Why RBI is at loggerheads with the government
6 years, 5 months ago

Why RBI is at loggerheads with the government

Live Mint  

A growing rift between India’s central bank and the government has been many months in the making. In the latest move, the Reserve Bank of India made its disagreement with authorities public in a hard-hitting speech by Deputy Governor Viral Acharya on Friday — which he said had the backing of Governor Urjit Patel — defending the central bank’s independence. The central bank opposes this idea and says the government is undermining it’s independence by asking for a greater share of surplus at a time when there is a need to make the RBI’s balance sheet stronger. “Having adequate reserves to bear any losses that arise from central bank operations and having appropriate rules to allocate profits including rules that govern the accumulation of capital and reserves is considered an important part of central bank’s independence from the government,” Acharya said on Friday. Last year, then chief economic adviser Arvind Subramanian criticized forecasting errors by the inflation-targeting central bank, which he said are “large and systematically one-sided in overstating inflation.” Those comments came after members of the Monetary Policy Committee headed by Patel didn’t attend a meeting with finance ministry officials before a policy rate meeting.

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RBI to focus on better customer service and protection, says governor Malhotra
2 days ago

RBI to focus on better customer service and protection, says governor Malhotra

Live Mint  

Mumbai: The Reserve Bank of India will push for wider financial inclusion and enhancing customer service and protection, governor Sanjay Malhotra said on Tuesday. “We shall strive to foster a culture of continuous improvement in customer services and strengthening customer protection,” Malhotra said at an event commemorating 90 years of the central bank. “As we mark this milestone, we recognize …

Realign policies of RBI to changing economic realities
3 weeks, 4 days ago

Realign policies of RBI to changing economic realities

New Indian Express  

Under the new leadership, the Reserve Bank of India is ‘undoing’ some of the measures taken during the previous regime to allow the banking system to breathe easy. By the time Sanjay Malhotra took the reins of the central bank from Shaktikanta Das in December last year, India’s growth had slowed down to 5.6 percent, and the equity market was …

Growth slowdown: Why lay a deeper economic malaise at RBI’s door?
3 months, 2 weeks ago

Growth slowdown: Why lay a deeper economic malaise at RBI’s door?

Live Mint  

Chapter 16 in the Book of Leviticus, Old Testament, enjoins Aaron to organize sacrifices and expiate the sins of all Israelites. Various ministers, government officials and sundry industry representatives have been hinting at RBI culpability in India’s economic slowdown and have called upon its monetary policy committee to cut rates in support of growth. The debate began with this year’s …

Why RBI is central to the country’s economy
3 months, 2 weeks ago

Why RBI is central to the country’s economy

New Indian Express  

The art of setting interest rates Maintaining macroeconomic stability and financial stability is the holy grail of any central bank. The pursuit of sustainable growth and low and stable inflation have been fundamental to central banking activities since the early 19th century, though financial stability got equal prominence, thanks to black swan events like the Great Depression of 1930s and …

To-do list for RBI’s new boss
3 months, 3 weeks ago

To-do list for RBI’s new boss

Times of India  

It is as the world is weighing what Trumponomics will mean this time around, that Sanjay Malhotra becomes the 26th man to helm India’s central bank. A further context is how RBI’s role is evolving to meet its target to become the model central bank across the Global South. The new governor also takes charge as monetary policy across the …

New RBI guv must keep macro picture in sight
3 months, 3 weeks ago

New RBI guv must keep macro picture in sight

Hindustan Times  

The Reserve Bank of India is one of India’s most illustrious institutions. In 2016, the Centre added another mandate to RBI’s responsibilities, controlling inflation in the economy. India's Press Information Bureau/Handout via REUTERS The change of guard in Mint Street, with Sanjay Malhotra replacing incumbent Shaktikanta Das, comes at a point where the central bank has been steadfastly holding interest …

DC Edit | RBI’s booster shot to economy
10 months, 1 week ago

DC Edit | RBI’s booster shot to economy

Deccan Chronicle  

The Reserve Bank of India transferred a whopping amount of Rs 2.1 lakh crores to the Central government as a dividend payout, giving a booster shot to volatile stock markets. The current payout is 141 per cent higher than the ₹87,416 crores that the RBI had given the Central government last year and is Rs 1.1 lakh crores more than …

