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.
Reserve Bank of India (RBI) Governor Duvvuri Subbarao said inflation would determine the future policy and the effort would be to manage the balance between growth and inflation.
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.
Banks will ask the banking regulator to defer the higher provisioning norms on standard restructured advances.
RBI Governor D Subbarao is expected in the capital on Friday to hold pre-policy consultations with Finance Ministry officials.
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.
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.
Amid decelerating manufacturing growth, the Reserve Bank wants the government to come out with measures in the Budget to give a boost to the sector, which can employ surplus labour from agriculture.
The central board of Reserve Bank of India (RBI) has opposed a government move to have control over the central bank's staff-related matters. The proposal to make staff regulations statutory and bring them under the subordinate regulation of Parliament was discussed at RBI's board meeting in Kolkata last week.
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 Reserve Bank of India (RBI) on Monday said that the timing and sequence of exit from an easy monetary policy were still a challenge.
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.
Blaming high cash balance with the Government for aggravating liquidity strain in the system, the Reserve Bank on Thursday asked it to loosen purse strings for easing the situation. "On Wednesday, the government cash balance stood at Rs 92,000 crore (Rs 920 billion).
The Reserve Bank of India has launched an assault on inflation by increasing the cash reserve ratio (CRR) 75 basis points to 5.75 per cent. While sounding upbeat on economic growth, the central bank has kept the door open for an increase in interest rates even before the annual policy statement in April.
RBI had made available a potential liquidity of Rs 5.60 lakh crore (Rs 5.6 trillion), nearly 9 per cent of gross domestic product, to help the country tide over the liquidity crisis following the global financial meltdown triggered by the collapse of America's iconic investment banker Lehman Brothers in mid-September.
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.
Subbarao was delivering the second Business Standard Lecture in New Delhi, immediately after releasing Business Standard India 2011, the fourth volume of the annual India series published by BS Books, a division of Business Standard Limited.
However, since the banking system is facing tight cash conditions due to payment for spectrum for high speed telecom and broadband services and advance tax outgo, some experts are also of the view that RBI would wait for liquidity to ease before going for rate hikes.
"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.
MFI tactics have even prompted Andhra Pradesh Cabinet to approve an ordinance to rein them in.
Declining value of the rupee, widening Current Account Deficit (CAD) and the impact of likely tapering of US bond purchases are some of the key issues which will keep Raghuram Rajan busy.
In order to contain Current Account Deficit and arrest value of declining rupee, the RBI last month had raised the cost of borrowing for banks and reduced availability of funds to curb speculation in the forex market.
Expect rate rise pause, amid market expectations to the contrary.
These banknotes will bear the signature of RBI Governor D Subbarao and the year of printing 2012 will be on the reverse of the banknote.
Rajan will evolve a policy with the help of professional persons for a national consensus if we have to carry on with implementing social and economic changes in a complex economy.
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.
The Reserve Bank of India on Wednesday said banks' response to monetary actions in terms of cutting interest rates have been mute and there is room for further softening of interest rates.
"The economy is going through a very difficult patch and business confidence has plummeted. New investments have slowed down," Assocham President Rajkumar Dhoot said during his interaction with RBI Governor D Subbarao ahead of the central bank's monetary policy review scheduled on April 17.
RBI intervenes in the foreign exchange market to manage volatility and to prevent disruptions to the macroeconomic situations.
The International Monetary Fund and the World Bank had forecast that India's economy would grow at 8 per cent and 9 per cent, respectively.
The loan by the banks to MFIs for on-lending to small borrowers will fall under 'priority sector' category if the RBI guidelines are met.
"Bank loans to all MFIs, including NBFCs working as MFIs on or after April 1, 2011, will be eligible for classification as priority sector loans if, and only if, they conform to the regulations formulated by the Reserve Bank," RBI Governor D Subbarao said in the 'Monetary Policy Statement for 2011-12'.
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
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.
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.
The government is in the process of setting up of an independent debt management office, aimed at separating RBI's role as the decider of interest rate in the market, and at the same time being the banker to the government.
Subsequent data revisions revealed that growth had not slowed that sharply.
Currently, banks pay up to 9.5 per cent interest on fixed deposits.
RBI's policy stance must address concerns over slowing output
RBI raised lending rates to commercial banks 2 per cent to 10.25 per cent making loans costlier.
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