But such a case, where it has been stuck for so many years, is a first," said Dr Aparna Deshpande, professor of surgery, KEM Hospital. It took a multi-disciplinary approach and a team of 20 doctors from surgery, gastroenterology, ENT and anasthesia to unstuck Ahire........
Wednesday, January 2, 2013
Economist Urjit Patel to be new RBI Deputy Governor
Economist and public finance expert Urjit R Patel is set to be named as the Reserve Bank of India’s deputy governor in charge of monetary policy, replacing Subir Gokarn who left office on December 31 after a three-year term and a one-month extension. Sources said finance minister P Chidambaram has approved Patel’s name for the crucial post as recommended by a panel comprising governor D Subbarao and department of financial services secretary DK Mittal. A formal announcement is expected shortly. Patel — now a consultant with Boston Consulting Group — is credited with over a decade’s experience in the Indian financial sector with a focus on funding private infrastructure projects. For Patel, a PhD in economics from Yale University and an MPhil in economics from Oxford University, the assignment is a homecoming of sorts, as he had an earlier stint with the central bank as advisor. He also worked with the finance ministry for a while, making him the ideal choice for deputy governor who has to do a fine balancing act in monetary policy formulation. Patel’s task in assisting the governor in monetary policy-making is, however, not going to be easy, with the government and the RBI not exactly on the same page on whether the time has come to cut interest rates........
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