..............Lacklustre economic growth is at least bringing the benefit of a decisive retreat in cyclical inflationary pressure, evidence of which has continued to accrue since RBI’s last policy review. Headline wholesale-price inflation slowed to below 6% in March while RBI’s preferred gauge of underlying inflation pressure—non-food manufactured goods prices—decelerated to 3.4%, its lowest reading since February 2010. With little prospect of a decisive re-acceleration in economic growth for at least several quarters, “core” inflation should continue to subside through the rest of the year as the economy continues to operate below potential. RBI’s “core” gauge could realistically retreat to below 2% by the year-end..........
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.
Wednesday, May 1, 2013
Depositors’ body moots ‘inflation-proof deposits’
.........The AIBDA has represented that the interest rate for small depositors and senior citizens should be at a mark-up of 3 percentage points over the annual average consumer price index (CPI) based inflation, said. The Association defines small depositors as those with deposits up to Rs 5 lakh, and senior citizen depositors, who generally prefer to park their terminal benefits in bank deposits, as those with deposits up to Rs 15 lakh. This is the first time the central bank has invited a depositors body for the pre-policy consultation exercise. The RBI will unveil its annual policy on May 3...........
Legislation to safeguard non-bank depositors
.............However, a coordination committee meeting, attended by development commissioner, crime branch ADG, finance department, RBI and SEBI officials to discuss measures to curb the menace of chit fund companies, did not discuss much on the state's action plan in connection with Saradha Group's alleged embezzlement of public deposits in Balasore and Puri districts. "The crime branch would speak to the West Bengal police and see what best can be done," an official said...............
Chit fund scam: CBI team to meet Assam Police in Guwahati
....................The Department of Financial Services (DFS), Ministry of Finance, had also written to all the Chief Secretaries of State Governments in July 2012, requesting the state governments to strengthen the coordination mechanism between their regulatory institutions like the Economic Offences Wing of the State Police and the central agencies such as RBI, SEBI, Registrar of companies, Revenue Department and Enforcement Directorate. The RBI has also been addressed in this regard in Feb 2013 and the matter is currently under examination by them............
Saturday, April 27, 2013
VITALINFO requests for leave please............
Due to personal and family commitments, I shall be away travelling. The editions of VITALINFO may not be available on following dates:-
- 29 - 30 April 2013
- 7 - 9 May 2013
- 18 - 24 May 2013
May I request you to please bear with me? Inconvenience caused to you is sincerely regretted.
Vitally yours,
Mangesh
The Indian unexceptionalism
..........Why did expectations come unhinged? Because RBI, too, till mid-2011, nearly 15 months after the inflation spike in early 2010, believed that supply constraints were the drivers of inflation and insisted on tightening policy at a glacial pace, showing none of the urgency that the 22 months of double-digit inflation over 2010-11 demanded. Add to that the government’s fiscal profligacy—it refused to withdraw the massive stimulus provided in 2008-09 despite growth flying at 8.6% and 9.3% in FY10 and FY11. With that kind of excess demand persisting for more than two years, households and firms rationally changed their beliefs, doubling their expectations about where inflation could and did reach..........
Data on bank credit
The Weekly Statistical Supplement to the Reserve Bank of India Bulletin (WSS) used to carry a very useful table on “Accommodation Provided by Scheduled Commercial Banks to Commercial Sector in the form of Bank Credit and Investments in Shares/Debentures/Bonds/Commercial Paper, etc”.
It also included memo items on investments in instruments issued by mutual funds and public financial institutions and bonds/ debentures issued by others.
The RBI has stopped publishing this table as also a few others in its WSS. However, the disaggregated data on bank accommodation are available in the table on “All Scheduled Commercial Banks — Business in India” in the database on the Indian economy on the Web site. Many readers may not be aware of this since there was no announcement about the changes in the WSS.
Secondly, interested researchers have now to add up the different components to arrive at the total flow of bank funds to the economy unlike in the past when it was readily available at one place. They will be thankful to the RBI if it helps in saving their time and effort by restoring the old table.
- A. Seshan, Mumbai (HBL)
RBI should hit pause button
........What should the Reserve Bank do in the face of moderation in WPI at one end and a sticky CPI on the other? One way out could be to use GDP deflator-based inflation, which captures price pressure in the most comprehensive manner. However, the next GDP-deflator based inflation number will be available only on May 31, when CSO would be announcing the fourth quarter GDP numbers..............
