.... It is for the Government and not for the RBI to seriously ponder over the whole issue of inflation control at this critical juncture where the failure of the government is predominant. RBI's balance sheet expansion is also a direct reflection of Government"s poor finances.
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.
Tuesday, September 17, 2013
Vegetable prices and inflation
.........If one carries Rs 500 note, one can have vegetables and one or two fruits for a day for a four member family is the ground reality. The economics practiced by the Government cannot be understood even by the economists is not an exaggeration. .................
Rising WPI inflation could tie RBI’s hands
.......In his inaugural address to the media, Rajan emphasised RBI’s role in ensuring monetary stability, suggesting that he would not adopt any softer stance on inflation in favour of growth. “Ultimately, this means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures,” he said............
Limited policy options
......But all this should not warrant any thought that the economy was back on the growth path. It is not. Fortunately, most economic players do not expect that Rajan has too many options to effect major changes in the monetary policy. A survey of economic pundits by a pink paper revealed that there is near unanimity that the time is not ripe for a reduction in the policy rate. Inflation, especially food inflation, continues to hover close to double- digits. Besides, the modest currency appreciation does not in any way suggest that the pressure on it is off..........
RBI may unwind some cash tightening steps: experts
India's headline inflation rose at the fastest pace for six months in August, driven by an 18% jump in food prices, a reminder of the economic pressure new Reserve Bank of India (RBI) governor Raghuram Rajan faces ahead of his first policy meeting this week............
The malaise that drove down the rupee
........The flurry of policy announcements in recent weeks is based on the diagnosis that the relentless slide of the rupee, attributed to the widening Current Account Deficit (CAD), can be arrested if and when capital inflows — as investments or borrowings — fill the gap. Reserve Bank of India governor Raghuram Rajan’s recent announcement allowing banks to borrow from global capital markets at a time when interest rates are rising because of the expected reversal of the United States Federal Reserve’s easy money policy is tailored to this logic.............
Forex counters in Duty Free Area
In order to provide money changing facility to non-resident Indians to convert unspent rupees with them, the Reserve Bank of India said Foreign Exchange Counters can be established in the Duty Free Area/Security Hold Area beyond the Immigration/ Customs desk in international airports in India by entities authorised to deal in foreign exchange........
Banks Yet to Take Up New Guv’s Offer on Easier Global Funding
It
is more than 10 days since RBI governor Raghuram Rajan eased overseas
fund-raising for banks, but hardly any bank has moved. Bankers are
worried about the reaction of regulators overseas and the use of funds
when there is not much demand for loans. There is also apprehension that
the cost of fund may be on the rise after the jump in the US treasury
yields to 3%...........
Read - ET
Read - ET
Temples now the only hope for gold industry?
.....“ If the temples release some of their gold, the country need not import this for another four- five months. It will be win- win situation for both the government and the temples. The government will save a lot of foreign exchange," he added. All this is predicated on building consensus between the temples on parting with some of their gold. There were reports that the RBI had sent a circular to some of India's prominent temples seeking details of their gold stocks.............
RBI tightens rules on lending against gold jewellery
............The new rules include strict documentation for high value loans against gold and prohibition of misleading advertisements by NBFCs such as offering availability of gold loans in a matter of 2-3 minutes.The guidelines are broadly based on the January recommendations of an expert panel set up by RBI, headed by K.U.B.Rao. The RBI, however, did not accept the recommendation of the panel for higher loan-to-value (LTV) ratio on gold loans. ...........
We pointed out our exclusion to RBI in 4-6 days: Prem Pal Gandhi
.............RBI said it 'inadvertently' missed out the company's name while releasing the applicants list on July 1. Did you pointed out to RBI about the exclusion? If so, when was the communication made? Why do you think RBI took close to three months to rectify the mistake?..............
First Leasing moves court against RBI order
CHENNAI, SEPT. 16:
The Chennai-based First Leasing Company of India has approached the Madras High Court following the Reserve Bank of India order stopping it from transacting any further business, according to Farouk Irani, Managing Director, First Leasing. The RBI directive on Saturday said the decision follows an inspection of the company’s books of accounts and related documents as of March 31, 2013. Irani said the company does not agree that even regular expenses should require RBI’s clearance, and “hence we have approached the court”...........
YES Bank becomes first lender to use new swap rules
YES Bank, the country's youngest private sector lender, has become the first bank to take advantage of the Reserve Bank of India (RBI)'s new swap rules. The bank has raised $255 million via a dual currency, multi-tenor syndicated loan facility. The move comes barely days after RBI allowed banks to raise money (above 50 per cent of their tier-I capital) from foreign markets with a minimum maturity of three years and swap the borrowings with it at a subsidised rate for one to three years............
RBI must consider giving new bank licences on tap: Rangarajan
The RBI should consider giving new bank licences on tap, C. Rangarajan, Chairman to the Prime Minister’s Economic Advisory Council, has suggested. This would mean a system wherein the Reserve Bank of India awards licenses throughout the year to those entities who fulfil specified criteria. Currently, the RBI follows what is known as a ‘stop and go’ or a ‘block’ licensing policy for banks, where it periodically issues new banking licences. The RBI is in the process of selecting candidates from the corporate sector for the award of new licences. India Inc has been lobbying for an ‘on tap’ bank licence policy, something which the RBI has so far resisted.........
Why there is a need to put an end to 'Banana Banking'
.......“For the umpteenth time, I reiterate that the reason for NPA is non-performing administration…What is really puzzling is why this affects the Public sector banks the most… In our assessment, the project appraisal and the decision making in public sector banks has been more impressionistic rather than being information based. How else does one defend the eagerness of some banks to fund power distribution companies with negative net worth!.".................
Foreign banks to provide upfront loans for Indian dollar deposits
......Foreign banks will finance the bulk of these dollar deposits. This is likely to be welcome news for Indian authorities because it could avoid the need for a sovereign bond or special government-backed deposit schemes to attract dollar inflows to support the rupee...........
Will ensure depositor’s money is safe post-NSEL crisis: Pilot
.......“the idea is to make sure we can detect things before they occur as we have technology to ‘red flag’ such cases. We are in the process of plugging the gaps in regulations between authorities such as Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI) and the Ministry of Corporate Affairs as we all have to work together to prevent wrongdoing”..........
SBI expects Rs 4,000-cr capital infusion from government this financial year
.........."We have requested the government for Rs 4,000-crore capital infusion (in the current financial year)," SBI Chairman Pratip Chaudhuri said here on the sidelines of a function to launch an Air India-SBI co-branded credit card. When asked about his expectations from the coming RBI policy review, he said the bank had recommended a cut in the cash reserve ratio (CRR), as well as in repo rate..............
Ex-SBI MD Divakar Gupta to join Aditya Birla Group firm
...........Diwakar Gupta, former managing director and chief financial officer (CFO) of State Bank of India (SBI), is set to join Aditya Birla Finance, an Aditya Birla Group company, as consultant and guide the company for its planned entry into the banking sector. Aditya Birla Finance is part of Aditya Birla Nuvo, one of the 26 companies that have applied for new banking licences. Earlier, Aditya Birla Group had roped in A K Khound, former chief general manager of the Reserve Bank of India (in charge of the department of banking development and operations), as advisor.............
Monday, September 16, 2013
History of economic crisis and reforms: Deja Vu?
..........The fourth volume of RBI’s history (1981-1997), the outcome of three years’ work by current and former officials of RBI, and guided by an independent advisory committee under the chairmanship of former RBI governor Bimal Jalan, is much more than the story of central banking—it’s the economic history of India during that period....................
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