Data released on Thursday showed prices of essential commodities like cereals went up by 12.7 per cent, rice by 11.75 per cent, wheat 12.6 per cent and pulses rose by 42 per cent.
Except for the change in the inset letter, the design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series -- 2005, with additional or new security features issued on October 21,2005.
RBI governor D Subbarao, in the second quarterly review of the monetary policy in October, had said there is need to increase provisioning against bad assets to not less than 70 per cent by September 2010.
The finance minister said Prime Minister Manmohan Singh on Tuesday reviewed the financial situation with particular reference to the liquidity position at a meeting with the RBI Governor, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia and senior officials of the ministry.
Warning that the worst may not be over yet, Reserve Bank Governor D Subbarao has said the global economic recession may not only continue through 2009 but could prolong to the next year as well.
RBI Governor D Subbarao explains the rationale for the moves announced in the second quarter review of the monetary policy in an interview with Sidhartha. Excerpts:
While making it clear he will continue with the strategy followed by RBI so far on inflation and exchange rate management, RBI Governor D Subbarao said, "We will be monitoring the situation closely and continuously, be mindful of implications of our monetary stance on the growth prospects and take action as appropriate." He added, "I am not sure whether we can say inflation is softening consistently, but the decline in the Wholesale Price Index is satisfying."
In addition, bankers also told Business Standard that they did not expect the central bank to hike policy rates or the cash reserve ratio in the third quarter review scheduled for October 27 as inflation was not rising fast though inflationary expectations were there.
The Reserve Bank is in touch with various banks to understand why lending rates are not coming down despite the central bank cutting policy rates, even as the bankers expressed inability to lower the rates when bond yields remain high.
Punjab National Bank Chairman and Managing Director K C Chakraborty has emerged as the frontrunner for the post of the fourth deputy governor of the Reserve Bank of India (RBI).
The Reserve Bank of India Governor D Subbarao has exhorted the apex bank's staff in his New Year message to convert present crisis into an opportunity, while maintaining that the crisis will be deeper and prolonged.
The panel shortlisted bank chairmen who have headed an entity for at least two years and were less than 60 years of age when the vacancy arose. The list will now be narrowed down to three candidates who will be recommended to the appointments committee of the cabinet headed by Prime Minister Manmohan Singh. Their consent will be sought before sending the list to the ACC.
A selection committee, headed by Reserve Bank of India (RBI) Governor D Subbarao, is scheduled to meet next week to shortlist candidates for the post of the deputy governor of the central bank.
The government is planning to divest its residual 26.12 per cent equity in the Tata-owned Videsh Sanchar Nigam Ltd, now called Tata Communications. It is unlikely, however, that the government will decide to sell its entire residual stake in the stock market before it resolves the issue of the surplus land of around 773 acres that was kept outside the disinvestment process.
The rate cuts are expected to infuse Rs 80,000 crore into the banking system.
Reserve Bank of India Governor D Subbarao describes his first 50 days on Mint Road as 'tough'. He spoke to Business Standard after his first monetary policy statement.
The RBI's assessment of the economy, presented as a prelude to the policy announcement, was relatively downbeat. Conceding the persistence of a hostile global environment and domestic weakness, the RBI expects GDP growth during 2009-10 to be 6 per cent. This is slightly higher than the 5.7 per cent that reflects the median of its external forecasters' survey.
RBI Governor D Subbarao aims to revive growth by increasing the flow of credit through reduction in policy rates. By reducing the repo rate by another 25 basis points, he is hinting at a further reduction in interest rates. And, through the 25 bps cut in reverse repo rate, he is trying to make it less remunerative for banks to park surplus liquidity with the central bank and instead prodding them to lend more to the productive sectors.
In the light of credit offtake not picking up despite ample liquidity in the system, the RBI is likely to keep policy rates unchanged in its annual monetary policy, to be unveiled on Tuesday, but may impress upon banks to step up lending to sectors slowing down.
Reserve Bank Governor D Subbarao on Thursday said the next fiscal is going to be more challenging than the current fiscal as the moderation in India's economic growth is likely to be worse than expected earlier.
Former Reserve Bank of India governor Yaga Venugopal Reddy said he would have preferred a tighter monetary policy as managing inflation and inflationary expectations were crucial to keep the economy growing.
