As GDP growth falls below the new normal, rate cuts seem inevitable.
Recent slide in inflation no consolation amid exceptional shrinkage in industrial growth.
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.
MFI tactics have even prompted Andhra Pradesh Cabinet to approve an ordinance to rein them in.
With budgetary preparations on in full swing, the Reserve Bank of India on Friday advised the Finance Minister to at least partially roll back the stimulus that was provided to help the industry cope with the financial crisis.
There is also a lobby within the bureaucracy that wants to see Rajan's influence curtailed
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.
This failure of basic short-term policy is surprising, given the star power that this government brings to its economic management.
The Reserve Bank of India's governor said On Thursday that there is a cost to any further fiscal stimulus package as it would put pressure on credit markets. However, RBI Governor Duvvuri Subbarao did not elaborate further on what this additional cost would be.
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.
Faced with the challenging task of balancing growth and inflation, the Reserve Bank of India will take measures in its quarterly review later this month to perk up the economy and to control inflation, which rose to 0.83 per cent for the third week of September.
Except for the change in the inset letter, the design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series -- 2005, with additional or new security features issued on October 21,2005.
The wholesale price index, coming below four per cent, may prompt the Reserve Bank of India to cut key policy rates. An indication was made by the RBI Governor D Subbarao in Tokyo on Wednesday. During the week, prices of manufactured items such as sugar, imported edible oil and textile items such as cotton yarn got cheaper.
On Monday, RBI announced that 26 entities, including Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital, L&T Finance and Bajaj Finserv, applied for grant of bank licences.
According to fund managers, expectations of a 25-basis-point increase in the cash reserve ratio of banks have heightened in the wake of RBI's surprise twin moves to make short-term money dearer as part of its attempts to curb the rupee's volatility.
The Financial Stability and Development Council members include heads of regulatory bodies like RBI, Sebi and Insurance Regulatory Development Authority.
'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.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
Gokarn was the first Indian central banker who regularised warnings to the government, through the monetary policy statement, on the need to reduce fiscal deficit.
There's need to address growth, but weak rupee putting pressure on prices.
Jaitley has made it a habit of giving soundbytes to the media like his predecessors on why RBI should cut interest rates
The dollar index was up by 0.43 per cent against a basket of six major currencies as euro dropped against the dollar, after quarterly economic reports from France and Germany missed expectations, said analysts.
Tamal Bandyopadhyay discusses his latest book Bandhan: The Making of a Bank at Bandhan headquarters in Kolkata.
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.
From a national point of view, inflation is the biggest threat posed by finance ministers.
Political funding of elections has led to the rise in black money in the economy.
The G20 meeting of the finance ministers and central bank governors beginning July 19 will also be attended by Reserve Bank of India Governor D Subbarao and Deputy Governor Urjit Patel.
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.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
Issuance of new bank licences proves that the apex bank wants the financial sector to flourish.
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The Indian currency had hit record low of 57.32 against a dollar in June last year.
'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.
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Chidambaram said recent measures taken by the Reserve Bank of India were aimed at reducing volatility in the financial market, where the rupee has dropped to record lows.
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The document said potential growth, which hovered at 8-8.5 per cent levels in the period from the second quarter of 2005-06 to the second quarter of 2008-09, has gone down to 6 per cent.
If the new governor can think out of the box even as he signals that he can bat for the RBI cadre and respect its institutional memory, that will go a long way in getting out of the current impasse.
The Reserve Bank of India is not a free agent. It never has been, nor should it ever be.
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
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The Keynesian advice comes after Finance Minister P Chidambaram has said he considers the fiscal deficit at 4.8 per cent of gross domestic product in 2013-14 as a 'red line'.
The RBI has shelved its plan for polymer notes more than a decade after it invited interest from global manufacturers for one billion pieces of Rs 10 denomination polymer banknotes, reveals Tamal Bandyopadhyay.
The central bank's move comes against the backdrop of the government efforts to crackdown on entities, that are illegally raising large amounts of money from the public.
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