........The move comes even as the monetary authority had last October increased the provisioning for standard restructured loans to 2.75 per cent from 2 per cent and had said it would gradually go up to 5 per cent of the recast amount. The latest step comes following the recommendations of a RBI working group, headed by B Mahapatra, to review the existing prudential norms on restructuring of advances by banks/financial institutions. Following this, the RBI had issued the draft norms on January 31......
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Saturday, May 4, 2013
Reserve Bank of India concerned over dependence on ECBs
......India's strong dependence on external and short-term debts for financing current account deficit remains a key concern for the Reserve Bank, although the deficit may ease in the fourth quarter due to the fall in global commodity prices...........
‘We are close to the end of the easing cycle’
overnorship of the Reserve Bank of India (RBI) has been a roller coaster ride for Duvvuri Subbarao. In a short span of over four years, he has eased, hiked and again eased interest rates. Soon after presenting his last annual monetary and credit policy on Friday – his five-year term ends in September this year – Subbarao revealed his mind on all things macroeconomic to Parnika Sokhi and Megha Mandavia. Excerpt from the interview:.........
No loan against gold coins weighing above 50 grams, proposes RBI
..........."While there may not be any objection to grant of advances against specially minted gold coins sold by banks, there is a risk that some of these coins would be weighing much more, thereby circumventing the Reserve Bank's guidelines regarding restrictions on grant of advance against gold bullion,"...........
RBI got 3 complaints on black marketing of coins: Government
........"The RBI has received three complains regarding trading/ black marketing of coins during the twelve months, one each at Rajkot, Mumbai and New Delhi,".......
RBI's 5.7% growth forecast for 2013-14 pessimistic: Montek
........"Reserve Bank is clearly more pessimistic than the government is. I think that the government forecast as of now is feasible. Critically what matters is, how effective we are in restoring the momentum of investment in the large projects", .......
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Seven take-aways for common-man from RBI's monetary statement
NEW DELHI: The Reserve Bank of India (RBI) in its Monetary Policy Statement for 2013-14 has highlighted several measures that will help in financial inclusion and also help common man with day-to-day banking transactions..........
The Subbarao magic: How the Sensex see-sawed
For those watching the stock price movements before, during and after the RBI Governor’s announcement of the repo rate cut by 25 basis points today leaving the cash reserve ratio (CRR) untouched, it was a revelation to see how much the market dances to his tune, particularly when he is about to make key policy announcements.............
C Rangarajan supports 'hawkish' RBI rate cut
............"It is a measured response to the current economic situation. WPI inflation has shown signs of decline and the retail inflation still remains at a high level, CAD is also high,"........
We said ‘little’, not ‘no space’ for monetary easing
Reserve Bank of India (RBI) Governor D.Subbarao sees very little space for further rate cuts. But if the current account deficit shrinks and inflation moderates faster than RBI expects, then there will be space for rate cuts. In an interview, he spoke on issues ranging from gold import to banks’ refusal to pare rates and deposit-taking firms in Kolkata going bust. Subbarao is set to retire in September after having taken over as governor in September 2008. Edited excerpts:.............
More rate cuts coming, says P. Chidambaram
......Accepting Reserve Bank's stance on policy rate for what it is, Finance Minister P. Chidambaram today expressed hope that declining inflation would increase the scope for rate cut by the central bank. "Let's accept what has been done today and let us see what the future holds", ...........
Raghuram Rajan welcomes RBI’s rate cut decision
........“Going forward, if inflation stays low and we can bring food prices down, hopefully they (RBI) will have more room to bring down rates.”...........
Rate cuts by RBI and ECB reverberate at ADB meet
.....In India, automatic financing of fiscal deficit has been discontinued since 1990s. However, still many analysts believe RBI indirectly does finance the deficit through its expansionary tools. Whether there could be similar or coordinated monetary actions worldwide? In former RBI Deputy Governor Subir Gokarn’s view, the objectives of monetary actions are different in different parts of the world.......
RBI Governor D Subbarao defends holding CRR, says system has Rs 5 tn excess money
......"The view that the Reserve Bank can improve liquidity only by cutting the CRR is mistaken. We can understand banks saying it, but all of us should understand that liquidity is more than reducing CRR," ............
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RBI’s mother-in-law syndrome
...........RBI is expected to take steps to ensure that the economy is firmly on a growth path even though it cannot afford to lose sight of the inflation threat. In this context, once again, the RBI policy document has expressed the central bank’s helplessness—it alone cannot do anything unless the government takes care of supply-side constraints, particularly in the food and infrastructure sectors, and addresses critical governance issues, besides reining in the fiscal deficit. Subbarao has been saying this for years now, like a nagging mother-in-law. The government has been pretending to listen, but unless it seriously addresses these issues, inflation will once again raise its hydra head and growth will be stymied.........
Going halfway
Monetary transmission is a problem: D Subbarao
......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.......
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,”............
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