.....“Right now, the conditions should enable RBI to cut repo rate. We expect a cut of 25 basis points (or 0.25 per cent) in its policy in May and may be by another 25 bps in the next review,” .....
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.
Monday, April 22, 2013
Chidambaram hopes for rate cut to propel growth
..."Government would welcome lower interest rates," Palaniappan Chidambaram, 67, said in an interview in Washington on Saturday, where he is attending meetings of the International Monetary Fund and the World Bank. "But how low can interest rates go is a function of a number of other factors, especially inflation, and that's a call the governor has to take."........
Shun the Cypriot connection
When looking at the major economic crisis in the Republic of Cyprus involving the exposure of Cypriot banks to the Greek debt crisis, one is reminded of the Ahmedabad-based Madhavpura Mercantile Co-operative Bank (MMCB), which was closed down by the Reserve Bank of India in June 2012 when the outstanding loans were Rs 1,100 crore, of which Rs 800 crore pertained to a shares scam............
A reprieve for the Indian economy
......Nevertheless, lower oil and commodity prices will lower inflation; and if it’s correct that people have been buying gold as a hedge against inflation, then lower inflation should also lead to lower investment demand for gold. That, in turn, could lead to an increase in financial savings, a process that should also be helped by the Reserve Bank of India’s (RBI’s) issue of inflation-indexed bonds. Does this mean the economy is out of the woods? Not really............
Risk-reward looks good now
.......We believe there is a modest monetary easing cycle ahead, given limited room for the Reserve Bank of India. Despite the weakness in macro data points near-term, over the mid-to-long term, equities should get support from secular earnings growth; our bottom-up forecasts suggest mid-teens growth for the Nifty in FY14/15. We think current assumptions are conservative (excluding consumption) and are not building in any meaningful economic recovery, and hence these might not be difficult to attain...........
‘Rural demand driving growth in light commercial vehicles segment’
......Besides discussing the challenges facing his non-banking finance company (NBFC), Revankar observed that the cause of financial inclusion will be well served if the banking regulator allows more banks, NBFCs and credit societies to come up. Further, the regulator would do well to relax the curbs imposed on NBFCs. Excerpts from the interview............
Money-laundering probe: IRDA report likely in a week
Hyderabad, April 21: The Insurance Regulatory and Development Authority (IRDA) is likely to complete investigation into the alleged money-laundering transactions of insurers within a week. “Our inspections teams have been deputed to some insurance companies and the process is on. We may have a report ready within a week on the issue,” T. S. Vijayan, Chairman, IRDA, told newspersons on the sidelines of a seminar held here.............
Read - HBL
Kerala Financial Corp brings NPA down drastically
.......This is a story of a silent but amazing transformation at the State Financial Corporation, says K. Manmathan Nair, veteran development banker. Nair has had stints at senior levels with Small Industries Development Bank of India (Sidbi) and the RBI, apart from at KFC as its managing director. The 90s saw KFC in bad shape, struggling to fulfill its mandate, even as it failed to keep pace with the changes in the post-liberalisation regime,...........
Fixed Income is the flavour of the day
........The central bank is widely expected to cut rates by a minimum of 25 bps in its 3 May 2013 annual policy and is also likely to cut rates throughout this fiscal as the economy struggles to stay afloat. RBI rate cuts is highly positive for bond yields, which are likely to trend down throughout this fiscal. In a falling bond yield environment the best investments are in bonds and as a result of expected fall in interest rates, more and more investors are flocking to fixed income securities directly and indirectly............
NBFCs, more than banks, are at risk of default on gold loans
............Having said that, RBI must take care to keep the banking system safe and sound. The trouble with Indian banking system is that a crisis may unfold even when there is no reason for one, due to lack of transparency in the reporting structure, followed by various banks. Rumor mills are rife about how badly the bottomline of one bank or the other has been hit by falling gold prices. RBI must ask both public and private sector banks to declare their exposure and track record on gold loans, while announcing their quarterly results.
Saradha CMD siphoned off crores from 37 accounts
....The Sudipto (not Sudipta) Sen named in the gazette is son of Late Bhudu Sen of the Sanchayani Savings and Investments (India) Pvt Ltd. Police are examining records to find out whether the Saradha Group CMD Sudipta Sen is the same Sudipto Sen of the investment company registered as a residuary non-banking company under the Reserve Bank of India. According to the 39th report of the Petitions Committee submitted in Lok Sabha in January 2004, the company had collected Rs 800 crore from 50,000 small depositors.............
