World outside RBI

My View on "Fit-to-play the second inning................": 

Best wishes to Ramachandra Shelar and Milind Khopkar when they are joining us. My own experience is, if one is healthy and the environment around is peaceful, there is enough ‘work’ to do outside RBI. Wish both of them and all other RBI colleagues who are retiring today (June 30, 2014), a happy, healthy, peaceful, active post-retirement life. To continue the interaction, each one of them is invited to regularly visit VITALINFO and to join Madan Gauria’s EXRBITES Group (For any suggestion/problem/assistance or any further information you want about the Group please feel free to contact Shri Madan Gauria on madan.gauria@yahoo.com) 

- M.G.Warrier

Tax exemption limit under 80C may rise to Rs 2 lakh

.............Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80 CCC of the Income-Tax Act. Sources said the revenue department is assessing the burden on the exchequer in case of increase in the benefit limit. The announcement is expected in the Budget................

Read | Business Standard

As RBI locks bank's FDs, man struggles to fund surgery

..........With the Rs 3-lakh surgery scheduled for tomorrow at Hinduja Hospital, Vaidhya has been trying to encash his R4-lakh fixed deposit (FD) at Kapol Cooperative Bank, only to be told he could not do so because the RBI appointed an administrator to the bank and banned premature withdrawals of FDs last week...............

Read - Mid-Day

‘Gambling debts led UK graduate to murder aunt’

Gambling debts and the pressure to repay his lenders led a 29-year-old MS graduate from the University of Glasgow to murder his aunt in Royapettah last Tuesday, the police have said. The victim, Mehrunnisa (55), a retired RBI employee, was found dead last week, gagged and with her hands and legs tied up, at her second floor house on Devarajan Street. Her body was found by her husband Ali Ahmed, who runs a printing press. The murder had sent shockwaves in the city.........

Read - The Hindu

SBI to open digital bank in malls, will offer instant loans

..............The first lot comprising of seven pilot digital branches will be opened largely in high street malls in various cities on Tuesday . The banking stores are supported by self-service touch devices, which enable instant account opening with an instant debit card. Customers will have access to remote experts through high definition videos............

Read - TOI

Home ministry asks RBI get ATMs that can generate receipts in Hindi

.................ET has accessed identical letters written by the home ministry on February 25 to the RBI governor Raghuram Rajan, then secretary of department of financial services Rajiv Takru and chairman of the Indian Banks Association KR Kamath, asking for only those ATMs to be procured in future that can produce receipts both in Hindi and English and instructions to two major foreign suppliers to upgrade the software in the existing ATMs to ensure printouts in Hindi................... 

Read - ET

Soon, access all investment details from one Demat account

...........The sub-committee of the Financial Stability and Development Council, or FSDC, a forum of regulators monitoring financial stability and inter-regulatory co-ordination, headed by the Reserve Bank of India governor, has been working on this initiative after former finance minister P Chidambaram announced a single demat account for all financial investments in the interim budget............. 

Read - ET

Look at long term planning

My View on  "Food Inflation: A Stubborn Sore in the Indian Econ...": 

For taming inflation or plainly to retain prices within acceptable levels, long term planning, regulatory support and coordinated efforts by government and stakeholders in the market and better consumer-awareness may have to get more attention. Onion prices are one indicator to show how those who gain a control over stocks of goods that have a longer shelf-life manipulate prices. Government may not need an economist to tell that the position of demand and supply has an impact on prices. Procurement by processing industry and wholesalers who have ongoing responsibility to maintain supplies to retail outlets like departmental stores and supply-chains, purchase by affluent pockets/states within the country which can afford to pay higher prices and export-commitments affect prices of vegetables, meat and eggs. A long term solution may have to look at improving/increasing production by ensuring remunerative farm-gate prices, estimating in advance the state-wise requirements for consumption, processing and export and regulating inter-state movements taking into account the potential for increasing local production. 

- M.G.Warrier

RBI switches to online bond platform to manage cash conditions

.................Using an electronic trading platform that gives the RBI anonymity marks a departure from its usual open market operations and from the practices of other major central banks in Asia. The RBI had previously used open market operations to add or drain liquidity, a relatively public system that allowed traders to position themselves to try to profit from the central bank's transactions..........

