CIC: Government employees have an equal stake in good governance

Chief information commissioner says citizens should get proactive about government functioning through the use of RTI. But this should not become a tool to harass officials. Rather, there should be minimum friction between the information seeker and the provider. "Even a government servant spends only 32% of his time at his job and he is an ordinary citizen for the rest of the time. His stake in the ruling government is much lesser than in his citizenship. So it is in his benefit to uphold the Right to Information and improve governance," Shailesh Gandhi, central information commissioner, said today. Mr Gandhi was addressing a seminar on "How to use the Right to Information effectively," hosted by Moneylife Foundation at Ravindra Natya Mandir, in central Mumbai.  The central information commissioner described the history and scope of the Act and outlined the provisions, and even elaborated on the proper format and procedure for citizens to seek information. He explained the functioning and powers of public information officers (PIOs) and deemed PIOs. "The procedure and system should be so smooth that there is minimum friction between the information seeker and the provider," Mr Gandhi said. 

Referring to an observation made by V.S.Das, Executive Director of the Reserve Bank of India, on the needless and voluminous queries that tax an organisation's resources and time, Mr Gandhi said the RTI should not become a tool to harass officials. He also drew attention to the definition of 'public authority' in the Act to point out that cooperative housing societies, unless specified by a government body or funded substantially by the government, cannot be termed as public authorities. However, he argued that public-private partnerships should come under the RTI Act. "A lot of public assets will be shifted to these PPPs soon, so these should be covered by the RTI. Otherwise, it will be like a fraud, when public resources are privatised without anybody's consent," Mr Gandhi said. The central information commissioner also talked about section 4 of the RTI Act, which relates to suo moto dissemination of information by public authorities, which he said is at the heart of the Act. On the matter of exemptions mentioned in the Act, Mr Gandhi gave examples from his personal in this area saying that government deals with any private businesses or parliamentary papers (six months after they are tabled) must not be exempted from the purview of the Act. "A PIO cannot deny information just by saying that the matter is sub judice or that it is personal," he said.  Asked about the proper way to sensitise people about the Right to Information and how to become pro-active in demanding good governance, Mr Gandhi said it requires a combination of lobbying and campaigning to develop a culture of transparency.  On disciplinary penalty for erring PIOs, the central information commissioner said, "Asking for more penalty is not a solution. Lots of corrective measures can be taken by the authorities within the framework of the law available." But he agreed that a time frame must be specified for the second appeal as well.

On the inspection of files under the Act raised by a participant, Mr Das, who is the appellate authority at the RBI, said that in case information was left out of the manuals and other documents, or they are not updated, the people should draw the bank's attention to this. On this matter, SS Mundra, Executive Director, Union Bank, said, "In physical form, most information is available at the offices."  Mr Das said RTI activism has a long way to grow. "Very few applications are received from less developed areas of the country. It we get only two applications from Tripura and four from Assam this year, I think there is a need to educate people on the scope of the Act," he said. Mr Das outlined the RBI's engagement with the Act, how the highly centralised operation had spread out to all its regional offices, and said that the RBI has proactively disclosed a lot of information on its website. "Being the central bank of the country, it is our duty to disseminate information and also protect sensitive data," he said. In six years since the RTI Act was adopted, the RBI has received over 18,000 applications, but only 16% of these have gone for first appeal.  In this respect Mr Mundra added, "There are doubts in the mind of both the provider and the seeker of information. The central information commissioner can dispel these doubts and give us guidelines on how to access and disseminate information." He said Union Bank was committed to organise six seminars on different topics with Moneylife Foundation this year and felt privileged to be a part of this initiative.  This seminar is the latest in a series of discussions on RTI organised by Moneylife Foundation, which have been very popular with alert citizens, activists and civil society workers.

