...........There are distinct advantages in being first off the block in the pursuit of increasing the gold proportion. There has all along been a strong aversion, both in the government and the Reserve Bank of India (RBI), to enhancing the gold proportion in reserves. It is argued that the present price of gold is too high and that it may well crash. The movements of gold and currencies are not predictable. A 9 per cent gold proportion in reserves leaves the Indian economy vulnerable, if gold prices explode. It would be prudent to gradually raise the proportion of gold to, say, 20 per cent over the next 12-24 months.............
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, October 5, 2012
Banks urged to report suspicious transactions
Banks are expected to submit reports on fraudulent transactions handled at the branches to the Finance Ministry, but most of such incidents go unreported. The financial intelligence unit of the Finance Ministry will impose penalty on banks that do not report fraudulent transactions, said Sanjay Kumar, Additional Director, financial intelligence unit, Finance Ministry. He was addressing a seminar on ‘compliance with Prevention of Money Laundering Act,’ organised by the National Federation of Urban Cooperative Banks and Credit Societies and Kerala Cooperative Urban Banks and Credit Societies, on Wednesday. He said the financial intelligence unit had imposed penalty on some private banks for not complying with the Act. P.N. Nandakumar, AGM, RBI, Thiruvananthapuram, inaugurated the seminar.
The Hindu
More change as Rs 10 note gives way to coin
Tweak laws to allow Islamic banking: RBI
PUDUCHERRY: The Reserve Bank of India (RBI) has written to the government to "restructure" or "amend" the laws to allow Islamic banking in India. Speaking at a local event, RBI Governor D Subbarao said: "Islamic banking is allowed in many parts of the world, but the Banking Regulation Act of India does not conform to Islamic banking because it allows banks to borrow from and deposit money with the RBI on interest. But we are in correspondence with the government on how our laws can be restructured or amended so that they are in conformity with Islamic banking."...........
Also read BS ....... Islamic banking on radar
Subbarao meets Chief Minister
PUDUCHERRY : The Reserve Bank of India (RBI) Governor D. Subbarao met the Chief Minister N. Rangasamy on Wednesday here. It was described as a courtesy call. The Chief Minister brought to his attention the large number of education loan applications pending in Puducherry.
Hindu
Yes Bank, FT to organise 2nd International Banking Summit in Mumbai on Oct 15-16
........Key speakers include Planning Commission Deputy Chairman Montek Singh Ahluwalia, Corporate Affairs Minister M Veerappa Moily, Banque de France first deputy governor Anne Le Lorier, Banco de Mexico deputy governor Manuel Ramos Francia, Reserve Bank of India Deputy Governors K.C. Chakrabarty, Subir Gokarn, H.R. Khan and Anand Sinha, Brookings Institution President Strobe Talbott,........
Surface switch
In November 2010, the government formed a High Level Committee on Financing Infrastructure under the chairmanship of former Reserve Bank of India Deputy Governor Rakesh Mohan. But when the committee’s report was released on Wednesday, it had metamorphosed into the Deepak Parekh committee. What happened? .............
Govt initiates discussions on crucial issues through panels
........The Rakesh Mohan Committee was appointed to suggest measures on financing infrastructure projects. In meantime, Rakesh Mohan resigned from the committee, and HDFC group chairman Deepak Parekh was appointed its head. In its draft report submitted to Prime Minister Manmohan Singh, the panel recommended hike in railway passenger fares as well as electricity, natural gas and port tariffs. ........
Growth in India's net software exports slides to 10-year low
MUMBAI: The higher risk aversion by the Western outsourcing clients has impacted India's software receipts in the 12 months to June 2012. According to the latest trade data from the Reserve Bank of India (RBI), net software exports grew at the slowest rate of 4% in the last 10 years. .......
