..........Mr. Sampath said that based on NABARD projections, the Lead Bank in the district would prepare the Annual Credit Plan. He underscored the point that the ACP would encourage farmers to take to horticulture crops in a significant manner in the district. He called upon all bankers to extend their cooperation in realising the goals to be set in the Annual Credit Plan. NABARD Deputy General Manager A. Balachandran, DGM of Indian Bank S. Natarajan, and District Development Officer (Reserve Bank of India) J. Kandasamy were present.
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.
Tuesday, February 5, 2013
Doubling of food production crucial before 2020: RBI
.....RBI Governor while unveiling the quarterly monetary policy expressed concern over the contrarian behaviour of food inflation which moved into double digits in December 2012, ‘reflecting both cyclical and structural factors’. During the period even though headline inflation rate fell to 7.2%, food inflation remained high, revealing.......
Read........
FM to sweeten home loans with tax break
Finance minister P Chidambaram may have good news for home loan
borrowers in the union budget for the financial year 2013-14 to be
presented later this month. The government is considering hiking the tax
deduction limit on home loan interest from the present Rs. 1.5 lakh to
more than Rs. 2 lakh per annum........
Chidambaram offers help for Repco Bank
.....Inaugurating its new branches and training centres here on Saturday, the Minister said that it was a matter of regret that when all other banks came under his control, the Repco Bank was governed by the Ministry of Home Affairs. It should develop in a phased manner and become full-fledged like the Pandian Grama Bank, Indian Bank and Indian Overseas Bank, he said and offered to take up the issue with the Reserve Bank of India (RBI).........
Monday, February 4, 2013
RBI ED unravels ' inflation puzzle'
In yet
another milestone, Deepak Mohanty, Executive Director, Reserve Bank of India,
has been presented the Late Dr. Ramchandra Parnerkar Outstanding Economist
Award for 2012. The Poornawad Charitable Trust and its Life Management
Institute conferred the award upon him at a function in Mumbai. Speaking
at the function on the ' Indian Inflation Puzzle', Mr Mohanty tried to unravel
the mystery of high inflation experienced by India recently. He pointed out
that India was a moderate inflation country, considering that many countries,
both developed and developing, have experienced very high inflation in their
modern development history.........
Read - FPJ
Strong link between financial inclusion & stability
.......The Reserve Bank has constituted a high level Financial Inclusion Advisory Committee to strengthen the financial inclusion agenda. RBI has shown remarkable insight into issues of under- financialisation and over- financialisatioin: it can surely evolve a viable and sustainable banking services delivery model, which would ensure that financial inclusion and financial stability move in tandem.
'Free Tibet' slogan on Rs 500 note raises hackles
.............The currency note was spotted by a local merchant in McLeodganj market, who reported the matter to police on Thursday. "We are taking up the matter with the Tibetan government. Using Indian currency against any particular country in any freedom struggle is a serious offence. We are investigating the matter," ......
Bank employees to join central trade unions strike
Bank employees' unions have decided to support the two-day strike by central trade unions beginning February 20 to press for wage hike in the backdrop of rising inflation. Nine bank unions under the banner of United Forum of Bank Unions (UFBU) have decided to go on a nation-wide strike on February 20 and 21, National Organisation of Bank Workers' (NOBW) said in a statement...........
Bank employees’ national meet
.......On February 10, K C Chakrabarty, Deputy Governor, RBI, would speak at the national seminar. A special session for women would also be held. The theme of the conference is ‘Meeting the Challenges of the Decade’ and the conference demand is to ‘Make Banking a Fundamental Right’.
The golden truth
..........No wonder, Finance Minister P Chidambaram’s and RBI Governor Duvvuri Subbarao’s job is already cut out. On the one hand, high imports of gold are one of the main culprits of the current account spiralling to a deficit at 5.4 per cent of the gross domestic product in the July-September quarter. On the other, people are rushing to buy gold because other financial instruments are not giving substantial returns. Both have already tried quite a few tricks. The finance ministry has increased gold import duty to six per cent – five times more from just the one percentage point importers paid last January. RBI has asked banks to reduce lending to gold loan companies. But imports, at 604 tonnes till September in the year, have continued...........
Don’t raise 80C limits
.........But at high tax brackets, the lower-return fund may be the optimal investment. Why not just remove 80C benefits altogether and compensate taxpayers by raising the base level at which tax rates kick in?
My View on "RBI asks banks to beef up wage hike, pension provisioning"
Has the RBI made provision for PENSION UPDATION? If not, then do it now as per the proposals submitted by RBI to Govt of India. Before advising others, we must first meticulously follow our own sermons. The commercial banks are scared to make any provision for wage revision as it would become the starting point of negotiation for unions and they would clamour for more. The BANK MANAGEMENTS can not decide unilaterally the quantum of wage hike as that would negate the bilateral nature of talks between the Banks and Unions.
