......If communication is seen as an instrument of policy, our communication through the document should be seen as a part of the action. So, we reduced rate today but communicated about what we might or might not do in the future. I don’t think you should see that as a disconnect. Rather, you should see it as our endeavour to use communication to guide the market.......
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
Balancing act amid challenging times: V R Iyer
....It has also warned about policy reversals in case of worsening current account deficit scenario. RBI has shown concern over inflation, especially retail inflation, and has tried to maintain a fine balance between growth-inflation dynamics by not going overboard on cuts.......
It's back to the government: R Shankar Raman
....Given the complex and myriad challenges faced by India, it is clear that monetary action alone cannot revive growth. It needs to be complemented by rapid and purposeful action by the government in reviving investment and de-bottlenecking growth impediments. On the ground, evidence suggests the recent reform push is not translating into meaningful activity as yet.......
'I'm not a great storyteller but have a good story to tell'
.....“I’m not a great storyteller, but have a good story to tell...I expect India’s growth to be robust and sustainable. I am confident it would gather further momentum in the coming years...The FDI (foreign direct investment) regime in areas such as multi/single-brand retail and aviation have been further liberalised and I am confident there would be forward-movement in areas such as insurance and pension,”............
Sorry Chidu, rate cut doesn’t often mean cheaper mone
...........But here’s an eye-opener. The RBI may cut rates, but banks are not buying the idea. An interesting bit of statistic from Subbarao’s Monetary Policy Statement for 2013-14, announced today, shows that banks are playing Scrooge. They have held on to most of the gains coming to them from monetary easing during the whole of 2012-13............
Why be so glum, Guv Subbarao? Investment is picking, not falling in India
The remarkable thing about the Reserve Bank of India's (RBI) Monetary Policy Statement for 2013-14 is its excessively pessimistic prognosis about India's short-term economic prospects. The RBI is not a neutral observer — its pronouncements can have a self-fulfilling momentum. It has to be more circumspect about forecasts that dampen sentiment...........
India cbank deputy: Difficult to say if rate cut will revive investment
The Reserve Bank of India's (RBI) third straight rate cut so far in 2013 may not be a surefire tool to revive investment unless supply constraints are eased, Deputy Governor Urjit Patel told reporters in a post-policy talk on Friday.............
RBI does its bit
......The RBI took comfort in the reduction in the wholesale inflation to six per cent in March, but the retail inflation still ruled high in double- digits. In small doses, the RBI had cut the prime lending rate by 100 basis points in the last fiscal, while it had reduced the cash reserve ratio by 75 basis points. This failed to boost growth because it was not dependent entirely on monetary policy.........
RBI plays safe
As a central banker, RBI needs to be cautious, but its inflationary fears appear a bit heightened
..........The central bank’s monetary policy stance continues to baffle, and not just because it is not clear how RBI expects to see rate cuts by banks in a liquidity-constrained situation. In earlier policies, the RBI’s talk has been different from its walk. This time around, including in Thursday’s pre-policy macro statement, a hawkish RBI has talked of limited room for cutting rates. Friday’s monetary policy statement talks of upside risks to inflation being significant in the near-term and .............
Ghost of inflation continues to haunt Mint Road
.......Despite average inflation in 2012-13 falling to 7.3 per cent from 8.9 per cent a year ago, and the central bank's own projection for March 2014 inflation at five per cent, RBI Governor D Subbarao seems to be in no mood to lower the guard.........
The interest rate-growth disconnect
.........RBI, on the other hand, has always argued that the link between interest rates and investment is tenuous, and there is evidence to show that low interest rates by themselves cannot bring about growth. This argument sounds right because nobody borrows money merely because it is cheap—like merely because interest rates come down, one does not buy a house as other conditions also matter such as own income and price of property........
Mayaram says sentiment improving, Montek says RBI too pessimistic
In
a strong signal that the government does not agree with RBI’s
assessment of the economy, the finance ministry on Friday said India
would grow at least 6% in the current financial year, citing a pickup in
investment and rising investor confidence. RBI has projected the Indian
economy to grow at 5.7%, which is lower than even some private forecasts............
Read - ET
Read - ET
RBI can Take Only Singles, Govt has to Play Big Shots
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
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.
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