RBI can take global leadership in balancing growth and inflation control: Narendra Modi
1 year ago

RBI can take global leadership in balancing growth and inflation control: Narendra Modi

The Hindu  

The Reserve Bank of India having achieved the unique feat of balancing growth and inflation control, can become a model for the world and take global leadership, Narendra Modi, Prime Minister of India, said on Monday while speaking at a function to mark the commemoration of RBI’s 90th year in Mumbai. Stating that balancing inflation control and growth was a …

Reimagining how the Reserve Bank functions
2 years, 2 months ago

Reimagining how the Reserve Bank functions

Hindustan Times  

The Supreme Court judgment on demonetisation last week appears to have reignited the debate on the relationship between the Reserve Bank of India and the Union government. The parliamentary committee wants to ensure that financial regulators such as RBI are adequately prepared to support India’s growth journey, the chair of the committee, Jayant Sinha, said in an interview to Mint …

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good
2 years, 7 months ago

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good

ABP News  

A big bang approach to privatisation of state-run banks may do more harm than good, according to the latest Reserve Bank of India bulletin released on Thursday. The RBI’s paper showed some of the major reasons that public sector banks can serve the country better than private banks include better financial inclusion, better credit system, and better efficiency of the …

A weakening balance sheet may explain RBI’s rate actions
2 years, 10 months ago

A weakening balance sheet may explain RBI’s rate actions

Live Mint  

Mounting inflation concerns do not adequately explain the urgency behind the Reserve Bank of India’s decision to conduct an out of turn monetary policy meeting on 4 May. Rising interest rates, however, are increasing yields of US government bonds, which forms the bulk of foreign securities on RBI’s balance sheet as investments. The revaluation account, which is on the liability …

Here’s how RBI is thinking about its own blockchain platform
4 years ago

Here’s how RBI is thinking about its own blockchain platform

Live Mint  

NEW DELHI/MUMBAI : India’s upcoming digital currency will minimize transaction settlement processes by using a private blockchain platform, making transactions more cash-like and giving the central bank tighter control over the functioning of the financial system, said two people aware of the matter. A private blockchain governed by a central bank is different from the public blockchains behind digital currencies …

Blockchain Good, But 'Major Concerns' About Cryptocurrency: RBI Governor Shaktikanta Das
4 years, 1 month ago

Blockchain Good, But 'Major Concerns' About Cryptocurrency: RBI Governor Shaktikanta Das

News 18  

Shaktikanta Das, governor of the Reserve Bank of India, said earlier today that the central bank has voiced concerns around the viability of cryptocurrencies with the Indian government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required the Parliament also will consider and …

RBI has 'major concerns' over cryptocurrencies: Governor Shaktikanta Das
4 years, 1 month ago

RBI has 'major concerns' over cryptocurrencies: Governor Shaktikanta Das

India Today  

The Reserve Bank of India has “major concerns” about cryptocurrencies, Governor Shaktikanta Das said on Wednesday, flagging potential risks to financial stability. “We have major concerns from the financial stability angle,” Das told news channel CNBC-TV18 in an interview, adding that the RBI was “targeting to launch” a digital currency. “In order to ensure that there is financial stability we …

Needed: A new relationship contract between RBI and govt
4 years, 7 months ago

Needed: A new relationship contract between RBI and govt

Live Mint  

Two recent books, one by former Reserve Bank of India governor, Urjit Patel, and the other by former RBI deputy governor, Viral Acharya, have reignited the debate on central bank autonomy in India. Section 30 of the RBI Act for instance, allows the government to “supersede” the RBI central board. The third lever of government control lies in the composition …

A battered IndusInd Bank lays bare RBI’s financial stability challenge
5 years ago

A battered IndusInd Bank lays bare RBI’s financial stability challenge

Live Mint  

India’s private sector banks are facing their toughest test yet with a virus outbreak putting their earnings at risk, even as the collapse of a peer bank raises questions on deposits. The bank’s stock dropped 15% on Tuesday after the lender revealed in an investor call that it has lost 10-11% of its deposits since Yes Bank Ltd crumbled earlier …

