Subbarao, take a bow

Let us salute Governor Subbarao

............How will history assess Governor Subbarao’s era? A dispassionate account will surely appreciate the valiant role of Governor Subbarao in keeping the ship on an even keel. He has heroically led the RBI with maturity and judgment, despite being aware that he would be pilloried by the government and others who survive on government patronage. Subbarao can take comfort in the fact that, at some point of time, each of his predecessors in the past thirty years has been vilified, only to be recognised that they were the saviours. Notwithstanding all the attacks on Subbarao — overt and covert — he can close his stint in the RBI with great satisfaction and a clear conscience..................

Read - HBL

RBI History Mirrors 1991 Crisis and Reforms

The Reserve Bank of India and the Academic Foundation deserve the readers' thanks for bringing out the latest volume of RBI History in two volumes. The earlier histories were fat and unwieldy single tomes. The RBI is one of the few central banks to have documented its institutional history. The book under review is the fourth volume of the History of RBI and relates to the 16- year period 1981- 1997. During this period RBI had six Governors for different terms -- Dr I G Patel, Dr Manmohan Singh, A Ghosh, R N Malhotra, S Venkitaramanan and Dr C Rangarajan.......

Read - FPJ - 

Book review by P.P.Ramachandran

Fourth volume of the history of the Reserve Bank of India

..........This volume is more than a mere narrative of the history of the Reserve Bank; it also provides valuable insights into India's economic development and policy during an eventful and significant period...........

 ..........This volume of history takes us through the difficult times when the Reserve Bank and the Government had to contend with unprecedented strains on the external payments situation......

........The comprehensive economic reforms, mostly home-grown, that were launched in 1991, with support from multilateral institutions and implemented in a gradual and cautious manner enabled India to gain international credibility.............

Read.........

Manohar Parrikar meets RBI dy governor in Mumbai

........In a meeting in Mumbai on Wednesday evening between a Goa delegation led by chief minister Manohar Parrikar and a team of RBI officials headed by RBI deputy governor Anand Sinha, the RBI asked Goa to schedule the SLBC meeting either in late August or early September. The RBI will send their representative for the meeting and once detailed submissions by the government and bankers are made to the RBI, it will examine the matter.......

Read - TOI

For a change, visit Udupi’s numismatics museum

............Nearly 1,800 coins from 400 B.C. to the present times are on display at Corporation Bank. Coins in materials such as gold, silver, copper, lead, nickel and steel are on display. There is explanation in English besides all the coins. “We will soon provide explanation of coins in Kannada on each exhibit stand,”..........

Read - The Hindu

RBI receives proposal for Rupee-Saraswat merger

The Reserve Bank of India has received a proposal for merger of Rupee Cooperative Bank and Saraswat Cooperative Bank from the latter two days ago. It is likely that the RBI would give its nod for the merger in a fortnight after which the actual process would start which is expected to take two to three months............

Read - DNA

Most transactions still done through cash, cheques

.........According to a vision document by the RBI, developing accessibility, availability, affordability and assurance among other things are needed. In addition, simplifying documentation requirements, increasing role of non-banks in the payment systems, innovation and competition, uniformity, addressing risks could facilitate more usage of the electronic mode of fund transfer...................

Read - HBL

Appraisal standards of nationalised banks responsible for steep rise in NPAs, says Chakrabarty

....“There is enough evidence to suggest that a substantial portion of the rise in impaired assets in the sector is attributable to non-adherence to the basic appraisal standards by the banks,” said Dr KC Chakrabarty, deputy governor, RBI, while speaking at a conclave organised by SBI Capital markets..............

Read - Moneylife

HC allowing plea challenging directors’ appointment will cut into RBI powers: Yes Bank

Mumbai: If the Bombay high court allows the Madhu Kapur group to challenge the appointment of directors on the Yes Bank Ltd board, “it will cut into the powers of the Reserve Bank of India (RBI)”, the lender said on Thursday. “RBI does not say it will decide (on appointment of new directors). It gives the powers to the board to decide. Once the board decides, unless you say that the board is bad and has to be replaced...(you cannot change)..............

