Deputy Governor Michael Patra warned about the spillover effects of food inflation.
New-generation private sector banks such as ICICI, HDFC, Axis, Kotak etcetera owe their existence to the recommendations of the first Narasimham Committee.
Among the 30 Sensex companies, Larsen & Toubro, Power Grid, NTPC, State Bank of India, Reliance Industries and HDFC Bank were the biggest laggards. Sun Pharma and Nestle were the only gainers.
A paper authored by Rajan said, state-linked banks can be a first step in altering the ownership structure of some PSBs, where the government brings down its stakes to below 50 per cent, creating distance from operations of banks, and improving governance along the way.
Some measures announced in Indradhanush -- a 7-point Modi plan to revamp State-owned banks but not completed -- may be taken up again.
A gradual approach to privatise public sector banks (PSBs) is more ideal than taking a big-bang approach, a study by Reserve Bank of India (RBI) staff has concluded. It has backed the government's idea to privatise two PSBs initially. Such a gradual approach would ensure that large-scale privatisation does not create a void in fulfilling important social objectives of financial inclusion and monetary transmission, the study has argued.
Prime Minister Narendra Modi will on Friday launch two schemes of the Reserve Bank of India (RBI) that may go a long way in changing how the household sector invests, and complains if anything goes wrong with their savings. These schemes - retail direct and an integrated ombudsman - will be launched by the Prime Minister virtually, in the presence of Finance Minister Nirmala Sitharaman. With the introduction of retail direct, a common man can directly take a position in government securities (G-Sec), considered to be the safest asset class a sovereign can offer.
The talk of governance reforms at public-sector banks seems to remain on paper, as a majority of them continue to be working with just a handful board members. Half of the board seat at these banks have been vacant. Ten of the 12 public-sector banks, even large ones like Punjab National Bank, Canara Bank and Union Bank of India - all except State Bank of India (SBI) and Bank of Baroda - don't even have a chairman. In 2014, while splitting the post of chairman & managing director (CMD), the government had decided to appoint non-executive chairmen at these banks. SBI, which has an executive chairman and four managing directors, was an exception.
In her fourth tranche of the economic package, she said commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne.
'I am shocked that the BJP makes so many commitments. What did they deliver as the NDA?'
The Centre's proposal to call for governance reform in the RBI could, however, take a back seat, a source privy to the development said.
As deputy governor, Patel headed the RBI panel to draft the monetary policy report, which became the basis of the ongoing reforms at the apex bank
The use of RBI capital to strengthen public sector banks will have many positive implications for the economy -- and a few manageable downsides, points out R Jagannathan.
'His (Das) approach to work seems that of working as a team with ease in communication.'
RBI says haste in easing norms for banks harmful to economy.
While RBI is likely to cut repo rate by 25 basis points on Wednesday, the government is also expected to push reform initiatives like increasing FDI limit in insurance sector in the Budget session, it added.
The Budget should use the extra RBI surplus to better effect, suggests A K Bhattacharya.
Reserve Bank Governor Shaktikanta Das on Wednesday said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government.
Asked when the economy will revive, Das said it is difficult to make an estimate as there are many things which are still playing out.
Investors' wealth soared by Rs 10.58 lakh crore in three days of the market rally, where the BSE benchmark jumped over 2 per cent, and hit an all-time high on Monday. Extending its winning momentum to the third day running, the 30-share BSE Sensex jumped 363.20 points or 0.49 per cent to settle at 74,014.55. During the day, it zoomed 603.27 points or 0.81 per cent to hit its record high of 74,254.62.
'We have essentially tried to set out an agenda for the next five years and it, in essence, represents the political commitment to that agenda.'
Lauding the government and RBI for saving the day for India with conservative banking norms, ICICI Bank chairman KV Kamath said on Monday any further reforms in the sector should wait as global banks are in 'disarray'. Expressing his views on RBI deferring the liberalisation of foreign banks, the ICICI Bank chairman said: "I think it is entirely appropriate that they have said they will review it at appropriate time."
Years before the Supreme Court struck down as 'unconstitutional' an opaque political funding tool that allowed individuals and companies to donate money to political parties anonymously and without any limits, the then finance minister Arun Jaitley -- the prime mover of electoral bonds -- had termed them legitimate and transparent.
The Budget, to be presented on February 1, is likely to be less worried about fiscal deficit and will be focused more on nursing the fragile growth, according to a Wall Street brokerage report. Bank of America Securities India expects the budget to peg "fiscal deficit at a high 5 per cent of GDP for FY22 and 7.2 per cent for FY21, as it is likely to step up capex, recap public sector banks, push asset sales to break government monopolies, offer sops for real estate, tax cuts for lower income groups and creation of a bad bank". Its house economists expect these spends to be funded by debt and partly by imposing a cess on high income groups and also by some non-fiscal measures like tapping the central bank's revaluation reserves and bank recapitalisation and infra bonds.
This is because the bond market has factored in the Rs 4.88-trillion gross borrowing for April-September 2020.
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.
India needs a second green revolution along with the next generation of reforms with a view to make agriculture more climate-resistant and environmentally sustainable, said an RBI article on farm sector challenges. Observing that Indian agriculture has exhibited remarkable resilience during the COVID-19 period, the article said "new emerging challenges warrant a second green revolution along with next-generation reforms". Despite the success in terms of production that has ensured food security in the country, food inflation and its volatility remain a challenge, which requires supply-side interventions such as higher public investment, storage infrastructure and promotion of food processing, said the article titled 'Indian Agriculture: Achievements and Challenges'.
The central bank dashed hopes of any steep interest rate reduction.
'To simply let the rupee depreciate to any level according to market forces will not be in the country's interests.'
Y H Malegam, 80, will head the panel that will look into non-performing bank assets and their relation to the Rs 114-bn PNB scam.
Managing Brexit, inflation and banking reforms, along with the political environment, will be tough.
Governments that did not respect the central bank's independence would sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined the regulatory institution, Deputy Governor Viral Acharya warned.
Tension between the government, specially the finance ministry, and RBI is as old as the central bank itself.
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
There hasn't been any dramatic moment in the first act (the Budget) but nobody would complain. It's par for the course as long as the figures don't change in the main Budget, which will be presented after general elections.
Bankers seem to be pleased with the government for keeping its promise of not interfering in operational matters, but are apprehensive about the intense scrutiny of their functioning.
'One way of doing this could be offering credit guarantee to the banks, say 10 per cent, for fresh loans given to micro, small and medium enterprises,' observes Tamal Bandyopadhyay.
The land acquisition bill is a catalyst to investment and passing the bill will improve India's business environment.
India's political infighting is denting business confidence.
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