Moneylife

JIMS holds National Seminar on Indian Banking

The objective of this seminar was to identify the emerging trends in this sector while keeping in mind the international perspective, in the context of global financial turbulence. Jagan Institute of Management Studies (JIMS) Group of Institutions, an institute of excellence in the field of management studies and technical education, today organized a National Seminar on “Indian Banking: Robust; Reliable; Resurgent”. Outlining and emphasizing the inspiring story of Indian banking sector that successfully sailed through the financial tornado witnessed by the global as well as the Indian economy a few years ago JIMS, organized the day-long seminar at PHD House in the capital. Present on the occasion were Chief Guest Nagesh Pydah (Chairman & MD, Oriental Bank of Commerce), Guest of Honour, Chandan Sinha (Regional Director, Reserve Bank of India) among others. Multiple technical sessions were organized on issues such as ‘Survival in Turbulent times and Strategy for Risk Management’, ‘Beyond Centralized Core Banking Solutions: Issues and Way Forward’ and entrepreneurial opportunities through working capital loans etc. Speaking on the occasion Dr. J.K. Goyal, Director, JIMS said, “JIMS takes pride in organizing a National Seminar on the robust and resilient Indian banking sector. The objective of this seminar was to identify the emerging trends in this sector while keeping in mind the international perspective, in the context of global financial turbulence. The success story of Indian banking sector could be attributed to the sound policies of our apex bank and fiscal stimulus packages provided by the Government. The experiences shared by the experts here at this platform today are bound to help our students in understanding, at a deeper level, the banking operations and appreciating our banking institutions.” The seminar was well attended by executives from banks, financial institutions, corporate, academicians, research scholars and JIMS’ students.

IIFL 

Sholinganallur taluk yet to get treasury account

CHENNAI: More than 18 months after coming into existence, the Sholinganallur taluk  office on Old Mamallapuram Road (OMR) remains without a bank account where money paid for land transactions, community certificates and other jobs can be deposited. Presently, applicants deposit the required sum at the SBI branch attached to the Tambaram taluk office on GST Road and submit the receipt at Sholinganallur. There is an SBI branch near the Sholinganallur taluk office but the RBI is yet to give its nod for the branch to receive money from the applicants. "The taluk office was opened on December 31, 2009. We gave complaints to officials at all levels of governance including CM's cell on grievances and commissioner of treasuries and accounts," says G Satish of Semmenchery. Most of the applicants are senior citizens and women, who come to get certificates for land patta, birth and death certificates, copies of land records and other documents, are the most affected. The distance between Sholinganallur and West Tambaram is 36km and the two are not directly connected by bus. People have to change two buses to reach Tambaram and walk another two km to the bank. "Delays, either at the taluk office or at the bank, force us to visit the taluk office often. For elderly people like me, it is physically tiring," says K Sarawathi of Perungudi. After a Government Order was issued on December 24, 2009, bifurcating Sholinganallur and Alandur taluks from Tambaram, the taluk office at Sholinganallur began functioning on December 31, 2009. Since then, however, it has not got proper administrative and infrastructure facilities. Officials say they have taken up the issue with the government many times. "The government has also written to the RBI for its nod to allow the SBI branch at Sholinganallur to receive amount from people coming to the taluk office but nothing has been done."

TOI

Threshold level for inflation is 4-6%, says RBI

The Reserve Bank of India (RBI) said on Saturday if inflation stayed beyond the threshold level of four-six per cent, it could hurt economic growth in the medium term. “The Reserve Bank’s current assessment suggests that the threshold level of inflation for India is in the range of four-six per cent. If inflation persists beyond this level, it could lower economic growth over the medium term. These costs, therefore, necessitate monetary policy response to control inflation,” Deepak Mohanty, Executive Director, RBI, said in a speech at the Indian Institute of Technology, Guwahati. With high global commodity prices likely to stay firm, the threat to price stability from global inflation continues to persist. Mohanty said the stance of the central bank was to bring down medium-term inflation to three per cent, which was consistent with the country’s integration with the global economy. “In this direction, monetary policy aims to contain perceptions of inflation in the range of 4-4.5 per cent, with a particular focus on the behaviour of the non-food manufacturing component,” he said, setting aside the theory of high inflation seen as ‘new normal’. India’s headline inflation has stayed much above RBI’s comfort zone for more than a year now, despite policy tightening measures. RBI has hiked the key policy rates by 11 times since March 2010. The central bank’s inflation management became more challenging, as supply side factors stoked food inflation. As Mohanty pointed out, inflation remained high on account of high food prices, rising rural incomes, high global commodity prices and increase in administered fuel prices. “Inflation has remained elevated and persistent over 18 months now. The inflation path was influenced by a number of domestic and international supply shocks.” He emphasised monetary policy recognised that over the long-run, high inflation was inimical to sustained growth, as it slowed investment by creating uncertainty which posed significant risks to future growth. “It was indicated by the Reserve Bank that bringing down inflation, given its generalised nature, even at the cost of some growth in the short-run, should take precedence,” he added.

