A mixed legacy of India's 22 governors so far, few have had multiple challenges like the departing central bank chief Duvvuri Subbarao. Yet he showed a dignified approach to policy-making at a time when the quality and credibility of institutions are being eroded, says ET...............
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Wednesday, August 21, 2013
India does not look as pessimistic in Washington as in New Delhi: Kaushik Basu
...........Referring to the tenure of Dr D Subbarao as Governor, Dr Basu was all praise for the outgoing RBI chief. He said the position of RBI Governor deserves “dignity, honour & autonomy, which Dr Subbarao upheld”. “Dignity of RBI, autonomy is extremely important. During the tenure of Dr Subbarao it was upheld.” ...................
RBI takes U-turn on tight money policy
In a dramatic U –turn, the Reserve Bank of India (RBI) on Tuesday relaxed its tight money policy adopted a month ago. In a move to comfort the government bond market after a sharp spike in long-end yields, the central bank has decided to infuse liquidity in the market. RBI said it will buy long-dated government bonds worth Rs 8,000 crore through an open market operation on August 23 and thereafter decide on the amount and frequency as warranted........
Be cautious while borrowing overseas, RBI tells infra firms
.............“First and foremost, as finance professionals, we must realise that in efficient markets, cost of borrowing in any currency, when adjusted for exchange rate differential, should be the same. Therefore, if one finds an arbitrage opportunity, it can only be for a short term. “Adjusted for hedge cost, the external borrowing cannot be cheaper. The only way a firm can potentially benefit from borrowing in overseas markets is by gambling on the exchange rate and retaining an un-hedged forex exposure,” said Chakrabarty...........
Fraud reporting is often a matter of perception
In a recent lecture, the RBI Deputy Governor, K. C. Chakrabarty, said over 83 per cent of the cumulative losses of Rs 29,910 crore due to frauds occurred at public sector banks. The data given by the Deputy Governor also show that over 94 frauds involving a sum of over Rs 50 crore each were reported by nationalised banks, including SBI, in the 2009-10 to 2012-13 period. Private sector banks, on the other hand, reported only six such cases and foreign banks, three. Chakraborty attributed this to deficient appraisal system, poor post disbursement supervision and inadequate follow-up. The implication is that private and foreign banks are far ahead in these aspects. The statistics have to be viewed in the context of the environment in which the banks operate..........
Poor project appraisal leading to bad loans
More than 50 per cent of the infrastructure projects are stuck at various stages of implementation due to regulatory hurdles and sector-specific bottlenecks, leading to significant time and cost overruns, said K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, on Tuesday. There has been no dearth of policy pronouncements and re-engineering of processes aimed at improving the investment climate for infrastructural projects, he claimed. However, there seems to be little headway in achievement on the ground, he said. The Deputy Governor said of the 576 Special Economic Zones that have received formal approval, only 172 are operational........
Right to pension cannot be taken away pending proceedings: SC
Observing that gratuity and pension are hard earned benefits of an employee and right to receive pension is in the nature of "property", the Supreme Court has held that this right cannot be taken away from a government employee pending departmental or criminal proceedings. "It is an accepted position that gratuity and pension are not the bounties. An employee earns these benefits by dint of his long, continuous, faithful and un-blemished service. It is thus hard earned benefit which accrues to an employee and is in the nature of "property".........
Baby's day out...........
This report shows the high expectations from Dr Rajan. Otherwise, his arrival at Mint Road a few days earlier (Once the appointment was announced, naturally he would not be in a position to concentrate in his earlier job and it was graceful on the part of GOI and RBI to provide him opportunity to familiarize with the goings on in RBI) would not have made a news. Media ignores vacant top positions in several organizations. This ‘scoop’ reminds one of the camera following the baby in ‘BABY’S DAY OUT’.
- M.G.Warrier
NPS - Time for a review
.........Though the government and the media have been marketing the National Pension Scheme (NPS) as a solution for the social security problems of senior citizens, it is common knowledge that the scheme was introduced through the back door to get over the impossible task of making provisions for an estimated pension liability of Rs 4 lakh crore, when the Sixth Pay Commission was finalising its report in 2006............