The design of RBI limits its abilities
5 years ago

The design of RBI limits its abilities

Deccan Chronicle  

The Reserve Bank of India, India’s central bank, performs vital functions that are essential for keeping the Indian economy in robust health. Recently, the RBI has found itself lurching from one crisis to another as financial institutions such as non-banking financial corporations, cooperative banks and commercial banks collapsed like dominos one after the other. The RBI draws its powers from …

RBI likely to follow April-March financial year from 2020-21 to align with Centre; proposal sent to govt for approval
5 years, 1 month ago

RBI likely to follow April-March financial year from 2020-21 to align with Centre; proposal sent to govt for approval

Firstpost  

Accordingly, the RBI’s April-March financial year system in line with the Central government will be effective from 2020-21 and a proposal in this regard has been forwarded to the government for its nod, said a release. The Reserve Bank of India may follow April-March fiscal year, instead of the current July-June financial year system after the central bank’s board recommended …

Opinion | An RBI in lockstep with the government
5 years, 1 month ago

Opinion | An RBI in lockstep with the government

Live Mint  

Various commentaries will be written about the Reserve Bank of India’s repo rate, liquidity framework and assessment of growth impulses in the economy, but what its policy statement of Thursday actually reveals is a monetary authority marching in lockstep with the government’s fiscal policy. Popular opinion and wisdom now place greater responsibility on RBI for stimulating growth impulses than is …

Opinion | The limits of what RBI can do for the economy
5 years, 5 months ago

Opinion | The limits of what RBI can do for the economy

Live Mint  

On Friday, the Reserve Bank of India cut its policy rate for the fifth time in a row. Since February this year, RBI has slashed repo rates by as much as 135 basis points. To start with, policy transmission remains a bugbear, despite RBI’s efforts to have its cuts translate into cheaper and more plentiful loans for businesses, households and …

PMC Bank crisis ’eye opener’, RBI looking into lapses: Anurag Thakur
5 years, 6 months ago

PMC Bank crisis ’eye opener’, RBI looking into lapses: Anurag Thakur

Live Mint  

Terming the Punjab and Maharashtra Cooperative Bank crisis as an "eye opener", Minister of State for Finance Anurag Thakur on Monday said the banking sector regulator RBI is looking into various aspects, including lapses on part of auditors. It also raises question mark on role of various people whether it is regulator, auditors, directors and other officials," he said on …

Opinion | An easy surrender of the country’s economic defences
5 years, 7 months ago

Opinion | An easy surrender of the country’s economic defences

Live Mint  

The global economy is admittedly in a strange place and even the usually reliable experts are struggling to decode an evolving economy and the central bank’s place in it. To address this new normal, we are conducting a public review of our monetary policy strategy, tools, and communications.” Coincidentally, the same day Lawrence Summers and Anna Stansbury published a Project …

Government should use RBI funds in a prudent manner
5 years, 7 months ago

Government should use RBI funds in a prudent manner

The Hindu  

After a long tug of war, the government has eventually had its way with the Reserve Bank of India, managing to get it to part with a portion of its accumulated reserves. The RBI board, on Monday, decided to transfer a massive ₹1,76,051 crore to the government, including a sum of ₹52,637 crore from its contingency reserve built over the …

RBI can pay interim dividend to govt in exceptional cases: Jalan panel
5 years, 7 months ago

RBI can pay interim dividend to govt in exceptional cases: Jalan panel

Live Mint  

Mumbai: A Reserve Bank of India panel, led by former governor Bimal Jalan, has recommended that the central bank pay interim dividend to the government, a practice that started in 2016-17, only under exceptional circumstances. The Jalan committee has also recommended that RBI’s capital framework be reviewed every five years and its accounting year be aligned with the fiscal year …

Opinion | The return of excess capital is RBI’s indirect mea culpa
5 years, 7 months ago

Opinion | The return of excess capital is RBI’s indirect mea culpa

Live Mint  

The decision of the central board of the Reserve Bank of India to transfer ₹1.76 trillion of excess reserves this fiscal year to the government is the right one, even though we will see critics tut-tutting all the way. ₹1.76 trillion looks like money for jam even after banks are recapitalized with ₹70,000 crore upfront, and some additional resources are …

Is RBI's Rs 1.76 lakh crore payout to govt to boost fledgling economy?
5 years, 7 months ago

Is RBI's Rs 1.76 lakh crore payout to govt to boost fledgling economy?

