.....The
RBI’s state now is similar to that of those giants: it can choose a
path like Bajaj did, by keeping its ageing patriarch at a distance to
remain meaningful, or be blind to the emerging needs and threats like
the Ambassador maker was and turn irrelevant. In Raghuram Rajan
arrives a new governor without bureaucratic baggage, who intends to make
the institution relevant in the decades ahead with financial
sophistication, rather than by beating the traditional safety drum.
Winds of change have begun to blow on the Mint Street......
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.
Friday, September 6, 2013
The Central Banker in Shining Armour
.....Rajan
has the potential to transform his country’s fortunes. He has the
perfect academic pedigree and, as a financial economist, strong market
credentials. In addition, as his maiden speech as governor reminded us,
he is an excellent communicator. He quoted Kipling to close his remarks,
presumably in the knowledge that “words are, of course, the most
powerful drug used by mankind.” And, judging from his words, Rajan knows
what needs to be done.................
Will the new RBI governor be able to suit action to words?
..........But it just might be better to set realistic goals and deliver (do an Infy!) than set goals that are out of sync with ground realities and then fall short! Remember Rajan’s biggest challenge will be to manage expectations, not only about inflation and the rupee, but also on what he himself can deliver ! ............
Read - ET
As Gods Desert, Will Raghu be Market’s Ram?
..........No governor in Reserve Bank of India’s history had spoken so much,
promised so many things, and raised the bar so high for himself on the
first day of taking charge. When Bimal Jalan had passed on the baton to
Yaga Venugopal Reddy in September 2003, Reddy, the newly appointed
governor then, had smiled teasingly at reporters to quip just three
words: “continuity with change.” But these are unprecedented times and for the past few weeks Rajan had been preparing for the day..............
Here’s Looking at You, Guv
The
vibrant agenda set out by the new RBI governor addresses most of the
issues — inflation, falling rupee, etc — that have been troubling the
Indian economy. The governor agrees inflation can arise due to supply
constraints. But what can he do about it? His predecessor cautioned the
government, but the warning went unheeded. The result: inflation
continues. Mr Rajan is also against “lazy banking” (investing in
government securities), but that can be reduced if government finances improve. Again, his predecessors have advised the government to rein in fiscal deficits but the government
ignored that advice. Rajan has promised commercial banks that they need
not approach the RBI for permission to open a branch. But that
assurance comes with a rider that it should be a “well-run scheduled
bank”. If the RBI carves out all the parameters of a well-run scheduled
bank, no bank in India would qualify, and, so, the liberalisation would
remain on RBI’s books!
K V RAO, Bangalore (ET)
Raghuram Rajan and the quest for a new monetary toolbox
........The so-called approach of pursuing multiple-objectives gave operational flexibility; yet it also raised some questions about the understanding of the monetary transmission mechanism and framework in India. For example, not having inflation control as the primary objective at all times indicated the belief that inflation process is perhaps driven by non-monetary and structural factors not under the control of RBI. Lack of a consistent and clear stand on the issue of objectives of certainly contributed to spiralling inflationary expectations in the past few years. The principle of constructive ambiguity should not be about the thinking and formulation of monetary policy but about the communication..............
Bonding at the right time
Raghuram Rajan, the new Governor of the Reserve Bank of India (RBI), in his maiden speech on Wednesday made several proposals. A key one — introducing inflation-indexation bonds (IIBs) linked to the consumer price index in November 3 comes at a good time. When RBI had re-launched IIBs this June, it was linked to the wholesale price index (WPI). Obviously, retail investors were not too enthused........
Commerce department pushes new RBI Governor for priority sector lending to exports
.....Apparently, Commerce Secretary S R Rao had taken up the matter “personally” with Raghuram Rajan, who took over as the country’s central bank governor on Wednesday, urging him to notify the rules based on recommendations by a committee headed by G Padmanabhan, executive director, RBI. The report by the technical committee on services/facilities for the exporters was submitted in May, but “internal processes within RBI has delayed the implementation”,..........
RBI asks Kerala temples how much gold they have
...........The majority of temples in the state come under the five different Devasom Boards, of which the Travancore Devasom Board is the biggest, with the famous Sabarimala temple falling within its jurisdiction. RBI's Regional Director Salim Gangadharan, speaking to IANS, confirmed that a letter had been sent, but clarified: "The RBI has no plans to buy gold, and this exercise is nothing but part of a statistical exercise." ................