BS

Reducing food inflation will take time: Pranab

Conceding that double-digit food inflation is worrisome, union finance minister Pranab Mukherjee on Saturday said the monetary policies of the Reserve Bank of India (RBI) will take some time to have an impact. "The double-digit food inflation is a matter of concern. There is a seasonal factor, but apart from the seasonal factor, there are supply constraints in some critical agricultural products which we have to remove," Mukherjee told reporters in Kolkata.  Stating that so far as the demand side was concerned, the monetary policies adopted by the RBI will take some time to have their impact, he said: "It will take some time to have full impact on the demand management. "In short and medium term, we are trying to improve the supply constraint so that the moderating influence of the inflation is felt in the coming weeks," he added. Food inflation was recorded at 10.05% for the week ended Aug 20, as onion, fruits, vegetables and protein-based items turned more expensive.

HT

How much is too much? Legal experts debate new bank norms

However, the question is are the restrictions threatening to make a Frankenstein out of RBI or is RBI opening a Pandora’s Box and the sector will be impacted uncontrollably?

Read...... 

‘Business confidence levels have dipped' - Industry bodies want RBI to cut interest rates

Major industry bodies have come out with reports indicating a decline in business confidence levels and have called upon the Reserve Bank of India (RBI) to cut interest rates to boost sagging industry. The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) have in their separate reports expressed concern over the global economic downturn and the U.S. fiscal position and the European debt overhang which in addition to the domestic factors were generating uncertainty about the economic outlook. The FICCI business confidence index (BCI) was at the lowest level in the last two years, while the CII quarterly BCI showed a decline by 8.9 points. Both the exercises were carried out in August. The CII, however, said expectations for the second quarter indicated a modest recovery, while FICCI forecast a further slowdown in gross domestic product (GDP) growth rate during the third and fourth quarters based on U.S. and India GDP growth correlation. Both CII and FICCI seemed to agree on the GDP growth rate for the current fiscal. The former expects it to be in the range of 7.5-8 per cent while FICCI puts it at 7.9 per cent. According to CII, most firms do not plan to increase investment plans and FICCI maintained that corporates saw a significant downward pressure on profit margins, affected by high interest rates and input prices. The CII held high interest rate and high raw material cost as the two top business concerns and FICCI pointed to the 11 times increase in interest rate by the RBI and said the tightening monetary policy had resulted in sharp slowdown in industrial growth and had also impacted consumer demand. FICCI suggested a cut in interest rate to boost corporate confidence including those of exporters who had taken a hit as well. According to the CII, other factors of concern to the business community are global economic and political instability and institutional shortages.

HBL

New banking guidebook: What does it mean to the industry?

Watch the video..........

RBI for doing away with subsidised credit for farm sector

Pune The Reserve Bank today made a case for doing away with subsidised credit for the agriculture sector, saying timely availability of funds is more important. "Pricing of credit needs to be market-based to ensure effective flow of credit to all sections of the agricultural community," RBI Deputy Governor K C Chakrabarty said at the National Seminar on Productivity in Indian Agriculture here. "Emphasis has to shift from subsidised credit to timely and adequate credit at reasonable cost especially where credit delivery system is very weak and complex," he suggested. The Government of India provides 2 per cent subsidy on the short-term crop loan. The short-term crop loan is available to farmers at 7 per cent. It is also important to carefully monitor the usage of credit right from the input to the output stage so as to ensure proper utilisation, he said, adding, monitoring of credit should not only be limited to crops but also to related activities that are funded by financial institutions like NABARD. He also suggested that the delivery of credit by co-operative sector need to be improved and NABARD should play a key role in converging credit services with other requirements that support agriculture and allied activities, including updating the farmers which help in facilitating completion of production cycles and ultimate value creation. Although, he said, schemes such as Kisan Credit Cards have helped in improving credit linkage to farmers but we need to urgently look into ways to increase the supply of agricultural credit especially to small and marginal farmers. There is a need also a need to strengthen micro-insurance, particularly for small farmers to adequately weather vagaries of nature, which affect these farmers more adversely, he said.  