- Sitendra Kumar (via e-mail)
My View on "Economy would be stronger when more people have jobs: KC Chakrabarty"
What a beautiful theory? Who stops creating employment opportunities? Those occupying positions can talk and send messages. The job is well done, but who is to implement and follow it up? Financial inclusion is there for the past ten years or so and what is the position now? What is the remedial action from the authorities? Banks are elusive in entertaining people of small means is a ground reality and even people with all documents as per the KYC norms prescribed are driven away by bankers to open the accounts. Let those occupying positions approach banks and attempt themselves without revealing their identity, then they will know the practical difficulties ordinary mortals encounter on a day to day basis. Financial inclusion is an excellent business opportunity to create business for banks and employment for many but this does not happen for reasons best known to authorities.
- Dr.T.V.Gopalakirshnan
My View on "FinMin: Cut FD rates for senior citizens"
Those who are in the know of things will, in the coming days make studied observations on this subject. But, the motive of the finance ministry being betrayed in the way in which the instructions have been issued only to Public Sector Bank, calls for an immediate response. Propriety demands that such instructions with industry and social implications should have been issued through Reserve Bank of India after due deliberations. This does not appear to be the case here.
Those who are in the North Block now must be young and unaware of how interest rates evolved to the present stage. At the time of retirement in the early 1990's the retirement benefits deposited in banks or Post Office gave a return of around 12% p.a. Now the return has come down by 20 to 30% and inflation had its impact on cost of living. The 50 to 100 basis point additional interest on deposits of senior citizens, allowed to be paid by banks by Reserve Bank of India, has this background. A Senior Citizens Savings Scheme with higher than market-related interest rate and tax benefits also was introduced more than a decade back. The pressures on senior citizen’s personal budget have only increased on account of negative returns on his savings and escalation in costs owing to inflation.
Finance Ministry's present advice will have no impact on PSB profitability as the deposits already contracted may not get affected and senior citizens will move their deposits to other institutions/avenues giving better return, which could be unsafe making his plight worse in the coming days.
- M G Warrier, Thiruvananthapuram
Economic strategies are dynamic & need reviewing: YV Reddy
In this edition of Indianomics, former Reserve Bank of India (RBI) Governor, Dr YV Reddy gives his insights on India's reform agenda and his new book, 'Economic Policies and India's Reform Agenda: New Thinking'. In his book, Reddy has dedicated a chapter to India's reform agenda. Reddy gives the details on new strategies for economic development. He opines in the light of the global crisis, that the functioning of the global economy will be influenced, in terms of growth or inflation or trade or protectionism. Hence, he says economic strategies need constant reviewing.............
Read.........
RBI will cut slowly
..........As the cuts pass through into floating mortgage rates, it will make a difference to the housing market. By extension, it may cause a revival in construction, real estate, construction materials, etc. Other rate sensitives such as the auto- industry and other working capital intensive businesses will eventually benefit. This scenario of a virtuous cycle depends on two main assumptions. One is that the RBI will continue cutting. The second is that reflexivity will push the market up. I think the RBI will be cautious. But it will cut every so often............
‘Globally, biggest insider game is between Govt, financial markets’
......After discussing Global financial crisis and the uneven recovery in two earlier books, Y.V. Reddy, former Governor of the Reserve Bank of India, has now come up with the third. The latest book ‘Economic Policies and India’s reform agenda — New Thinking’ outlines the need to rethink the reform agenda of India in view of the new thinking on global economic policies......
Why CAD is bad: Subbarao spots a new thing to fret about
.........For a while, the finance minister and the RBI passed the buck to one another. Finally, the government has done something on the policy front and it also seems serious about controlling the fiscal deficit. It is, therefore, not surprising that the recent cut in interest rates and cash reserve ratio (CRR) looked almost inevitable. But this has brought in limited euphoria as it is prima facie hard to believe that this move will be a game-changer, with the RBI putting in a lots of caveats. The emphasis has suddenly turned to the current account deficit (CAD) which now seems to be a major consideration for future monetary policy action. Why should this be so?.......
Keeping CAD under check
 |
| “A CAD which can be easily financed in one period can become difficult to manage in another. The exodus of capital can be very sudden and large when the international community loses confidence in India,” |
The true significance of the monetary policy review
.....Finally, it ought to be clear that the repo rate cut does not automatically lower the interest rates on loans. That will depend upon the decisions of individual banks. It is hoped that the banks would also heed the concerns of depositors, especially the pensioners and others solely dependent on interest income from bank deposits.......
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