Sebi, RBI and ED to join forces against investment frauds
Amid a countrywide proliferation of fraud investment schemes, markets watchdog Sebi is joining forces with other agencies, including RBI, SFIO, Enforcement Directorate and state police departments, to tackle the menace. A large number of fraudulent schemes have come to the fore in recent months, wherein gullible investors are promised huge returns of up to 100 per cent in a year or two through 'bizarre and innovative' methods, a senior official said............
Trinamool has nothing to do with deposit-raising companies: Mukul Roy
........ If the State government taken timely action against such companies, many people could have been saved from ruination, he said. Asked about chit funds, CPI parliamentarian Gurudas Dasgupta said the Reserve Bank of India’s Governor had told him that such companies are under the purview of the State government.
Agents bear brunt of Saradha collapse
..........Banerjee cut his teeth in door-to-door deposit collection in the early 1980s as an agent of Peerless General Finance and Investment Co. Ltd—a residuary non-banking company, which pioneered in collecting small savings. Though it didn’t ever default on repayments, Reserve Bank of India (RBI) forced Peerless to stop taking deposits in 2005-2006. This spawned the growth of unregulated deposit-taking companies in West Bengal and other eastern Indian states. Exploiting the strength of Peerless’s impeccable repayment track record, its redundant field agents helped found new firms that went after people’s savings, mostly in rural areas...........
Blame game on chit onus
.......Addressing the press on Sunday, Dasgupta argued that the government could also have appealed to the high court to seize and auction the properties of chit fund companies that had taken investors for a ride, or written to the RBI and SEBI to act against them..............
Joint attack on fraud plans
....Sebi on its own lacks full-fledged powers to act against all kinds of “money-pooling” frauds, although a proposal to strengthen its arsenal is awaiting the government’s clearance. In the meantime, the regulator has decided to take a collaborative approach to bring to book perpetrators of these investment frauds, by seeking help from other regulatory and enforcement agencies. Sebi is tying up with other regulators and agencies depending on the needs and nature of the case, the official said, while adding that these entities include banking regulator RBI, SFIO, insurance watchdog IRDA, the Enforcement Directorate and the Economic Offence Wings and other police departments in various states.............
Court takes on ‘deposit’ firms
......The letter stated that according to the KMSS’s estimate, in the past few years, these companies had “illegally” collected around Rs 5,000 crore from investors in Assam. None of these, however, had the mandatory permission from any competent authority, be it Reserve Bank of India, Securities and Exchange Board of India (Sebi) or Insurance and Regulatory Development Authority (IRDA), to accept public deposits, it had alleged. The development assumes significance as it comes at a time when Saradha Group is facing the ire of depositors in Bengal and Bengal police are on the lookout for Sen, who has gone missing...........
1 registered chit fund, reveals RTI query
...........In response to some of the other questions, the officer in charge of EOI cell mentioned that chit funds in the state were controlled under Chit Fund Act 1982 and Registrar of Chit who is also the agriculture income tax commissioner was the controlling officer for all types of conventional chit. With regards to the action taken against any chit fund companies or owners, the reply stated that no information was available with the cell. with the cell in this regard it mentioned that EOI is the only cell concerned to take action. The Registrar of Companies and the Reserve bank of India by their respective acts can also take action, the letter further stated.............
Saturday, April 20, 2013
In a Sign of Times, Your Signature is Losing its Stamp
..........The
courier boy doesn’t bother verifying it, nor does the retailer while
accepting the debit/credit card receipt. Even the banks seem less
enthusiastic — the net cast wider for customers in rural areas can
manage with thumb impressions, and the middle class is happy with
netbanking. The truth is, in a world increasingly turning around
passwords and Personal Identification Numbers (PIN), manual signatures
are finding fewer takers..........
.......Indian currency notes also carry what seems to be a contradiction: two signatures from one person, since the signature of the RBI Governor appears in both Roman and Devnagari. This is as per the Official Languages Act, which mandates that since our notes are bilingual, the signatures are too, but it leaves open the question of what the protocol will be if a governor has a signature in neither script. Would the other script be Roman or Devnagari? Or would the governor have to sign in these scripts, but not use his regular one?...............
Read - ET
Should RBI Lend its Gold?
.......Already, half of the RBI’s gold is lying in the vaults of Bank of England and the Bank for International Settlements. Bank of England also supplies some of the players from whom Indian banks buy. So, it would mostly be a matter of shifting gold from one shelf to another within the same vault. If the RBI wants to sell off its gold (god forbid!), it can give banks time to call in their loans. The impact on the nation’s current account deficit of replacing foreign suppliers with the RBI could be electric........
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