The additional cash will now give the Centre more headroom for stimulating the economy.
While the collapse of a large financial intermediary can wreak havoc on the system because of the interconnectivity, a large business conglomerate too can play spoilsport if the banks have too much exposure to the entity, explains Tamal Bandyopadhyay.
Bank Nifty pared all its intraday gains to end over 1% lower led by losses in BoB, ICICI Bank, Axis Bank and Bank of India
Janmejaya Sinha lays down Urjit Patel's agenda - cleaning up bank balance sheets, evaluating robustness of CPI and pushing for digitisation in financial services.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
For five consecutive policy reviews in 2023, the Reserve Bank of India (RBI) chose to hold rates, citing inflation threat. And when the prices did cool off a bit, it reminded all about the target to get the headline consumer price inflation at 4 per cent and the risks from food inflation. Heading into the new year, all eyes are on when RBI will cut the rates, especially after one of the Monetary Policy Committee (MPC) members stressed on the need for such an action in the face of the US Federal Reserve's guidance for easing rates.
Jaitley said inflation has been under control for long and is likely to remain so on the back of good monsoon and unlikely spike in oil prices.
As inflation rate is near the upper limit of the comfort zone, experts rule out rate cuts anytime soon
'If the RBI board forces the management's hand on all the key issues, it should be prepared for resignations by the governor and the key deputy governor, Viral Acharya,' warns T N Ninan.
'It will be interesting to see how Dr Patel handles gadflies with the maturity of egregiously petulant three year olds.' 'That Dr Patel does not, in so far as we can tell, cause society matrons to gush like hormonal teenagers can only be a good thing for him.' 'Look where their febrile imaginations and breathless prose took his predecessor.'
The FRBM report, to be submitted on Tuesday, is likely to have 'excuse clauses', absolving the government of meeting its fiscal commitments under certain conditions such as war or conflict, global economic meltdowns or natural disasters.
The former bureaucrat said he will take measures which the economy requires in a timely manner and as the first step, will meet the heads of public sector banks.
If indeed the issues involved between the government and RBI are of immense public interest, why not make public the arguments of both the government and the RBI, irrespective of the outcome of the process, says Tamal Bandyopadhyay.However, the Act is silent on what happens if the governor's views differ from that of the government. If Patel does not want to budge from his stance the government can either see merit in the Governor's arguments and decide against going ahead with its plan or overrule him. My guess is that the issues raised by the government need to be sorted out not at the November 19 board meeting but between the Governor and the government, says Tamal Bandyopadhyay.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
Raghuram Rajan said the passage of the GST Bill augurs well for the growing political consensus for economic reforms.
The RBI is not statutorily independent from the government but has long enjoyed wide latitude
RBI has pegged the GVA growth of 7.6 per cent for the current fiscal and 7.9 per cent the year after
Progress on the steps taken by Governor Shaktikanta Das' predecessor Urjit Patel to restore financial system integrity will be a key thing to assess any damage to the institution, Subramanian said.
North Block and Mint Road seem likely to now stick to the earlier convention of the RBI governor coming to Delhi and being the only MPC member meeting the finance minister and senior bureaucrats on pre-policy meetings
All old notes of these denominations will continue to be legal tender
Voting for the 2014 general elections will begin in April and it is expected Budget 2014-15 will be presented in June.
'All that Mr Modi needed to do was to call Urjit Patel over for a cup of tea and ask him nicely, and this fuss would never have happened.'
'The finance minister has messed up the economy.'
'Three external members of the first MPC are respected researchers with excellent academic background, but there is no harm in considering academicians with diverse backgrounds such as finance and labour along with economists for this body,' recommends Tamal Bandyopadhyay.
A task force will speed up the recalibration of 200,000 ATMs so these can dispense the new Rs 2,000 notes.
The board deliberated on the governance framework of the RBI and it was decided that the matter needs further examination
The career bureaucrat-turned-central banker walked into the 19th floor corner room of the Reserve Bank on December 12, 2018. Since February 2019, the Das-led RBI has cut the repo rate by a whopping 135 basis points to support the sagging growth, including an unprecedented 35 bps reduction in August. As he completes one year at the helm, woes in the NBFC sector, overall health of the banking sector and steeply falling economic growth are among the major challenges that needs to be tackled sooner than later.
Heavy dollar selling by banks and exporters alongside debt-related inflows largely supported the rupee
RBI governor is seen succeeding International Monetary Fund (IMF) chief executive officer, Christine Lagarde, next year.
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
India will have to show more willingness to import, and since Biden will not encourage sale of oil and gas to bridge the gap, it means there has to be more meaningful duty reduction in other areas even if Delhi baulks at a Free Trade Agreement so soon after walking out of RCEP.
'In plain simple English, these practices amount to a looting of our country's future by some in the business community, in cahoots with some lenders,' says RBI Governor Dr Urjit R Patel.
He warned low interest rates globally could distort markets and would be difficult to abandon
The interim dividend will help Narendra Modi-led government partly bridge the deficit its budget had developed after the announcement of a Rs 75,000 crore a year cash dole scheme for small farmers.
Rajan said too many infra projects do not have forex earnings thus are unable to pay in dollars or yen
RBI has kept interest rate unchanged at 8 per cent since January
'There is merit in keeping the central bank's balance sheet strong if the government's fiscal balance sheet is weak.'
The six-member monetary policy committee voted 5:1 for the decision, with only Ravindra Dholakia voting for a 0.25 per cent reduction in rates.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
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