Siddhi Vinayak is ready to deposit gold with RBI
Though most temples seem reluctant to deposit their stock of gold with the RBI, the Siddhi Vinayak Temple at Prabhadevi has set an example by showing readiness to deposit the yellow metal with the apex bank. During the Uttarakhand cloudburst tragedy too, the temple had donated Rs 1 crore for relief operations. Some of India's richest temples such as the Tirupati Balaji, the Sri Padmanabhaswamy , the Sri Krishna Temple of Guruvayur and Vaishnodevi seem to be in no mood to deposit the treasure to ease the supply crunch and control the outflow of dollars.
At a time when nothing seems to be able to stem the Indian rupee’s decline, a novel idea to boost the currency is doing the rounds; using the tonnes of gold stashed away in people’s homes and in temples, the bank could pay them an interest for their gold, and then sell a large portion of the stock in the domestic market – thus ultimately, reducing the need to import..........
Prepaid cards: RBI allows cash withdrawal of up to Rs 1,000 per day
....The Reserve Bank said the open system prepaid payment instruments (PPIs) issued by banks is perceived to be a subset of debit cards. "Hence, on a review of the position, it has been decided that the facility of cash withdrawal at POS with debit cards may be extended to such open system prepaid payment instruments issued by banks in India," an RBI notification said.......
Oh my 'Tubthumping' Rupee
........It's one thing to advise people to not buy gold and spend less on high-end electronic gadgets. It is completely another thing to follow these jingoistic bits of economic advice in every day life where no matter what, you have to gift goodies to your relatives even if it burns your pocket, you have to have a family holiday and you have to give something special to your spouse on your marriage anniversary...........
Rupee weakness is an opportunity for Indian tourism
.....It assumes significance now when the Rupee is consistently weakening, which in effect provides a foreign tourist more bang for his buck, when they travel to India. A smart traveler knows how to get the best deal and already the travel and tour fraternity is abuzz with talks of a good winter season for the Indian tourism industry with enquiries and bookings pouring in..............
Read - ET
CPCL plans to seek RBI's nod for commodity edging
........It is estimated that on an average, the offset of exchange gain /loss on product sale is around 70% of the exchange gain/loss on crude. Basu says the company is now looking at commodity hedging through its parent IOC. “We are planning to go to the Reserve Bank of India and IOC to seek their approvals for commodity hedging, it will protect us to large extent, along with natural hedging, though not completely.”........
Banks name defaulters, but hesitate on publishing photos
What’s in a name? Not much perhaps, but a picture speaks a thousand words. Or, so it seems, when delinquent borrowers don’t take offence at their names being made public but hustle to courts to stop banks from publishing their photographs in newspaper advertisements. Until lately, banks have been publishing photographs of people who did not repay loans. At least two high court verdicts in 2006 were in favour of this practice. But, in the wake of a conflicting verdict issued by the Calcutta high court in May, banks are now confused whether they should continue to publish photographs of delinquent clients............
Thursday, September 5, 2013
Raghuram Rajan takes over: What happened at RBI?
...........Electronic media persons were lined up since 9 am to welcome Rajan. Meanwhile outgoing governor Subbarao entered the building at 10 am and greeted waiting media persons. Sharp at 11 am Raghuram Rajan entered RBI central office in a white Corolla and was greeted at main gate by all four deputy governors -- K C Chakrabarty, Anand Sinha, H R Khan and Urjit Patel. Rajan and four deputy governors walked on portico accompanied by other senior officials..............
Chennai Express Steams into Mint St
M&M boss Anand Mahindra tweeted: “He hails from Tamil Nadu. If he’s a blockbuster hit, we’ll call him the Chennai Express.” Mahindra
had a point. The first day, first show of Raghuram Rajan felt like a
central banking equivalent of a blockbuster movie opening. Yes, everyone
knew Rajan is a star. But no one expected such a dramatic script. As
the second-youngest RBI governor read out his first set of policy
interventions, even normally voluble TV anchors were at a loss for
words..............
Read - ET
Read - ET
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