'Financial laws should be reviewed every 10 years'
........The FSLRC, which released an approach paper on harmonising financial sector laws on Monday, is likely to propose a sunset clause of about 10 years in its final report to be given to the government in March 2013. “From 1934 (when the Reserve Bank of India Act was passed) to 2012, you cannot have the same legislation in the country. Law itself can give a sunset clause. It could be 10 years and after that the law can be reviewed,” FSLRC Chairman Justice B N Srikrishna told reporters on Thursday.........
Don't forget the CAD
.......The RBI is not a single-issue bank, with a laser focus on inflation, as some might want it to be. Nor should it be such, for a certain amount of active, prudent management is essential to maintain macroeconomic stability in an economy as vulnerable as India’s. In this case, it is clear that the current account deficit is at levels that are, while not yet likely to cause a crisis, certainly enough that observers should worry........
'Fiscal deficit important policy input'
........The board meeting held on Thursday also discussed the Kelkar panel recommendations in this regard, he added. “We also reviewed the global and domestic macroeconomic situations. In that connection, we discussed the Kelkar committee recommendations to the central government. That is relevant and important to RBI because what the fiscal deficit is going to be is an important variable in our monetary policy calculation,” .......
Need to bring down inflation further: D Subbarao, RBI Governor
PUDUCHERRY: India's central bank Governor said on Thursday inflation had to be brought down further, signalling the bank would stick to a hawkish stance, and the size of the fiscal deficit would be a key factor in determining monetary policy.............
RBI keeps up hawkish tone, says fiscal deficit key
.........“We must recognise, it was above 10 per cent, it has come down from double-digit level to what is now at 7.5 per cent. So first, we have to acknowledge that inflation has come down, we need to bring it down further,” Subbarao said. “The number of things that are necessary for inflation to come down, we will take into account, as we go into our October 30 policy,” Subbarao said after a central bank board meeting.........
Central bank's position paper on student loans
The Reserve Bank of India (RBI) is to issue a position paper on educational loans. The effort would be to push the education loan schemes in various banks, on the basis of the complaints the central bank had got from various stakeholders, said RBI Governor D Subbarao. The decision was taken in its central board meeting here, based on complaints that some banks were reluctant to do much on education loans, putting up various conditions for issuing these.........
Government should tackle subsidy issue, says RBI
The federal government must tackle subsidies to restore fiscal discipline, Reserve Bank of India Deputy Governor Subir Gokarn said on Wednesday, highlighting tensions between the country’s policymakers amid fears that it could suffer a credit rating downgrade..........
Won't intervene with rupee unless it turns volatile: RBI Governor
The Reserve Bank of India will not 'intervene' to manipulate the rupee now that it is appreciating, apex bank governor D Subbarao said today. "Our policy is to intervene only to tackle volatility, not otherwise," he maintained............
Services sector grows at fastest pace in 7 months
.........Liquidity injections from the Fed and other major central banks have in the past pushed global commodity prices higher and resulted in rising inflation in emerging markets. That could pose a complication for the Reserve Bank of India which, although determined to fight inflation, may find the task difficult. “The RBI has limited room for policy rate cuts given the persistence of inflation, although further progress on fiscal consolidation and structural reforms may eventually pave the way for some easing,” .........
Cabinet OK for Competition Act changes
......."Voluntary mergers will come under the competition Act, involuntary mandated mergers, amalgamations mandated by the RBI in the case of banks mandated by the IRDA in case of insurance companies...We are asking for exemption. It will be in the Act," Chidambaram said. "We will ask for exemption for that category and the power is in the Act to provide for exemption...These are two cases where the Act already provides for involuntary amalgamation........
Havala, politics and the rupee
.........The Reserve Bank of India should act on its commitment to financial inclusion and amend its Master Circular on risk management to permit small to mid-sized companies (with net worth less than Rs 100 crore) to use these products. And if the havala becomes a noticeable smell in the air, the government should, despite its fiscal constraints, reduce the customs duty on gold to prevent the gold smuggling beast from coming back to life.
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