Reserve Bank Governor D Subbarao on Tuesday favoured bifurcation of the posts of chairman and managing director in state-run banks, saying the experience of such a split in the private sector has been satisfactory.
The Reserve Bank on Monday warned that India's foreign exchange reserves mostly comprise borrowed funds and the country is vulnerable to sudden outflow of funds.
The Reserve Bank of India chief also reviewed the high-level of inflation with the Finance Minister, ahead of the quarterly review of monetary policy next week, amidst expectations of another hike in key interest rates.
What the industry and observers have been saying for quite some time -- that there is a lot of regulatory confusion on developing a corporate debt market -- has come out in the open with the RBI Governor and the Plan panel head speaking on the same topic in different languages.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
'I am sure Dr Patra will get the fullest cooperation from the finance minister who needs workhorses, not prima donnas constantly looking to improve their CVs,' says T C A Srinivasa-Raghavan.
RBI Governor D Subbarao is expected in the capital on Friday to hold pre-policy consultations with Finance Ministry officials.
The RBI cut interest rates on Friday by a quarter point for the third time since January.
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.
Given that food inflation remains high, the inflation outlook will be influenced by concerted efforts to break food inflation persistence.
Reserve Bank of India governor D Subbarao on Thursday said that India's central bank needs to control inflationary expectations and support growth.
Moody's has cautioned the government against targeting double-digit gross domestic production expansion saying any growth beyond 7 per cent without reforms will fuel inflation that will result in 'more painful' future adjustments.
Guidelines say that new banks need to set up 25 per cent branches in unbanked areas.
"It was a good long meeting with the governor. He met the finance minister. He reviewed the situation. Rest, wait for the policy," finance secretary Ashok Chawla told reporters.
High current account deficit is leading to the rupee weakening.
The Reserve Bank on Tuesday said the soft monetary policy adopted by it to counter the impact of the global financial meltdown on the country will continue till the economic recovery is secured.
The meeting comes days after the finance minister told Parliament that he would discuss the possibility of further fiscal and monetary measures to revive economic growth, which is projected to fall to 7.1 per cent this year, as against 9 per cent or more in the last three years. The Central Statistical Organisation is due to release the third-quarter gross domestic product estimates by the end of the week. RBI is expected to announce more measures after the data is released.
Finance minister Pranab Mukherjee said on Tuesday the Reserve Bank of India's move to keep almost all rates unchanged is line with the discussions he had with the apex bank's governor and the government's thinking on fiscal and monetary policies.
The stress of dealing with the crisis, often with potentially conflicting objectives in front of them, appears to have brought the differences between the finance ministry and the RBI back to the surface.
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.
Reserve Bank of India Governor D Subbarao on Tuesday said that unwinding of excess liquidity would need to be carefully calibrated once the economy recovered.Comparing the RBI's steps with other central banks, Subbarao said the speed and scale of monetary response was more aggressive than many other countries.The RBI has lowered the repo rate, the rate at which it lends to banks, from a peak of 9 per cent to 5.5 per cent in less than five months.
In the wake of wholesale price-based inflation escalating to 7.31 per cent for the month-ended December and food prices increasing by over 17 per cent, it is expected that RBI will signal tightening of money supply.
The Reserve Bank on Tuesday lowered the growth projection for the current fiscal to 5.5 per cent from its earlier estimate of 5.7 per cent and asked the government to undertake policy measures to improve investment climate.
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.
Policymakers say falling rupee could lead to rise in prices of imported items such as edible oil and build up inflationary expectations in the economy.
The central bank has clearly signalled the conditions under which monetary easing would take place early this quarter. And, current conditions meets the RBI's paramters
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.
Officials, however, said one person's thinking might not change the views of the institution.
The drop in headline inflation to a 40-month low of 5.96 per cent for March has increased the possibility of a rate cut by the Reserve Bank at its May 3 annual policy, analysts and rating agencies said.
Broader markets ended weak with mid-caps falling 0.4 per cent while small-caps declined 1.3 per cent on the BSE.
Industry is demanding a cut in repo rate to help revive India's sagging GDP growth that hit decade's low of 4.5 per cent in the third quarter of 2012-13.
Markets opened sharply lower on Tuesday, amid weak Asian cues, on concerns that the liquidity squeeze by the central bank would hurt growth and impact equity inflows.
New norms to keep Raghuram Rajan out of the race.
RBI raised lending rates to commercial banks 2 per cent to 10.25 per cent making loans costlier.
The rupee has declined by about 9 per cent in the past three months and had touched an all time low of 61.21 to a dollar earlier this week.
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.
Central bank estimate economy to grow at 5.5 per cent.
India imports 80 percent of its oil, which adds to inflationary pressure.
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
