..."The recent stability in rupee coupled with kharif output will ease sequential inflationary pressures going forward. This should prompt the RBI to continue on the path of monetary policy normalisation by reducing the MSF rate further," Assocham President Rana Kapoor said..........
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.
Wednesday, October 16, 2013
Rupee revived by Raghuram Rajan as carry trade favourite
Reserve Bank of India (RBI) governor Raghuram Rajan has turned the rupee from a pariah to the world’s favourite currency after just a month in office as he intensifies efforts to quell inflation and lure capital. Investors selling dollars to buy rupees earned 10% since Rajan took over on 4 September, the most among 44 currencies tracked by Bloomberg and a turnaround from a 2.8% third- quarter loss......
Rising inflation ensures Rajan can’t do much on repo rate
.......However, the latest inflation figures have put paid to all such hopes, at least for now. While Rajan did try and inject some liquidity into the system by lowering the Marginal Standing Facility for banks twice since he took over, his hands are clearly tied on the repo rate front. The repo rate—the rate at which RBI lends short-term funds to banks—is the benchmark RBI uses as the key monetary policy tool. The last time around—on 20 September—RBI actually had to increase the repo rate by 25 bps to signal its resolve in tackling rising prices........
25 mn small borrowers' data now a click away
......However, there are a number of challenges in collating data from small borrowers. While several MFIs submit data to the credit bureaus on a weekly basis, only a few provide data on a monthly basis, which limits the scope of the database, according to Ghosh. Again, lack of uniformity in data structure poses a challenge in the process. Yet, the biggest challenge in having a coherent database of small borrowers comes from non-government organisations, credit co-operative societies and self-help groups (SHGs), which do not furnish data to the credit bureaus.........
'One-fourth of MSMEs do not have access to banks for credit'
As high as three-fourth of India's Micro, Small and Medium Enterprises (MSMEs) do not have any access to banks or institutional financing channels making their businesses vulnerable, according to a study. Only about 33% of the country's MSMEs have access to banks or institutional financing channels, said a study jointly done by financial advisory firm ResurgentIndia and industry chamber Assocham.........
RBI rejects takeout finance plan of IIFCL’s London arm
........The RBI’s move is a setback of sorts for the state-owned infrastructure lender, IIFCL, which was betting big on takeout finance to speed up disbursements from its London subsidiary. Takeout financing at London was envisaged to be similar to IIFCL’s takeout scheme in India. Under takeout financing, loans made by banks to infrastructure firms are sold to IIFCL so that banks recover their funds ahead of the payment schedule under the loan agreement...........
HDFC Bank: Cheques and imbalances
HDFC Bank managed to beat Street expectations once again. During the quarter ended September, it reported a net profit of Rs 1,982 crore ahead of Street's consensus estimates of Rs 1,964 crore. This would come as a positive surprise to investors prepared for worse, given several headwinds the bank faces: Low credit growth, tight liquidity, rising interest rate, falling GDP growth and pressure on assets. .........
Corporation Bank's new CMD sets clear agenda
.........The current business environment was highly dynamic and changes were occurring at a rapid pace, Bansal said, adding new bank licences were being considered, which would increase competition further. Regulatory pressures were increasing and credit offtake continued to be challenging, he said in a communication to employees................
Postal Life Insurance day celebrated
....Postal life insurance was started with effect from 01 February 1884 for central government/ state government officials, defence personnel, officials of govt institutions, municipal corporation and boards, government universities, employees of nationalized banks, additional bodies of State Banks of India and Reserve Bank, operational units under central/state government, UTI, IDBI and employees of state insurance corporation...........
Aadhaar de-duplication myth busted. Any answers, Mr Nilekani?
..........According to a report in Matrubhoomi, a Kerala-based newspaper, PV Narayanan, a resident of Panatthadi panchayat received two Aadhaar numbers: 548780623023 and 356459270677. The names on both these letters issued by UIDAI are same, with slight different photos. Narayanan probably may have registered at two places or centres. But, surprisingly, his fingerprints seem to have passed the so-called ‘robust’ de-duplication test of UIDAI. Since Aadhaar includes an iris scan, this too seems to have been missed...........