There is case for RBI to cut interest rate: Rajan
Ahead of the annual monetary policy review of the RBI, Chief Economic Advisor Raghuram Rajan on Friday said there is a scope for interest rate cut as the core inflation has come down and there is a need to push growth...............
RBI approves merger of Mehsana Urban co-op bank and Surat Nagrik Sahkari bank
..........Samir Patchigar, managing director of Surat Nagrik Sahkari Bank said, "We are grateful to the RBI for taking prompt decision on our bank's merger with the Mehsana Urban Cooperative Bank. This will end the 40 long years of Surat Nagrik bank's performance in the city. Now, the depositors and account holders will be catered by the Mehsana Urban bank"............
Gang targets ATMs, siphons off Rs 1.56 cr
KOLKATA: The CID has unearthed a fraud of Rs 1.56 crore because some ATMs of a nationalized bank could not enforce the RBI's directive of discontinuing with the "cash-retraction" facility, thanks to a technical glitch.............
Maharashtra sees highest number Of card, internet banking frauds
..........."Internet frauds reported in the country are relating to phishing, usage of stolen credit cards/debit cards, unauthorised fraudulent Real Time Gross Settlement (RTGS) transactions, fictitious offers of fund transfer, remittance towards participation in lottery, money circulation schemes and other fictitious offers of cheap funds,".............
As bond yields soften, banks see arbitrage opportunity
Banks are taking an arbitrage advantage by borrowing from the Reserve Bank of India’s (RBI) daily Liquidity Adjustment Facility (LAF) and using the money to buy government securities, as yields on the latter have softened in the hope of a steep rate cut by the central bank during the annual monetary policy review on May 3.................
3k non-eligible farmers gained from Centre's waiver scheme
PUNE: The reaudited report of the National Bank for Rural and Agricultural Development (Nabard) on the Rs 52,000-crore agricultural debt waiver and debt relief scheme (2008), shows that loan amounts of about 3,000 farmers from Kolhapur, who owed Rs 2 lakh each, were waived when the ceiling was set at Rs 1 lakh per farmer.........
Banks to continue focusing on retail credit in FY14
Banks are once again relying on retail credit in the current financial year to drive credit growth. This is because credit demand from the corporate sector may continue to remain weak. In the previous financial year, banks had focused a lot on retail credit as corporate credit demand had slowed down amid economic growth at its slowest pace in a decade...........
Banks' put contracts cheapest in 6 months before RBI meet
........The Reserve Bank of India may pare its benchmark rate by 25 basis points at a May 3 policy review, according to 14 of 16 economists in a Bloomberg survey. The bank index has jumped 14 per cent in April, poised for the biggest monthly advance since September, amid speculation a cut in borrowing costs would help lenders boost lending and profitability. "Investors are bullish on banks even after the runaway rally," ...........
ICSI to organise national seminar on ' Indian Financial Code'
..........The seminar will cover various sub themes like Regulatory Regime. Others speakers at the conference include Dr. Kanagasabapathy, Director, EPW Research Foundation,...........
Read - FPJ
Banks stepping up efforts to get ‘Know Your Customer’ details
........Now, if you have not stepped into a bank branch in a long time due to the convenience of Net banking, then not submitting the KYC documents (latest photograph, original and self-attested copies of identity and address proofs) could land you in hot water...............
Did HSBC Bank resort to toxic churning and illegitimate transactions to earn commissions?
.....The modus operandi for HSBC in both the cases has been a continuous churning by the “portfolio management service” by taking a power of attorney (POA) and used pre-signed blank letter of intents (LOIs) to execute the transactions on behalf of the clients. The London-based NRI mentions that he was asked to sign blank LOIs. On asking the bank to provide copies of the LOIs, he found that certain forms were not signed by him due to a mis-match in signature. He has even provided forensic evidence to prove that he has not signed on certain documents..........
Gold’s eternal lustre
..........Apart from gold, the RBI’s reserve assets include foreign currency assets, Special Drawing Rights (SDRs) and reserves held with IMF. SDRs are artificial currencies used by the IMF and defined as a “basket of national currencies”. The IMF allocates SDRs to its member countries and uses them for internal accounting purposes. Central Banks are the biggest losers in the latest price crash as they own 31,694.8 tonnes or 19 per cent of all gold mined. It is reported that the recent fall in gold prices has already eroded $560 billion from the value of central bank reserves. Some central banks, such as that of Canada, eliminated their gold stock..................
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