ExpressIndia

NRB urges RBI to purchase its US$ reserves for IC

KATHMANDU  -  Nepal Rastra Bank (NRB) has urged its Indian counterpart—the Reserve Bank of India (RBI)—to open its window for purchasing Nepal’s US dollar reserves in exchange of Indian currency. Currently, the Nepali central bank sells its US dollars to Indian commercial banks to get IC. If RBI opens the window, NRB can sell its dollars to the Indian central bank in case it is unable to find better exchange rate in the Indian market. “If RBI’s rate is better than that of the market, we can get IC from RBI which will be beneficial for the country,” said a senior NRB official. NRB had proposed the Indian central bank formally in this regard a month ago when Nepali officials visited the Indian central bank. “We also proposed the same during RBI governor D Subbarao’s recent Nepal visit,” said the official. Nepal has increasingly been purchasing IC in recent years due to huge trade deficit with India. As of the first 11 months of last fiscal year, Nepal’s trade deficit with India stands at Rs 200.87 billion, up by 26.2 percent compared to the same period in the previous year.  Not only has the trade deficit, Nepal’s trade dependence on India also risen to 66.9 percent as of the first 11 months of 2010-11 compared to 56 percent a year ago.  According to officials, NRB usually purchases IC twice a month by selling $20 million each time. “Lately, we are purchasing IC three to four times a month,” the official said. That’s why Nepal’s IC reserve has also increased to IRs 31 billion as of Aug 13 from the usual reserve of Rs 20-25 billion, according to officials. As of the first 11 months of the last fiscal year, NRB purchased IC worth IRs 111.31 billion by selling $2.46 billion. The central bank had purchased IRs 102.09 billion by selling $2.19 billion in the same period a year ago.

The Kathmandu Post

Inflation a serious problem, says Montek

New Delhi : The Planning Commission today termed the current inflationary situation in the country as a “serious problem” but exuded confidence it will improve by the end of the year. “Inflation is a serious problem. We need to worry about that... inflation, as of now, cannot be said to be under control,” the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, told reporters on the sidelines of a CII event. His comments came a day after food inflation entered the double-digit zone after a gap of over five months. Meanwhile, headline inflation, which also factors in manufactured items and fuel products, has been above the per cent mark since December 2010. Mr Ahluwalia, however, said high inflation is a global phenomenon. “Everywhere in the world inflation is higher...,” he said. Asked about his views on the likely trajectory of inflation in India, he said: “I am not predicting but I hope that by the end of the year it will be lower.”  He said the price situation is being constantly monitored. “That (inflation) is not the Planning Commission’s immediate concern. We look at it in the medium term... I am sure both the RBI and the Finance Ministry are doing what is necessary,” Mr Ahluwalia said. The Planning Commission Deputy Chairman also said that the country’s economic growth this fiscal would be around 8 per cent, lower than the 8.5 per cent achieved in 2010-11. “Growth (in 2011-12) will be 8 per cent... It is quite clear that we are cyclically seeing a slowdown compared to last year...,” he said. He further added: “Growth in India is going to be lower than in the last year but that is also true of the rest of the world. If India grows at 8 per cent in the current year, it will be the second fastest of any country in the world“. Mr Ahluwalia has in recent days maintained that economic growth this fiscal will not be more than 8 per cent, lower than government’s projection of around 8.5 per cent.

HBL

A Profile of Banks 2010-11

The Reserve Bank of India has, today, placed on its website A Profile of Banks 2010-11 . The publication, being seventh volume in the series, provides bank-wise and bank group-wise information on important performance indicators of all scheduled commercial banks, excluding regional rural banks, for the period 2006-07 to 2010-11. The publication covers about 18 important indicators, including return on assets, capital adequacy ratio (CRAR), business per employee, and profit per employee. To facilitate comparison, the publication also provides aggregates at bank groups and all banks level for 2010-11.

Highlights

·         Business per employee across the bank groups increased during 2010-11 over 2009-10, except for new private sector banks.

·         Profit per employee across the bank groups increased during 2010-11 over 2009-10, except for State Bank of India and its associates.

·         At all banks’ level, employees' productivity show improvement in terms of both business per employee and profit per employee; these two indicators have been increasing since 2006-07.

·         Profitability in terms of return on assets of all scheduled commercial banks at aggregate level improved during 2010-11. At bank group level, all the bank groups witnessed an increase in return on assets during 2010-11, except State Bank of India and its associates, which witnessed decline in return on assets.

·         CRAR of all banks at aggregate level declined during 2010-11.

·         Net NPA ratio of all scheduled commercial banks at aggregate level declined during 2010-11.

Copies of the publication can be obtained from the Director, Division of Reports and Knowledge Dissemination (Sales Section), Department of Economic and Policy Research, Reserve Bank of India, Amar Building, Ground Floor, P. M. Road, P. B. No.1036, Fort, Mumbai - 400 001. This publication is also available at the Reserve Bank's website on the Internet at ( www.rbi.org.in ).