India Today  

The government's long-term demand for more money from RBI was fulfilled on Monday. The Reserve Bank of India transferred Rs 1.76 lakh crore, including Rs 52,600 crore of excess capital to the central government account. Where this payout comes from The windfall gain of Rs 1.76 lakh crore from RBI to the government is the outcome of framework change. Last …

RBI has done its dharma, now it needs to be careful about karma
5 years, 7 months ago

RBI has done its dharma, now it needs to be careful about karma

Live Mint  

The credit for the phenomenal drop in retail inflation, India’s biggest headache over the past several years, goes to its central bank. Indeed, as former governor of the Reserve Bank of India D. Subbarao said, it is the central bank’s dharma to manage inflation and RBI has delivered on it. This could also infuse confidence and in turn assist in …

Opinion | Need a strategy that goes beyond interest rates
5 years, 7 months ago

Opinion | Need a strategy that goes beyond interest rates

Live Mint  

The factors that are slowing growth are piling up. Simply put, the liquidity problems in India’s non-banking financial companies are not going away any time soon, and gross domestic product growth is slowing due to a long list of domestic and international challenges. “Credit-less” recoveries are generally considered rare around the world given that it’s hard to fund growth without …

Opinion | Reserve Bank of India’s new sweeping powers
5 years, 8 months ago

Opinion | Reserve Bank of India’s new sweeping powers

Live Mint  

It always takes a crisis in India to correct what is egregiously wrong and should have been rectified in the normal course of governance. Examples abound: Stock market reforms undertaken only in the aftermath of the Harshad Mehta scandal, the beginning of reforms in non-banking financial companies after the collapse of CRB Finance, legacy systems in the government securities market …

Urjit Patel blames govt, RBI and banks till 2014 for bad loan mess
5 years, 8 months ago

Urjit Patel blames govt, RBI and banks till 2014 for bad loan mess

Live Mint  

Mumbai: Failures of the central bank, the government and state-run lenders in the years till 2014 sparked India’s bad loan crisis, former Reserve Bank of India governor Urjit Patel said, while putting up a strong defence of the actions of RBI under his watch. In the speech—Patel’s first since quitting RBI in December amid a confrontation with the government over …

RBI Financial Stability Report: There is good news and bad news, but where is the plan of action?
5 years, 9 months ago

RBI Financial Stability Report: There is good news and bad news, but where is the plan of action?

Firstpost  

The Financial Stability Report is a very important document on the financial sector as it analyses threadbare the overall state of the various segments as well as highlights the risk-related issues that have been identified which can cause potential challenges. The FSR is happy with the state of the banking system as the gross non performing asset ratio is 9.3 …

Opinion | RBI, the world’s model central bank? Just maybe
5 years, 9 months ago

Opinion | RBI, the world’s model central bank? Just maybe

Live Mint  

India is becoming the gold standard for monetary policy in Asia, if not the world. While global markets are giddy from hints that the Federal Reserve may cut interest rates, India’s central bank has been easing since February. Passive inflation and the central bank’s full tank of gas make the case to cut even stronger. Thursday’s quarter-point reduction in the …

Opinion | RBI, the world’s model central bank? Just maybe
5 years, 9 months ago

Opinion | RBI, the world’s model central bank? Just maybe

Live Mint  

India is becoming the gold standard for monetary policy in Asia, if not the world. While global markets are giddy from hints that the Federal Reserve may cut interest rates, India’s central bank has been easing since February. Passive inflation and the central bank’s full tank of gas make the case to cut even stronger. Thursday's quarter-point reduction in the …

