We
are in the thick of IPL season and, unsurprisingly, there haven’t been
too many orthodox, straight bat (riskaverse) shots. But we certainly got one from the Reserve Bank yesterday.............
Read - ET
Read - ET
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.
Saturday, May 4, 2013
Rate is Cut, Cut Red Tape
.........And you thought that Subbarao could make all these hurdles vanish with one rate cut?............‘Chit funds are a regulated sector
..........Chit funds are a traditional business, strongly regulated by the State Government and Central laws and the Reserve Bank of India, clarified the Tamil Nadu Chit Fund Companies Association. Addressing a press conference organised by it, T. S. Sivaramakrishnan, General Secretary, All India Association of Chit Funds, said the public should not confuse chit funds with the unorganised, unregulated companies that take deposits promising unrealistic rates of return or operate Ponzi schemes............
We can’t yet declare victory in war on inflation: D Subbarao
.....That is because even as inflation has come closer to the threshold level, the risks are present. First, there is this consumer price inflation, which is still in double digits. That's the inflation that people experience in the market. That shapes inflation expectations. Then there is the current account deficit, commodity prices, especially oil price, imported inflation, food prices. Then rural wages, minimum support prices and so on... So, there are several upside risks to inflation. We cannot declare victory as yet.
Read - ET......
Lower inflation can bring down deposit rates: Urjit Patel
......."You may get deeper (monetary) transmission as inflation comes down....banks will get confidence so that they can reduce their deposit rates without deposits leaving the banking system,".........
‘End non-home branch fees, fairly price retail loan’
..........The Reserve Bank has asked banks to stop differentiating between home-branch and non-home branch for customers, and ensure rates of interest for auto and home loans must not vary between customers without a clear reason. RBI told banks that variation in pricing for services makes no sense when all of them are connected by a common network..........
Get a fix on deposits
........For senior citizen deposits, most public sector banks have started cutting the additional interest (or premium) they pay on fixed deposits of these citizens. The move comes after after the finance minister's observation at a meeting with heads of public sector banks in November last year that the additional interest for senior citizens may be reasonable, but not excessive. SBI reduced the premium on senior citizens' fixed deposits from 50 bps to 25 bps last month and a week later PNB followed suit...........
Thursday, May 2, 2013
Can the RBI innovate?
.................Recycling of credit does not happen in the context of accumulation of non-performing assets and restructuring of assets. As rightly pointed out, the RBI is in a dilemma, and how it is going to face it is worth watching. Maybe the RBI has some innovative ways to rescue the economy from the situation with positive results.
Regulators, get serious
.................The Reserve Bank of India, some believe, has been harsh on new banking licence applicants. How could it insist as a precondition that at least 25 per cent of the branches should be located in rural areas, they argue. Why push them into the rural backwaters where banking is conspicuous by its absence, is their refrain..........
Financial literacy stall opened
.....Regional Director of RBI (Hyderabad) A.S. Rao, who inaugurated the stall, said financial literacy would help achieve inclusive growth. The stall propagates on currency management, entrepreneurship, study loans, facilitation of development of preferred sectors, credit cards, banking ombudsman and precautions to be taken in investing in deposits.........
Banking boom in Diphu
.............A town which house 63654 thousand people, and nine banks and their branches plus numerous divisions of a rural bank on the periphery of this small class II town to serve the people, seems quite out of proportion, but reason for sudden boom in the banking sector centring Diphu town, headquarter of Karbi Anglong Autonomous Council is based on purely speculative prospect............
ATM expansion has urban bias
......It’s difficult for customers living in semi-urban and rural areas to find ATMs (automated teller machines) while easy for those in metro cities. The reason being banks are installing more ATMs in urban areas than in rural ones. Banks have installed just 1,931 ATMs in the rural areas ........
DA Increase for Bankers from May, 2013 to July 2013
..............Based on the above calculations the new DA will be @ 84.15 %, for the months of May, 2013 to July 2013 onwards [The DA for February 2013 to April 2013 was 80.25%] i.e. increase of 3.90 %. (increase of 26 slabs).........
Reinventing the growth wheel
............However, apart from the quantum of rate cut, the other important aspect will be to see RBI’s assessment of the Indian economy and its guidance for the current financial year. Action by the central bank will be important, but it will not be the only factor that will decide the fate of the Indian economy in the current fiscal and beyond. ........
It's time RBI supports growth
Over the last couple of years, the central bank has not cut rates significantly for a wide variety of reasons. Even though core inflation (non-food manufacturing inflation) started softening a while ago, the central bank held on to rates as both fiscal and current account deficits along with consumer price inflation stayed above its comfort zone. Now, it seems that the central bank will have little reason to justify its hawkish stance on rates.......
RBI to go for rate cut, project lower inflation, higher growth
............This will be RBI Governor D.Subbarao’s fifth and last annual monetary policy since he took over the reins in September 2008 after the collapse of US investment bank Lehman Brothers Holdings Inc. that plunged the world into an unprecedented credit crunch. In relative terms, this is possibly Subbarao’s easiest policy as low inflation and the even lower inflation outlook in the short term—because of a drop in crude and gold prices and insipid growth indicators—will help him make up his mind on the rate trajectory. Inflation is expected to rise only after he leaves the corner room at the Indian central bank’s headquarters on Mint Road in Mumbai in September.........
RBI does not have clear inflation objective: Richard Illey
........ RBI does not have a clear inflation objective. It is trying to address a pretty wide menu of options in inflation. The CPI is a better measure for the consumer. The sticky nature of CPI largely reflects two things. The high food inflation is putting a lot of pressure on the CPI and food inflation is also stubborn. A more elevated CPI is an impediment to aggressive rate cuts.........
Run-up to RBI annual policy review
.................“RBI will take a cautious stance and reiterate that the recent developments in terms of softening of inflation and commodity prices, if the trend continues then probably there can be more rate cuts. But I do not think they will give a clear signal of more rate cuts as on May 3 because they are very conditional that way. RBI will wait and watch to see how things pan out. The guidance may not be as hard as it was in March. ......
RBI given the go-by
......Some banks have advocated that the RBI should have reduced CRR and SLR to increase the money supply. But while during the previous occasion CRR was also cut, the response from banks was negative. Under such circumstances, the open market tool of RBI has failed to bring in the desired result. The culprit is the “base rate” system, which is not effective, and the banks, including SBI and public sector banks, do not want effective implementation of the base rate system.......
RBI probes sale of gold coins by 30 Indian banks
.........The central bank is studying the business practices of 30 banks to ascertain any mis-selling of these products and to find whether such products are being sold as a pre-condition for offering the regular banking services, sources said. The RBI is also looking into complaints that bank staff are being pressurised by their senior officers to sell gold coins and other gold-related products in lieu of incentives..........
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