Moneycontrol 

‘Our panel seeks to resolve problem of expenditure classification'

....If inflation shows signs of declining, it may be appropriate for the RBI to reverse the trend. But if it does not, I think the present stance will continue......

Read..............

Why NBFCs should not be treated as banks?

What's in a name? A lot, if you are a non-banking finance company (NBFC). For one, though, you are virtually a bank, at least as far as the assets side of your balance-sheet is concerned, you play by a different set of rules compared to banks.

Read........ 

Salman Khan is like Reserve Bank of India

Mumbai: Salman Khan is like Reserve Bank of India. He creates money for him and his industry the way Reserve Bank of India mints money for the nation. RBI is bankers bank that delivers money or cash to all the banks. The same way Sallu Bhai delivers hit after hit, this giving hope to the industry. Irrespective of the economic slowdown or the best time for economy, the maverick bhai of the filmdom always comes with one surprise after the other, bringing smiles back on parched lips.

http://nvonews.com/2011/09/03/salman-khans-bodyguard-box-office-report-suggests-a-huge-hit-in-the-making/

RBI’s Tough Guidelines

This refers to the edit 'Cautious Opening' (ET, Aug 31). The RBI's new draft guidelines for the issue of fresh banking licences have defined some strict parameters. But the best among them is the stipulation to ensure 25% branches in rural India. But chances are that very few new banks will be ready to meet this particular criterion. In such a scenario, how the central bank will pick and choose new banks would be interesting to watch.

BAL GOVIND, Noida (ET)

RBI guidelines

1.  This refers to “Raising the bar” (editorial, Sept. 1) on the set of “draft” guidelines issued by the Reserve Bank of India permitting the entry of new private banks. It is quite paradoxical that our policymakers cry from the rooftops for merger of public sector banks while simultaneously opening the gates to more private banks. The disastrous collapse of the much talked-about private banks is a matter of the immediate past that demands a serious study and reversal of wrong policies. The government has done precious little on rural credit despite the shocking number of farmers' suicides. The record of private banks in this area is well known. Further, the draft guidelines pose a threat to hard-earned savings in these new banks, enabling take over by foreign capital after five years of inception. The issues raised by employees of nationalised banks must be taken note of.

S.V. Venugopalan, Chennai

2. Further to the Finance Minister's budget speech in March 2010, the modified policy on the opening of new branches by promoters and corporate bodies has assumed importance. The recent RBI amendments issuing licences for opening new branches have taken a pragmatic view towards enhancing the Indian economy. The banking sector can now reach remote corners of the country.

K.V. Balachandran,Chennai (HBL)

In RBI's interest

“The slowdown has arrived” (Business Line, September 1) made interesting reading. Today's inflation numbers clearly indicate that the RBI should not relax its inflation watch and continue its hawkish stance. Why are real estate prices so high? If prices are reduced, will not demand pick up? Automakers have not indicated a major decline in sales. In fact, there have been increases in certain cases. Why the cry for low interest rates?  The RBI has resisted pressure from interest groups to reduce interest rates. Kudos to the RBI to sticking to its dharma of inflation control! As the RBI governor rightly stated, economists should be people-oriented.  Given the present difficulties in sourcing External Commercial Borrowings (ECBs), corporates should prepare for much tighter liquidity and higher interest rates.

Srinivas (HBL)

What are the PMO, the RBI, and the finance ministry smoking? - Surjit S Bhalla

Dr Subbarao, the governor of the Reserve Bank of India, has outlined five principles for policymaking. How does he, and his ultra-hawkish monetary policy, stack up against his own principles? Let us find out.

The first principle is that “people matter”. Presumably that means that both growth and inflation matters: the latter because it hurts purchasing power, and the former because it hurts jobs. Inflation has been stuck at a high level of 8 to 10 per cent for the last six months, and that is both good news and bad news. Good that it hasn’t increased, and bad that it is too high.

On growth, the RBI’s record is not only not good, it is plain bad. Industrial growth has crawled to the slowest pace in the last 10 years (excepting the global recession months between September 2009 and October 2010), and growth in construction, where jobs and income and people really matter, has come to a standstill. According to the latest GDP data, year-on-year construction growth was just 1.2 per cent.