Points of conflict
5 years, 10 months ago

Points of conflict

The Hindu  

The story so far: On April 26, the Supreme Court directed the Reserve Bank of India to disclose to the public the names of wilful defaulters on loans and also other information gathered by the central bank during its annual inspection of commercial banks. In January 2016, the RBI refused to comply with demands made by activists under the Right …

Opinion | An intruder undermines RBI
6 years, 1 month ago

Opinion | An intruder undermines RBI

Live Mint  

Bankruptcy proceedings usually involve protecting a firm’s assets from creditors. The ruling by the bankruptcy court, which is overseeing the government- Already India has lost two RBI governors because, among other things, they dared to ask banks to acknowledge problem loans in time, classify them correctly and make adequate provisions for losses. Already-delayed Indian tribunal proceedings will stretch forever, with …

Opinion | RBI’s cut goes beyond a political narrative
6 years, 1 month ago

Opinion | RBI’s cut goes beyond a political narrative

Live Mint  

Monetary policy is usually formulated under the shadow of various influences. Multiple shadows have cast a pall over Shaktikanta Das’s maiden monetary policy as Reserve Bank of India governor and the Indian central bank’s sixth and last one for 2018-19. The shadow of imminent elections looms largest over the political economy, especially after the interim budget’s unabashed display of courtship …

Government turns to RBI for help before elections
6 years, 2 months ago

Government turns to RBI for help before elections

Live Mint  

Pressure is building on India’s central bank to pay part of its profits to the government before a crucial election due by May, providing Prime Minister Narendra Modi with cash to boost spending and voter support, while keeping the budget deficit in check. While new Governor Shaktikanta Das said earlier this month that no decision had been made yet on …

RBI accountable to govt, differences must be resolved internally in country’s interest: Bimal Jalan
6 years, 2 months ago

RBI accountable to govt, differences must be resolved internally in country’s interest: Bimal Jalan

Firstpost  

The government also wants the RBI to release more liquidity to the shadow banking sector and relax its provisioning norms for banks. New Delhi: The Reserve Bank of India is accountable to the government and should make policies within the framework set by the government, according to a former central bank chief now heading a panel tasked with framing guidelines …

RBI is accountable to the government, says Bimal Jalan
6 years, 2 months ago

RBI is accountable to the government, says Bimal Jalan

Live Mint  

New Delhi: The Reserve Bank of India is accountable to the government and should make policies within the framework set by the government, according to a former central bank chief now heading a panel tasked with framing guidelines for the transfer of the RBI’s surplus funds to the government. Bimal Jalan, the 77-year-old ex-bureaucrat, was appointed to chair the panel …

Bimal Jalan to head panel to decide on RBI cash reserves: Former central bank governor enjoys govt support, but committee to have final say
6 years, 3 months ago

Bimal Jalan to head panel to decide on RBI cash reserves: Former central bank governor enjoys govt support, but committee to have final say

Firstpost  

Jalan will lead a six-member committee which will review the status, need and justification of various provisions, reserves and buffers presently provided for by the RBI The Reserve Bank of India on Wednesday formed an expert committee on economic capital framework led by former RBI governor Bimal Jalan to determine the amount of reserves it needs to keep and the …

Much ado about nothing: Demystifying the needless hue and cry over the RBI
6 years, 3 months ago

Much ado about nothing: Demystifying the needless hue and cry over the RBI

Op India  

“The only function of economic forecasting is to make astrology look respectable,” remarked the legendary Economist John Kenneth Galbraith. Whoever in Congress thought of RBI autonomy and role in influencing election outcome doesn’t have enough knowledge to even make credible sounding arguments. According to the RBI Act’s Section 7, “the central government may from time to time give such directions …

Opinion | Finding the right balance at the central bank
6 years, 3 months ago

Opinion | Finding the right balance at the central bank

Live Mint  

The regrettable mechanics of the recent change of guard at the Reserve Bank of India raises some important questions, some long overdue, about the institution’s accountability, transparency and autonomy, and the relevance of having a governor with a strong backbone. The new approach internalised that the adoption of modern monetary management in India also favoured individuals with strong macroeconomics- or …

