Privatisation or consolidation into half a dozen large banks might not rescue public sector banks from the crisis they find themselves in.
After selling dollars for the past few months, the Reserve Bank of India (RBI) may take a hands-off approach before its annual account closing by not trying to prop up the rupee as geopolitical tensions show signs of stabilising with global crude oil prices easing from its $140 peak. The central bank was a net buyer of dollars between April and September, and then turned a net seller in the following months, the data released by the RBI showed. The RBI continued to be a net buyer of $36.6 billion in this fiscal year - between April and January. In 2020-21, it purchased $68 billion on a net basis.
Some banks are disbursing only Rs 5,000 per person while those having better cash availability are offering Rs 10,000 or Rs 12,000 per withdrawal
The RBI governor, who made a presentation about the state of the economy as well about the world economy to the 31-member Parliamentary Standing Committee on Finance, stayed clear of controversial questions like government invoking special powers.
The RBI now brings in important and contentious changes directly through voluminous Master Directions, or Master Circulars
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
Media has gone beyond its traditional boundaries.
Amid concerns over misleading claims of huge returns on cryptocurrency investment, Prime Minister Narendra Modi on Saturday chaired a meeting on the way forward on the issue, with government sources asserting that such unregulated markets cannot be allowed to become avenues for "money laundering and terror financing".
These recommendations are based on interactions held by the Banks Board Bureau with eligible candidates from PSBs towards appointment against vacancies in PSBs for the period 2018-19
Reserve Bank will have to constantly re-assess the "dynamic and fast changing situation" and tailor its actions accordingly, Governor Shaktikanta Das said during the recent meeting of the Monetary Policy Committee (MPC) which decided to maintain status quo on key interest rate. According to the minutes of the six-member MPC meet released by Reserve Bank of India (RBI) on Friday, the five other members had also expressed a similar opinion amid the ongoing Russia-Ukraine conflict's impact on the global and domestic economies. MPC, which held its meeting from April 6-8, unanimously decided to keep the borrowing costs unchanged at a record low for the 11th time in a row in a bid to continue supporting economic growth despite inflation edging higher in the aftermath of Russia-Ukraine conflict.
All six members of the Reserve Bank of India's (RBI's) monetary policy committee (MPC) expressed caution over food inflation during the December review, while two external members warned about high real interest rates as headline inflation approaches its target of 4 per cent. The central bank continued to maintain the status quo on both the repo rate and the stance in the December monetary policy. India's retail inflation in November rose to 5.5 per cent - its fastest pace in three months - due to higher food prices.
Economic Affairs Secretary Subhash Garg is the finance ministry's primary liaison with the RBI.
Although this may not be music to Raghuram Rajan and Viral Acharya's ears, the real reason in my estimation for their quitting is expatriate over-sensitivity, intolerance or arrogance, argues B S Raghavan, the distinguished civil servant.
The academic prize is sponsored by the Deutsche Bank Donation Fund and carries an endowment of euro 50,000.
As the clean-up has taken hold, loan growth slipped to 10.7 per cent in the last fiscal
Equity benchmarks extended their decline for the fourth straight session on Wednesday, with the Sensex falling 214.85 points after the Reserve Bank raised the key interest rate by 50 basis points. Continuous foreign fund outflows and surging crude oil prices also weighed on markets. The 30-share BSE benchmark dropped 214.85 points or 0.39 per cent to settle at 54,892.49.
The Reserve Bank of India's rate-setting panel on Wednesday started discussions to firm up the next bi-monthly monetary policy amid expectations that it might retain status quo on interest rate but change its monetary policy stance amid rising inflation on account of geopolitical developments.
"I think bankers have expressed some concern that they should not be held liable for actions that are taken in the full spirit of what is needed," Raghuram Rajan said.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
The inflation target of the RBI would be reviewed once every five years.
Urjit Patel, Binny Bansal, Nirav Modi and Rahul Gandhi personify the big trends that defined 2018. Well, almost...
GDP growth of 7.7 per cent in the first half of this fiscal has "left sceptics gasping and woefully behind the curve", an RBI article said on Wednesday. It also stressed the buildup in the growth momentum is likely to be sustained. The article on the state of the economy published in the Reserve Bank's December Bulletin on Wednesday also said CPI-based retail inflation is expected to ease to 4.6 per cent in the first three quarters of 2024-25 from 5.6 per cent in November.
Currently, foreign lenders are present in India only through branches or representative offices.
'We can't have the best of both worlds -- large, efficient, world class government-owned banks, doing social banking and making profits. 'Why not set them free from the shackles of such obligations and run them as business units?' says Tamal Bandyopadhyay.
Experts disagree with the idea and the Reserve Bank of India (RBI), which has the sole right to print money, is not comfortable with it as well.
The challenge for the RBI in 2024 is likely to be less about containing elevated inflation and more about curbing excessive financial market exuberance and a 'problem of plenty', notes Sajjid Chinoy, Chief India Economist JP Morgan.
Elections may be a few months away, but the government may get into election mode much earlier than that, predicts A K Bhattacharya.
RBI may also be open to injecting liquidity through open market purchases of bonds but is resisting relaxing capital buffers for banks.
Taking advantage of the RBI's different accounting year, the Centre had started demanding an interim dividend till the time the latter's final balance sheet is prepared (usually in August). To address this anomaly, an expert committee led by former RBI governor Bimal Jalan had recommended aligning the RBI's financial year with that of the government.
Rajan was speaking at a news conference.
This was the near-unanimous replies of 10 market participants.
Reserve Bank Governor Shaktikanta Das on Wednesday ruled out upside risks to the 5.3 per cent inflation forecast for the current fiscal, saying the recent cut in excise duty on diesel and petrol as well as better management of supply-side issues on the food front have contained inflationary expectations. These measures are significantly positive for inflation management, he said. After months of calls for reducing taxes on fuels, the government, last week, cut the excise duty on diesel and petrol by Rs 10 and Rs 5 per litre, respectively.
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The central bank will come out with two measures on restructuring to tackle financial stress, Rajan said.
Dr Rajan is a person of very high caliber
The deadline for officers to decide on their career path in the biggest organisational rejig in the central bank's 85-year history ends on January 31. The immediate fallout could be its disruptive impact on the supervisory process for 2020 -- and beyond -- given the manpower shortfall, even as more entities are set to come under closer central bank scrutiny.
Retail inflation declined to a one-year low of 5.72 per cent in December 2022, mainly due to softening prices of food items, according to official data released on Thursday. The Consumer Price Index (CPI) based retail inflation was at 5.88 per cent in November 2022 and 5.66 per cent in December 2021.
RBI has already come out with a discussion paper on banking sector in India, on which the regulator has invited comments from stakeholders.
Garg had refused to sign on the report finalised by the former Reserve Bank of India governor Bimal Jalan-led committee reviewing the central bank's economic capital framework (ECF).
Based on this screening, the committee may weed out applications that do not meet the eligibility yardstick or the 'fit and proper' criteria for securing a licence.