Tuesday, October 15, 2013
Is the Raghuram Rajan-Chidambaram bonhomie too good to be true?
........When Chidambaram returned to the Finance Ministry from another corner in the North Block -- Home Ministry -- only a little over a year was left of Subbarao's extended five-year tenure. Subbarao's predecessor Y V Reddy also had skirmishes with the North Block on the issue of autonomy and fiscal consolidation. However, the finance minister showed his disappointment with monetary stance taken by Subbarao when the former had already announced a five-year fiscal consolidation road map. Rajan is still in the honeymoon period. Criticizing the governor from the beginning itself would take sting out of the criticism, analysts say. Moreover, taking on Rajan is not the same as opposing Subbarao's policy since the former is renowned world over for his commentaries on the financial world..........
India Needs More Banks, Foreign or Not
RBI governor Raghuram Rajan’s promise of easier entry of foreign
banks into India is welcome. This would raise competition and efficiency and
bring in technology and expertise to foster financial inclusion. Much of rural
India lies outside the reach of banking, because of the high cost of
traditional banking. True, foreign banks also operate largely in urban areas:
of the 333 foreign bank branches, 331 are in urban areas, of which only 44 are
in under-banked districts..............
Read - ET
Bigger play for foreign banks easier said than done?
Could Raghuram Rajan’s announcement on letting foreign banks enter India in a bigger way, be easier said than done? At a time when there is literally no good news coming out of India, and the government is in no position to undertake big reforms in a pre-election year, the RBI seems to be initiating these bold moves in a bid to attract more capital into the country..........
AIBEA opposes banking reforms
The All India Bank Employees Association on Monday said that it will launch an agitation if the Reserve Bank of India proceeds with any proposal allowing takeover of Indian banks by foreign banks. “We strongly oppose the RBI Governor’s proposals aimed at takeover of our banks by foreign banks. These are against our country’s interest,” C.H. Venkatachalam, General Secretary of the association, said............
BJP demands debate on banking reforms
.........The BJP on Monday said Rajan’s statement went against the statements made by the Centre that the policy of “nationalisation” of banks would not be reversed. It said such a policy decision with far-reaching implications should not have been announced on foreign soil without any discussions in India.........
BRAKES ON BANKING BY POST OFFICES
.......... The finance ministry objected on the ground that the Indian Posts has been incurring huge losses over the last 11 years that will not enthuse the RBI to give it a licence to start the bank. Its loss in 2011- 12 alone was Rs 6346 crore. The Finance Ministry also cited a poor financial track records of the postal department that does not give it credibility to start the banking operations..........
Lighter moment.............
Raghuram Rajan, Governor of Reserve Bank of India and his wife Radhika enjoy a lighter moment with Arundhati Bhattacharya (right), Chairperson, State Bank of India, during a reception on the sidelines of the World Bank-IMF Autumn Summit 2013 in Washington DC on Sunday.
Kotak Mahindra Bank to move into Bandra Kurla Complex
Kotak Mahindra Bank Managing Director Uday Kotak along with the bank’s operating management committee, including C. Jayaram and Dipak Gupta, are soon to get a swank new office address at Bandra Kurla Complex in Mumbai. After playing host to the who’s who of Mumbai’s banking corporates, including ICICI Bank, Bank of Baroda, Bank of India, IDFC, Standard Chartered, HSBC, Deutsche Bank and Citibank, the complex is now set to welcome the latest entrant after a four-year wait...........
IBA and UFBU Again Ditch Bankers - October 2013 Round too Fails
...Union leaders need to realize that they already have lost the crucial time for wage revisions and bankers are fast losing faith in them. This round of talks was held exactly after two months and now the salary revision has already become due for almost an year. Every passing week, weakens the strength of unions to negotiate..........
Wage Revision Talk : Bank Employees resentment on delaying tendency of Govt
Wage revision talk was held in cordial environment but govt representative IBA’s unconfirmed assurance was hurdle in reaching on any conclusion. The UFBU has shown their concerned and dissatisfaction on undue delay and demonstrations throughout the country in all State capitals and other Major Centres on 22nd October 2013 demanding expeditious wage settlement...........
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