Facts, No Fiction: There’s a new sheriff in RBI
6 years, 3 months ago

Facts, No Fiction: There’s a new sheriff in RBI

Op India  

This week has been a roller coaster ride, from high profile extradition cases, the resignation of the RBI governor and the results of recent assembly elections. That being said, it is well acknowledged that India has one of the tightest of monetary policies and that too at a time where inflation seems to be significantly lower than even RBI’s estimates. …

Amidst speculations over Govt-RBI stand off, Jaitley asks how a mere discussion be considered ‘destruction’ of an institution
6 years, 3 months ago

Amidst speculations over Govt-RBI stand off, Jaitley asks how a mere discussion be considered ‘destruction’ of an institution

Op India  

Finance Minister Arun Jaitley, while speaking at the Times Networks India Economic Conclave today, stated that though there are ‘two or three areas of differences’ between the RBI and the Government, how a mere discussion on its functioning could be considered “destruction” of an institution. Amidst allegations by the opposition that his government has created a situation wherein the Reserve …

Explainer: Role and responsibilities of Reserve Bank of India
6 years, 3 months ago

Explainer: Role and responsibilities of Reserve Bank of India

Live Mint  

Mumbai: RBI Governor Urjit Patel unexpectedly resigned Monday, bringing into prominence the role played by the central bank in the country’s economy. Following is an explainer on the functions and responsibilities of the RBI:- Role of Reserve Bank of India: - The central bank issues and regulates currency notes. RBI decides benchmark interest rate: - A six-member Monetary Policy Committee, …

RBI vs Govt: Timeline of events leading to Urjit Patel resignation
6 years, 3 months ago

RBI vs Govt: Timeline of events leading to Urjit Patel resignation

Live Mint  

The following is a timeline of the events in the government- RBI spat, leading to Patel’s sudden resignation 8 Aug, 2018: Government appoints die-hard Sangh ideologue S Gurumurthy, and cooperative banker and Swadeshi supporter Satish Marathe to the RBI’s central board as independent directors. Mid-Sep: Government cuts short the term of RBI central board member and noted banker Nachiket Mor, …

Government to run power play at next RBI board meeting on 14 December; tensions likely to re-surface
6 years, 4 months ago

Government to run power play at next RBI board meeting on 14 December; tensions likely to re-surface

Firstpost  

Like the government, most board members feel that RBI should be “more transparent and accountable” for its decisions Mumbai/ New Delhi: For all the cordiality on show at the end of Reserve Bank of India’s last board meeting, tensions could re-surface when it next gathers on 14 December as the government aims to ramp up pressure for changes in the …

RBI-govt spat: Uneasy calm prevails as both sides seek to cool down temperatures, but rift far from over
6 years, 4 months ago

RBI-govt spat: Uneasy calm prevails as both sides seek to cool down temperatures, but rift far from over

Firstpost  

At the RBI board meeting on that day, neither side actually blinked on the issue of transferring reserves from the RBI to the government’s accounts In the Cold War era, they called it détente : but 19 November was not for the first time that there was an easing in the strained relations between the Reserve Bank of India and …

Govt wants to discuss RBI ‘governance issues’ with it
6 years, 4 months ago

Govt wants to discuss RBI ‘governance issues’ with it

Hindustan Times  

The Centre wants to discuss changes to the Reserve Bank of India’s governance structure at a board meeting next month, including setting up some oversight panels, economic secretary Subhash Chandra Garg told a news channel. The proposals to discuss governance at the RBI’s December 14 board meeting may further inflame tensions between the finance ministry and central bank. Worsening tensions …

Govt does not need money from RBI in next 6 months, says Arun Jaitley; 'respect autonomy' of central bank
6 years, 4 months ago

Govt does not need money from RBI in next 6 months, says Arun Jaitley; 'respect autonomy' of central bank

Firstpost  

Critics accuse the government of trying to undermine the RBI’s authority, but Finance Minister Arun Jaitley said his government respected the institution’s independence. Mumbai: The government does not need money from the Reserve Bank of India in the next six months,finance minister Arun Jaitley said in a TV interview telecast on Friday, rejecting Opposition charges the government was seeking access …

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