The Financial Inclusion Advisory Committee under RBI Deputy Governor K C Chakrabarty is expected to suggest appropriate regulatory framework to ensure that financial inclusion and financial stability move in tandem, the RBI said in a statement.
Whistle-blowing website Cobrapost.com on Saturday slammed the clean chit given by the Reserve Bank of India to the money-laundering practices exposed by it in ICICI Bank, HDFC Bank and Axis Bank. The website had revealed how the top private banks in India helped encouraged money laundering by helping traders convert black money to white.
State Bank Chairman Pratip Chaudhuri's call last week for abolishing the mandatory cash reserve ratio had attracted a sharp reaction from RBI Deputy Governor K C Chakrabarty. CRR is the amount of deposits that banks park with the RBI as a prudential measure without earning interest on it.
Deputy Governor K C Chakrabarty says monetary policy to ease once inflation comes down.
Since taking over at RBI on September 4, Governor Raghuram Rajan has twice hiked the repo rate -- at which the central bank lends to banks -- to 7.75 per cent, seeking to tame inflation.
In its quarterly monetary policy review, RBI had last month retained the CRR at 4.75 per cent and reduced the statutory liquidity ratio -- the amount of deposits banks park in government bonds -- by 1 per cent to 23 per cent, effective August 11.
These suggestions were made by Finance Minister Pranab Mukherjee in his address at a meeting with chief executives of the public sector banks, which among others, was also attended by RBI Deputy Governor K C Chakrabarty.
Banks generally lend to potential customers, primarily corporate clients, at much lower rates below their benchmark prime lending rate, which is often termed as sub-PLR rates.
Discounting the argument that gold is a hedge against inflation, the senior-most Deputy Governor wondered how a hedge instrument can offer as high as 37 per cent return year after year.
He also said that unless inflation comes down interest rate cannot be reduced.
In the first two quarters of 2012-13, banks referred a record number of 74 CDR cases, involving a total debt amount of Rs 40,000 crore.
At a time when the Micro Finance Institutions (MFIs) have drawn flak due to steep interest rates charged by them, the Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty has categorically stated that such institutions cannot play any role in financial inclusion.
ICICI Bank Chairman K V Kamath on Thursday disagreed with the suggestion of SBI chief Pratip Chaudhuri that RBI should scrap CRR, saying it is part of the monetary policy and no issue can be made of it.
The Reserve Bank on Friday said the option of going for another round of rate hike at its next mid-quarterly policy review in September do exist as inflationary pressure continues in the economy.
The Reserve Bank and the government has contingency plans to deal with the situation if Greece exits the Eurozone, RBI Deputy Governor K C Chakrabarty said on Friday.
After having raised its key policy rates 10 times in a year-and-a-half to check inflation which remains stubborn, the Reserve Bank of India said on Friday it has no magic wand to bring down the rate of price rise.
Inflation may come down to RBIs projections, if it does not we will have to take steps, RBI deputy governor K C Chakrabarty said on the sidelines of an event organised by Confederation of Indian Industry and Suresh Neotia Centre of Excellence.
The Reserve Bank on Monday ruled out full rupee convertibility as of now and said the failure of Bharti-MTN deal cannot hasten it.
Defending the rate hike announced on Friday, he said short-term growth could be scarified for long-term growth. "Absolutely, we will raise rates even before the policy dates if inflation goes up. The RBI governor is continuously watching the situation. Unproductive demand has to be curtailed. It is up to banks to increase the rates, but RBI is giving the signal that there is a need for rates to go up if you have to anchor inflationary expectations," Chakrabarty said after an
The RBI, which started exiting its easy money policy stance since October last, is widely expected to hike key short-term lending (repo) and borrowing rates (reverse repo) by 0.25 per cent at its quarterly policy review on July 27.
With inflation surging into double digits, the Reserve Bank of India on Tuesday said it may take monetary action to tame the rising prices ahead of the scheduled review of the policy on July 27.
The wholesale price index-based inflation, which neared double-digit level in February, has probably peaked and was likely to decline as the country expected a good winter crop and drop in oil prices, RBI Deputy Governor K C Chakrabarty told reporters on the sidelines of a function in Bangalore on Monday.
"The expectation is that the erratic monsoon may put pressure on inflation," RBI Deputy Governor K C Chakrabarty told reporters on the sidelines of a meeting of regional rural bank chiefs with Finance Minister Pranab Mukherjee.
Punjab National Bank CMD K C Chakrabarty has quit his post after his appointment as RBI Deputy Governor. "K C Chakrabarty has demitted office on June 14, 2009 on his appointment as Deputy Governor, Reserve Bank of India," PNB said in a filing to the Bombay Stock Exchange.
RBI's exercise will take into account standards of governance, the viability of the payment bank (PB) business model, and changes, if any, if needed.
With inflation turning positive after 13 weeks, the Reserve Bank on Thursday said the wholesale price index may rise to six per cent by this fiscal end a development that may pose challenges to the central bank in maintaining a stable monetary policy.
Experts interviewed CMDs of nine public sector banks on Friday and Kamath is believed to be in the reckoning
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A rule change may make Nachiket Mor, among others, eligible to replace Chakrabarty.
RBI has already come out with a discussion paper on banking sector in India, on which the regulator has invited comments from stakeholders.
The Reserve Bank could consider setting up of a Fraud Registry on the lines of Credit Information Bureau to check criminal activities in the financial sector.
In spite of the high decibel financial inclusion drive being carried out for the past three years, a Crisil study has revealed stark disparities in the spread of banking services, saying the top six cities are home to an astonishing 11 per cent of bank branches.
'It is like bombing a building with 200 people to kill 5 terrorists.'
Head of state-run Indian Bank T M Bhasin had called for a CRR cut.
'RBI and the economy will gain tremendously from Urjit Patel's experience in both private and public sectors'
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