Read | Business Standard

Financial inclusion transactions data to help focus on growth

...................A team from Reserve Bank of India (RBI) had visited some branches in the district recently to study the reason for the low CD ratio in the district, he said. Prasad Rao suggested that the banks focus more on extending financial assistance to MSME (micro, small and medium enterprises) in the district. This will also help create more job opportunities in the region.......

Read - HBL

Banks and budget: cut stake in PSU banks, rein in inflation

.........Third, the government should chart out a clear plan to cut its stake in public sector unit (PSU) banks, as recommended by the P.J. Nayak Committee. That will help with the fiscal deficit problem as divestment will raise funds. Moreover, banks will be allowed to raise more money from the open market and it solves the recapitalization problem. In the...........

Read - Mint

Vijay Mallya gets more time to appear before wilful defaulter panel

Chairman of Kingfisher Airlines, Vijay Mallya, has been granted 15 more days for appearing before a committee constituted by United Bank of India to examine if the liquor baron has defaulted to the lender deliberately................

Read | Business Standard

Banking sector: Bad loans, governance, capital top concerns

......Constraints like dual regulation of public sector banks by the finance ministry and RBI, short appointment tenure of the leadership in banks, low compensation, vigilance enforcement and applicability of the right to information law should be rapidly eliminated or significantly reduced to avoid erosion of competitiveness of state-owned banks, the panel said. The Nayak committee has also recommended................

Read - Mint

Basel balm

Central bankers know what's wrong with the world economy but are struggling to come up with a cure. That, at least, is the message from the latest annual report from the Bank for International Settlements. It worries that global growth is feeble and financial markets are piling up risks. Yet its proposed remedies of tighter monetary policy and structural reform are far from convincing..................

Read | Business Standard

Dealing with defaulters

.............Apart from the fallouts of this scam of enormous proportions being perpetrated on the Indian economy, the issue has a moral aspect as well. Why should the taxpayer's hard-earned money be squandered away repeatedly? And why should an honest entrepreneur repaying his loan, be at a disadvantage, compared to the dishonest ones?................

Read | Business Standard

ARCs or Money Spinners?

Apropos `Good Money After Bad' (ET, Jun 30), the writer has not indicated what is lacking in the RBI approach. Also, banks stop charging interest on the NPA accounts, so, should the ARC be allowed to demand the entire principal loan plus the uncharged interest till the date of assignment? Typically , ARCs buy loans at a value that is less than even the principal. AAIFR's decisions could be a good guide: funds invested by ARC plus interest thereon at a reasonable rate. Otherwise, it becomes a money-spinning business without much benefit to the economy. - A B TELANG
ET

Regulators mull common standard

To catch tax evaders, Sebi and other regulators are planning to put in place a common reporting standard (CRS) for all financial institutions under their purview to facilitate an automatic exchange of suspicious trades and other information through a global pool. The CRS would also prescribe the standard due diligence ..............

Read | Business Standard

Indian banks make inroads into Myanmar

..........The so-called “look East” policy refers to India’s attempts to build economic relationships with South-East Asian nations. According to bankers, bilateral trade between the countries will rise exponentially once the road project to connect India’s Mizoram with Myanmar and Bangladesh gets operational. Incidentally, the World Bank in June granted a soft loan of $107 million to develop the road project...............

Read - Mint

IFC offer for Bandhan

.............“We have a strategic relationship with Bandhan, which is a key IFC client. We are looking to help them in their transformation into a bank. We hope to support them financially and share our global experience of similar transformations,” ...........

Read - The Telegraph

For the currency markets to breathe freely

................It is obvious that these changes reflect the views of the new man at the helm of the RBI. When Raghuram Rajan took over the reins of the RBI in September, he took a dig at the prevailing mindset on Mint Street by saying, “We cannot create depth by banning position taking or mandating trading based only on well-defined ‘legitimate’ needs.” If only those with these legitimate needs — read hedgers — were allowed into the market, there would be no trading activity at all. In the absence of traders, volumes are hurt and that in turn impacts price discovery. The RBI governor’s distaste for the restrictive attitude of regulators and preference for free markets is evident in............

Read - HBL