‘Fake’ notes declared genuine; migrants let off
...... The inability of the labourers to produce relevant documents for identification raised doubts. However, experts confirmed on Monday that the notes were genuine. The notes were examined by officials of the State Bank of India in Kottayam and later by officials of the Reserve Bank of India in Kochi..........
Coin confusion
The Reserve Bank of India has dispensed with printing and circulation of lower denomination currencies and instead has introduced coins. But the coins of various values are similar and cannot be differentiated. They resemble each other creating a lot of confusion. The RBI may consider minting of coins of different colours, shape and design depending on its value, so that they could be distinguished.
- G. Pichai, Tiruvaiyaru Hindu
Rajan panel mulls doing away with ‘special’ tags for states
NEW DELHI: Putting a spoke in Bihar's ambition to get special status, some members of the committee headed by RBI governor-designate Raghuram Rajan have suggested that the Centre should do away with special and backward category tags, while backing devolution based on the proposed Composite Development Index............
Financial Inclusion in India: An Update
...........The Reserve Bank of India (RBI), which regulates banking and payment services, needs to encourage multiple providers, including telecoms, using fair and competitive regulatory structure to make financial access truly inclusive. Raghuram Rajan, the newly appointed governor of RBI is well aware of challenges and opportunities of financial inclusion in India and is likely to push for reforms that will make financial inclusion a reality in India in the near future.
New Bank Licences - Background and Impact
.......Last year public sector banks recruited 65k staff. This year it may reach more than a lakh with the addition of new banks. The non availability of experienced staff will be a big headache for the newcomers. The banking field will become more competitive. Banks will be forced to come out with innovative ideas suiting the requirements of the general public. Non branch banking will be one of the expected innovations in this field. On line services and door step services will be the order of the day. ..........
RBI's in-principle nod for new banks seen by Q1 of 2014: FM
Reserve Bank of India (RBI) is expected to give 'in-principle' approvals for new banks during the first quarter of the next year, Finance Minister P Chidambaram said. "At the first stage, the applications will be screened by RBI to ensure prima facie eligibility of applicants, including the assessment of 'fit and proper' status of applicants," he said in a written reply to the Lok Sabha on Tuesday.............
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Raise rate of interest
At present the low rate of four per cent interest is being given to the savings bank accounts in the post offices and nationalised banks. The Central government may consider enhancing it the rate of interest to five per cent to the above savings, taking into consideration the welfare of the senior citizens and the public.
- S. Rajamani, Kilvelur Hindu
Service is key, assert customers
When there is a ‘you’ or ‘your’ in the slogan of a bank, you may tend to get carried away. Such words are used to convey a feeling of bonding between the bank and ‘you’, the customer. But the ground realities are often far from this. “It is unfortunate that many banks in India use slogans such as “always with you”, “your bank”, “you in our thoughts” and so on, but never practise the same,” ...........
Take-two of the BC Model
.......Recently, we met with a team of high level banking officials to discuss the workings of the business correspondent model with regards to their bank. Though they admitted that there was previously a very low presence of formal banking in rural areas, a vast improvement in coverage had been observed in the past 2-3 years, backed by a strong push from the Reserve Bank of India (RBI) At the inception of the BC model in 2006, only 6% or 40,000 of India’s 642,000 villages had access to formal banking services. Due to the RBI’s persistent push to increase coverage, today approximately 37.4% or 240,000 villages now have access to formal banking services. In fact, banks are expected to cover all villages with formal banking services in the state of Andhra Pradesh within the next year ...........
Costly Kiddy Bank Accounts
Pester-power may lure you to open an account for your child, but it is expensive and there are hidden risk...........
Tax-efficient fixed maturity plans a good investment option now
In the past few weeks, the fixed income landscape in the country has changed drastically. Following the unprecedented liquidity tightening measures by the RBI in response to the sliding rupee, short-term rates have jumped up sharply. This has increased the attraction for investments in short-term debt instruments, such as the one-year certificates of deposit and commercial paper............
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