Overhauling India's bloated and often sluggish state banks is critical for the government
'The finance ministry and public sector banks have tried to keep the names of wilful defaulters secret.' 'Secrecy and concealing information are inbred among banks and even the RBI,' observes Debashis Basu, editor, www.moneylife.in.
Ahead of the monetary policy review, RBI governor D Subbarao is expected to meet Prime Minister Manmohan Singh and finance minister Pranab Mukherjee on October 23.
The Reserve Bank has given an in-principle nod to invest $5 billion of foreign exchange reserves annually in infrastructure projects through two subsidiaries of India Infrastructure Finance Company.India's forex reserves stood at $266.52 billion as on November 2 and experts believe that they should be utilised at least for financing infrastructure projects.
The question is which tool it should use to shift gear.
RBI may also be open to injecting liquidity through open market purchases of bonds but is resisting relaxing capital buffers for banks.
October shipments to India, the world's No.2 gold consumer behind China, jumped to about 150 tonnes from less than 25 tonnes a year earlier and 143 tonnes in September, a finance ministry official said last week.
Some measures announced in Indradhanush -- a 7-point Modi plan to revamp State-owned banks but not completed -- may be taken up again.
The finance ministry has called a meeting of the State-Level Bankers Committee in New Delhi on Tuesday, which will be attended by officials from scheduled commercial banks, regional rural banks, cooperatives, Reserve Bank of India, National Bank for Agriculture and Rural Development, the Centre as well as states. The meeting will be presided over by financial services department secretary Arun Ramanathan.
The meeting came amid a face-off between the central bank and the finance ministry over issues ranging from appropriate size of reserves that RBI must maintain to ease of lending norms to step up growth in an election year.
'I suspect the recovery that the banks are going to get out of this IBC is not going to be more than 30 per cent.' 'If you leave the steel industry aside, the recovery rates are not looking very, very healthy,' Jairam Ramesh tells the Rajya Sabha.
The finance ministry said it would wait for RBI guidelines, a development which will provide much relief to ICICI Bank and HDFC Bank. Both are already known as Foreign Owned Indians Controlled entities, after foreign investment in them rose much above 50 per cent, following new norms of calculations by the commerce ministry.
The Reserve Bank of India does not have any estimate of alleged illegal gold transactions going on in the country, according an RTI reply.
Unlike any other national asset, which is typically sold to the highest bidder, the profile of the bidder is the most important criterion for a licence to bank, and even for acquiring more than 5 per cent stake, explains Tamal Bandyopadhyay.
The governor had just made an elaborate presentation in defence of the central bank's decision to not to succumb to industry's demand for rate cuts in the mid-quarter policy.
The governor had just made an elaborate presentation in defence of the central bank's decision to not to succumb to industry's demand for rate cuts in the mid-quarter policy.
'Trust your new governor,' Omkar Goswami advises RBI Deputy Governor Viral Acharya. 'Just because he is from the IAS and doesn't carry a PhD from a US university does not make him unsuitable for the task.' 'If anything, Das will pour oil on troubled waters, and save the RBI's reputation.'
The Economic Survey 2022-23 (FY23), to be presented a day before Union Budget 2023-24 (FY24), is likely to project India's real gross domestic product (GDP) growth between 6 per cent and 7 per cent for FY24, Business Standard has learnt. The broader theme of the Survey could be on how India has dealt with two years of a global pandemic and the ongoing geopolitical disturbance, the strengths and weaknesses that emerged, and what lessons may be learnt. The much-awaited Survey will be the first one by Chief Economic Advisor V Anantha Nageswaran and his team in the finance ministry's economic division.
The DoP has moved a Cabinet note for the government to provide Rs 500 crore (Rs 5 billion) as initial capital to India Post towards starting a bank.
While the Reserve Bank and the Economic Survey of the finance ministry have projected India to grow at 6.9 per cent and 6.5 per cent in current fiscal, the International Monetary Fund estimates it to be 6.6 per cent.
Backloading the government's borrowing programme suggests the finance ministry's confidence in better revenue numbers, says A K Bhattacharya.
According to recent finance ministry data that captures the performance of public sector banks, instances of home loan defaults contributing to gross non-performing assets was the highest in the category of loans up to Rs 200,000.
Lower crude prices mean less government outlay for India,
RBI Governor D Subbarao is expected in the capital on Friday to hold pre-policy consultations with Finance Ministry officials.
After growing at 8.4 per cent for consecutive financial years, economic growth fell to 6.5 per cent in 2011-12, primarily owing to a dismal show by the manufacturing sector, as well as a part of the services segment.
India Post may be keen to apply for payment bank licence.
The telecom industry, with a cumulative debt of around Rs 2,75,000 crore (Rs 2,750 billion), has been mired in various controversies, besides facing intense competition, low tariffs and falling margins.
The Reserve Bank of India has cut repo rates, the rate at which it lends money to banks, by 75 basis points since January this year, but most banks have not lowered lending rates.
A committee headed by Patel recommended retail inflation targeting and a monetary policy committee.
Finance Minister Jaswant Singh said on Tuesday the government and the central bank were closely monitoring rising inflation and expected "a correction" soon.
India's ongoing inflation-related worries must not be seen in isolation. Instead, it is a challenge being faced by several emerging economies, the finance ministry's chief economic advisor Kaushik Basu said on Tuesday, while also calling for concerted international action to deal with the issue.
The finance minister has said that United Bank has managed to reduce its non-performing assets.
The finance ministry is having a relook at the entire financial sector regulations and legislations to determine how they compare with the global standards.
Finance Ministry meets market participants, wants feedback.
In the last fiscal, the government had originally budgeted a dividend income of Rs 27,178 crore (Rs 271.78 billion) from PSUs.
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