Bankers and other stakeholders are now almost certain that the Reserve Bank of India (RBI) will increase the key policy rate, or the repo rate, by 25 basis points (bps) on Tuesday.
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.
The central bank cut SLR to 23 per cent from 24 per cent.
Subbarao also asserted that the proposed financial sector reforms should be driven more by the sectoral regulator Reserve Bank of India than by a legislative panel.
The second post of deputy governor became vacant after V Leeladhar superannuated a few months ago. Punjab National Bank chairman and managing director K C Chakrabarty is to take over as deputy governor on Monday. Apart from monetary policy, Subbarao will also handle the department of economic analysis and policy, department of statistics and information management.
Leaving it to Parliament the issue of amending laws to provide heavier penalty on banks indulging in such acts, RBI Governor D Subbarao also dismissed perceptions that the central bank was going soft on errant banks.
Monetary policy typically acts with a lag, and price stability therefore has to be viewed in a medium term perspective, Subbarao said in a speech at the South Asian Association for Regional Cooperation Finance Governors' symposium at Kumarakom in Kerala.
Reserve Bank of India Governor D Subbarao on Wednesday contested the idea of "making banking boring" to bring back economic stability, mooted by Nobel laureate Paul Krugman in the wake of global financial meltdown.
Subbarao said he would be "ok" if a sovereign bond issue in foreign currency is done once just to test the waters, but cautioned against using the instrument regularly.
"Given the current economic context, and given the policy initiatives of the RBI, there is considerable scope for banks to reduce lending rates," said RBI Governor D Subbarao. He also pointed out that the several fiscal stimulus packages formulated by the government, together with monetary accommodation and counter-cyclical measures announced by the central bank, have started showing revival signs.
Recent financial crisis underscored the dangers of over-financialisation of the real economy.
The last time RBI allowed new private banks was in 2002, prior to which it allowed new players in the mid-90s.
In 21 banks, including SBI, the government owns majority stake.
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Addressing a Ficci-organised banking summit in Mumbai, he at the same time said that it will take several years for the country's banks to achieve the status of a large global bank.
Former RBI governor admits to being a 'greenhorn' as he started his stint at the central bank.
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.
Former RBI Governor Subbarao blamed Chidambaram for undermining the autonomy of RBI and putting pressure on him to cut interest rates.
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Subbarao also said credible fiscal consolidation is a pre-condition for stabilising inflation and in securing non-inflationary growth.
In his book, former governor Subbarao says Chidambaram, Pranab were piqued by his tight rate policy.
Reserve Bank of India Governor D Subbarao on Thursday appeared before Parliament's Public Accounts Committee (PAC) probing the 2G spectrum scam to explain his position during his term as the finance secretary.
The central bank can directly print money and finance the government, but it should avoid doing so unless there is absolutely no alternative, former RBI governor D Subbarao on Wednesday said while pointing out that India is 'nowhere' near such a scenario. In an interview with PTI, Subbarao suggested that to deal with the second wave of COVID-19 induced slowdown in the economy, the government can consider Covid bonds as an option to raise borrowing, not in addition to budgeted borrowing, but as a part of that.
Former Reserve Bank of India Governor Duvvuri Subbarao has said the central bank could lose control over money supply and inflation management if cryptocurrency is allowed in the country. Speaking at a webinar organised by the National Stock Exchange (NSE) and New York University (NYU) Stern School of Business, Rao also said India's case for issuing a central bank digital currency (CBDC) may not be strong as there are capital controls. "Crypto is backed by algorithms and there is fear that the central bank might lose control over money supply and inflation management.
According to Subbarao, the pressure on the currency was inevitable.
Subsequent data revisions revealed that growth had not slowed that sharply.
In the wake of ponzi schemes and chit fund scams, Reserve Bank Governor D Subbarao on Wednesday said there is a need to review the regulations governing these sectors and increase surveillance on such entities.
Expectations for a rate cut had gathered momentum this week after inflation slowed to its lowest level in three years.
Subbarao said, short-term as well as medium-term prospects or Indian economy continue to be grim. Fiscal deficit is going to be much higher, the debt burden much larger and the financial sector will be in a worse shape.
Bringing their differences into open, outgoing RBI Governor D Subbarao took a dig at Finance Minister P Chidambaram for his comment once that he would "walk alone" to ensure growth in the face of tight money policy of the central bank.
A revival in investment activity, which is key to stimulating growth, depends particularly on the recent policy announcements by the government being translated into effective actions, Subbarao said while announcing the second quarterly review of the monetary policy.
Under his leadership, RBI kept the domestic markets, to a large extent, alienated from the international meltdown to avoid liquidity or solvency cascades.
Subbarao's remarks come against the backdrop of Finance Minister P Chidambaram's assertions in recent weeks that RBI should not focus solely on containing inflation but also look at the larger mandate of growth and job creation.
Remarks come at a time when he is under pressure from the govt to cut interest rates.
Reserve Bank of India Governor D Subbarao surely knows how to crack a joke even on as mundane a topic as the cash reserve ratio (CRR).
The full text of RBI governor D Subbarao's last speech, where he blames the UPA government for the fiscal mess
Reserve Bank of India governor D Subbarao said the rapid expansion of the government borrowing programme was coming in the way of the central bank's monetary policy objective of a lower interest rate regime and called for more independence for the central bank.
Raghuram Rajan becomes the 23rd governor of Reserve Bank of India.
He said there is also need for raising agriculture productivity, and improvement of social sector outcome.
India's headline inflation has been high, forcing RBI to keep policy rate unchanged since April.
Central bank Governor Raghuram Rajan drew kudos from Moody's Analytics for his monetary stance.
Reserve Bank of India Governor Duvvuri Subbarao is not interested in carrying on in his present job after his term ends in September next year.
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