Read - Mint

Rajan's genuine concern

My View on "Rajan wants definitive shape to bank licence by January": 

It is refreshingly comforting to see that an executive who is still with GOI has started getting seriously concerned about the goings on in an institution which he will be heading a fortnight later. The need to ensure continuity at the top in RBI is surfacing time and again. Now Dr Rajan also has admitted this by expressing the view that ‘some definitive steps’ on new bank licences should be taken before Deputy Governor Sinha demits office on January 18, 2014.  His concern is genuine, as the other person who was responsible for initiating the process necessary for issue of fresh bank licences, Dr Subbarao, would have already moved out, once he takes charge. The environment in which Dr Rajan and his ‘new team’ will have to decide on 5 to 10 ‘in-principle approvals’ from the 26 aspirants has been made more complicated by the time-frame (first quarter of 2014) already announced by the Finance Minister in Lok Sabha and the announcement of ‘All Women’s Bank’ as also an application from Postal Department. FM cannot be blamed, as his anxiety to have something ‘tangible’ before the elections are announced is understandable. One wishes, banking was considered as another business or vocation and individuals or organizations(including corporates) were allowed to enter subject to potential for business and viability of the individual projects, in a well-regulated environment. 

- M G Warrier, Mumbai

Forex crisis - A.Seshan

........But what has happened in the last few days that led to the current crisis? The market knows that the Reserve Bank of India (RBI) cannot make any effective intervention since its reserves are equal to just a few days' turnover. Of the total turnover, about one-fourth only are accounted for by real transactions. ................

Read | Business Standard

When umpires turn players

.............. But this unimaginable news of today may soon become a reality tomorrow. Well, if not in the case of the RBI, at least of a few other central banks. Indeed, it is already a reality in the advanced world of finance that has set the model for the rest in the last two decades. Shocked? Read on...............

Read - HBL

Coming days will be more tough...........

My View on  "Losing credibility": 

Very true. Restoring credibility is an uphill task. RBI has been functioning in an uneasy environment for some time now mainly because FM and some officials in his ministry have been asserting GOI’s ownership rights on the central bank. RBI’s work culture and the maturity shown by the RBI Governor and his team, in a way, avoided an open clash in the recent period. The coming days will be more tough from the relationship angle for Mint Road and North Block, as the new RBI Governor has not been through the ‘IAS’ diplomatic experience. 

- M G Warrier

RBI's FY13 income grows by 39.8%

The Reserve Bank of India’s (RBI’s) gross income by 39.8% to Rs 74,358 crore for year ended June 2013 from Rs 53,176 crore in Fy12 on sharp increase in earnings from domestic assets. The revenues from domestic sources rose by 60.7% from Rs 33,366 crore in Fy12 to Rs 53,611 crore in Fy13. And, foreign operations saw mere 4.7% growth at Rs 20,746 crore in 2012-13 from from Rs 19,810 crore in 2011-12. ...........

Read | Business Standard

Good monsoon will help growth, RBI says in annual report

The Reserve Bank of India (RBI) on Thursday said growth prospects are looking better for the Indian economy in the current fiscal year on a good monsoon and steps by the government to revive domestic investment. It is also important to reduce high consumer prices to revive demand, said RBI, in its annual report, released on Thursday. It added that monsoon rainfall this year bodes well for both the kharif and rabi crops, and power generation..........

Read - Mint

Explore new avenues for revenue, RBI tells govt

The Reserve Bank of India (RBI) warned on Thursday that the government may find it difficult to stick to its fiscal deficit target in the current fiscal year, given the impact of the economic downturn on tax collection and the depreciation of the rupee on the import bill, and called for alternative sources of revenue to be tapped. RBI suggested strategic planning, including larger dividend payouts by cash-rich public sector units and stake sales in state-run companies that are likely to receive investor interest and attract higher prices...........

Read - Mint

RBI Comes to the Table on Food Bill, says it’ll Eat into Finances

RBI has weighed in on the ongoing debate on the viability of the proposed Food Security Bill, warning the government would find it difficult to contain spending on the proposal within the budgeted amount even in 2013-14. Further, the central bank, which released its annual report on Thursday, also asserted that the rise in the quantum of subsidies would hamper investments.........

Read - ET

RBI increases size of war chest

MUMBAI: Reserve Bank of India (RBI) appears to have had an inkling of the volatility in the foreign exchange markets that was to follow later during the year. In its balance sheet for the year 2012-13, RBI  has increased the size of the war chest that it has built up for times of volatility in the financial markets.......

Read - TOI

RBI sounds caution on ballooning bank debt to infra sector

The Reserve Bank of India has called for sorting out infrastructure issues as they have potential to adversely affect asset quality of banks. Stress is building up in the infrastructure segment, the RBI said in its annual report released today. Outstanding bank credit to the infrastructure sector, which stood at Rs 7,243 crore in 1999-2000, has jumped over 100 times to Rs 786,045 crore in 2012-13..............

Read - HBL

Reserve Bank study sees red in currency futures trades

Currency futures trading in the domestic market and a foreign exchange derivative instrument traded overseas may be partly responsible for the volatility in the rupee and the currency plumbing new depths over the last few days. This was suggested by two studies in the Reserve Bank of India’s Annual Report..........

Read - HBL