The wholesale price index, coming below four per cent, may prompt the Reserve Bank of India to cut key policy rates. An indication was made by the RBI Governor D Subbarao in Tokyo on Wednesday. During the week, prices of manufactured items such as sugar, imported edible oil and textile items such as cotton yarn got cheaper.
Telecom Secretary DS Mathur has told the finance ministry that a change in the entry fee that operators must pay for a telecom licence cannot be considered since the matter was approved by the Cabinet in October 2003. The letter, written late last month, was in response to a letter by Finance Secretary D Subbarao, who had requested the department of telecommunications to "stay" the issue of new licences and those for cross-over technology (from CDMA to GSM services).
In view of the need to enhance credit delivery to the employment- intensive micro and small enterprises sector, it has been decided to provide refinance of an amount of Rs 7,000 crore (Rs 70 billion) to the Small Industries Development Bank of India under the provisions of Section 17(4H) of the Reserve Bank of India Act, 1934.
Home and auto loans are likely to become more cheaper with several PSU banks promising to revise their lending rates if RBI eases its monetary policy on Saturday.
Rajan's first few measures include swap window facility for banks to lure in NRI funds.
Terror attacks in Mumbai will impact capital flows in the short term, ICICI Bank managing director and chief executive officer K V Kamath said in Mumbai.
FM P Chidambaram is expected to address the IMF-WB's spring meeting on April 12 & 13 that is likely to be dominated by the impact of US recession, global inflation & consequent credit crunch leading to global economic slowdown. He is expected to take up India's concerns of rising global food & commodity prices, besides spiraling crude oil prices in the backdrop of domestic inflation, which has touched a 3-year high of 75%. India will take up hike in assistance issue with WB.
India's growth story will continue despite a slight deceleration, but there will be no recession as in some advanced economies, Reserve Bank of India Governor D Subbarao said on Saturday. Pegging GDP growth for FY'09 at 7.5-8 per cent, he said, this was 'our best growth estimate', even though there were other estimates ranging from 7.2-8.7 per cent.
The Reserve Bank may give up its opposition to the proposal of a monthly compilation and release of inflation data, with D Subbarao moving to the central bank from the finance ministry, which was open to the idea of a shift in the time table of the Wholesale Price Index.
The central bank can directly print money and finance the government, but it should avoid doing so unless there is absolutely no alternative, former RBI governor D Subbarao on Wednesday said while pointing out that India is 'nowhere' near such a scenario. In an interview with PTI, Subbarao suggested that to deal with the second wave of COVID-19 induced slowdown in the economy, the government can consider Covid bonds as an option to raise borrowing, not in addition to budgeted borrowing, but as a part of that.
To compensate exporters hit hard by the over 10 per cent Rupee appreciation, the government on Thursday announced a Rs 1,400 crore (Rs 14 billion) package, including increased rates of tax refunds.
The move will to a large extent speed up the monetary transmission process--which is banks passing on the rate cuts that the Reserve Bank announces to their borrowers without much delays--something that has been missing all these while and something that the RBI has been unhappy with.
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Subbarao was appointed as the central bank chief on September 5, 2008 for three years and was later given an extension for another two years.
According to fund managers, expectations of a 25-basis-point increase in the cash reserve ratio of banks have heightened in the wake of RBI's surprise twin moves to make short-term money dearer as part of its attempts to curb the rupee's volatility.
Bringing their differences into open, outgoing RBI Governor D Subbarao took a dig at Finance Minister P Chidambaram for his comment once that he would "walk alone" to ensure growth in the face of tight money policy of the central bank.
Weighed down by a weak rupee, the Reserve Bank on Tuesday chose to keep all key interest rates unchanged and asked the government to take urgent steps to reign in the high current account deficit.
RBI's current Deputy Governor Urjit Patel got 3-year extension in January.
A top Finance Ministry source, however, said no discussion has taken place in the government so far on whether to extend Rajan's tenure or not.
The Bharatiya Janata Party (BJP) on Tuesday welcomed the appointment of noted economist Raghuram Rajan as RBI governor but advised him not to compromise on the autonomy of the institution or get cowed down by the government.
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