Second principle: when economists build models, they should fit it to the real world, and not the “real world to the models.” What reality has the RBI targeted? It alone, in the entire policy making world, utilises a monetarist model to tackle inflation. Worse, it alone uses the WPI as an indicator of inflation. If the US were to use this indicator, then it would presently show inflation at a 6 per cent annualised rate versus the 9 per cent observed in India. Given that developing countries have a 2 to 3 per cent higher inflation rate than developed countries, it does not seem that Indian inflation is that much out of line. So maybe the good doctor can tell us about whether he is living in a model world of virtual monetarism?

Third — fourth and fifth and sixth? — principles: “Economic policymaking is more than a straight application of textbook knowledge; you need to apply judgment, avoid groupthink and have a sense of history.”

History and Judgment: Subbarao’s RBI increased the repo rate by 125 basis points from 6.75 per cent to 8 per cent in the space of just 3 months. This is the second fastest increase in history, nearly matching the gallop from 8 to 9 per cent in June-July 2008. In an eerie repeat of history, at the time Dr Reddy instituted the record hikes, industrial production growth had slowed to a near zero per cent rate in August 2008, actually 1.9 per cent. According to the new IIP index, August 2008 witnessed a low growth rate of 5.4 per cent; in both April and May 2011, IIP growth was a low 5.8 per cent.

The history lesson continues. In 2008, just two months after the record hikes, and level, of the repo rate, the world economy entered a big-time slide. In 2011, at the time of Subbarao’s BMW speed hikes, the world economy is also in trouble. There was serious talk of a Euro, and European, crash. No one is raising rates anymore, and just a few days back, Brazil has actually reduced the repo rate notwithstanding the fact that inflation in Brazil is some 2 to 3 per centage points higher than the Brazilian “target” or “comfort” level.

Groupthink: RBI’s hawkishness, and policy, has been nose-led by the groupthink of several domestic journalists and many investment bank economists. The argument by these scholars has been repetitive and grossly misleading. Unlike what their peers do in other countries, these scholars have failed to note the decline in the more accurate CPI inflation (from a level of 16.5 per cent in January 2010, to a flattish 9 per cent for the last 1 year) and the fact that commodity prices are a major determinant of WPI inflation — and that the trend in international commodity prices is something they, or the RBI, can do precious little about. To reiterate, even in the very low-inflation US economy, wholesale or producer prices are up a hefty 6 per cent. Indeed, non-groupthink would dictate that Dr Subbarao take the lead of his counterpart in Brazil.

Textbook knowledge: In the non-application of text book knowledge, the RBI has made a grievous mistake, and with slowing growth, grievously is India paying for it. In recent months, the RBI has constantly been mentioning one price as a major contributor to India’s high inflation: the absolute price increases set by manufacturers of non-food items. It calls it “pricing power”. According to the RBI, this pricing power is indicated not by an increase in relative prices, but by an increase in absolute prices!

If input costs go up by 10 per cent and output prices by 5 per cent, the RBI would have us believe that there is pricing power on the part of the firm when in reality (assuming productivity and technological change to be zero) the firm is going out of business. Textbook economics would say that pricing power means at least an increase in the price of output relative to the price of inputs. According to the latest GDP data, manufacturing inflation (output prices) has stayed steady at 5.5 per cent since Jan-March 2010; the GDP deflator (input prices) has averaged close to 10 per cent. In the good overall inflation years of 2004 to 2007, inflation in the manufacturing sector averaged a higher 6.1 per cent, and GDP deflator inflation averaged a lower 4.7 per cent. One did not hear of the possibility of pricing power then.

It should be mentioned, or at least noted, that in 2008 there were strong rumours of the PMO and/or the finance ministry, dictating to Dr Reddy the July 2008 rate hike of 50 basis points. Most likely, this occurred because of a traditional misunderstanding, and panic, in these quarters about the political impact of inflation and its determinants. Something similar may have happened in the last two rate hikes of Subbarao. If that is the case, it does not say much about the “independence” of the RBI. And if that is the case, then the ban on smoking applies equally to the three sets of policymakers, and their staff, and their advisers!

The author is chairman of Oxus Investments, an emerging market advisory and fund management firm (IE)

S K Jain joins Union Bank as ED

Union Bank of India today said Suresh Kumar Jain has joined the bank as Executive Director. Jain, who joins the bank from Bank of India where he served as a General Manager, replaces S C Kalia who retired from service, a release issued by the bank said here. Having spent over 33 years in the banking sector, Jain has worked in various capacities in the country and abroad with specialisation in credit and foreign exchange, the release added.

MSN News