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India cuts RBI governor shortlist to four, officials say By Douglas Busvine and Rupam Jain NEW   DELHI   (Reuters) - The government has narrowed down its list of candidates to become the next   governor   of the Reserve Bank of   India   to four, a senior government official told Reuters. A new Monetary Policy Committee also will be chosen soon, the official said. The moves seek to ensure policy continuity after   RBI   chief Raghuram Rajan shocked markets 10 days ago when he announced he would not seek reappointment in September. The failure of negotiations on his possible return had sparked fears that Rajan's departure could put at risk the inflation-targeting central banker's gains in stabilising Asia's third-largest economy over the past three years. Sending a reassuring message to markets, the official said that the list of candidates to replace Rajan had been whittled down to four - three of them central bank veterans, with t...

Why PM Modi should ignore Subramanian Swamy's letter to sack Raghuram Rajan Subramanian Swamy, BJP’s newly nominated member to the Rajya Sabha, recently said that Reserve Bank of India governor   Raghuram Rajan   should be removed from his post. In a fresh salvo at Rajan, Swamy has written to Prime Minister Narendra Modi seeking immediate sacking of the former IMF Chief Economist while alleging he was "mentally not fully Indian" and has "willfully" wrecked the economy. Following up his barb against Rajan at the end of Parliament session last week, Swamy yesterday wrote to Prime Minister seeking termination of Rajan's services with immediate effect. According to Swamy, Rajan has hiked interest rates "in the garb of controlling interest inflation", which has "damaged the country", and that he was responsible for “unemployment and collapse of industrial activity". Read more.

Finance Minister Arun Jaitley's third Budget performed a delicate task of prioritisation: meeting additional spending burdens while staying on the previously announced path of fiscal consolidation. Jaitley kept infrastructure spending elevated while also addressing the slowdown in the rural economy; yet his estimates of increases in tax revenue were generally agreed to be reasonable, with the additional revenue coming from non-tax sources including disinvestment and spectrum auction receipts. This fiscal discipline will have increased pressure on the Reserve Bank of India to cut rates and spark an investment and growth recovery. ALSO READ:  Budget in 2 minutes                          Budget Nuts & Bolts THE KEY ISSUES CORPORATION TAX Option for New manufacturing firms to be taxed at 25%; one-time dispute resolution for retro tax PROVIDENT FUND Future deposits to be taxable in part when withdrawn Show ...

Banks must not wait for growth to clean their balance sheets. Rather, growth will come once the books are cleaned, said Reserve Bank of India (RBI) governor Raghuram Rajan on Thursday. He did so while rapping the lenders for abusing the tools offered by the central bank to fight bad debt, to instead hide the extent of bad loans. The recent clean-up operation has the central government’s blessings, he noted. Central bank officials had a series of meeting with the government, including at the “highest,” before coming up with its asset quality review (AQR) that is now causing havoc in banks’ quarterly numbers, throwing up heavy NPAs in the books, revealed the governor. Read Full Article Over Here :  Business Standard News

It’s not only the  Reserve Bank of India  but top corporate leaders are also worried that the industrial activity is slowing down in the country despite several steps taken by the Narendra Modi government. The main reasons for the slowdown, they say, are the high interest rates, lack of new orders from other companies and the global commodity crash. “This has not come as a surprise to us and we have been talking to the Indian government on this. We do expect some positive changes in Calender 2016,” said promoter of a large infrastructure company asking not to be quoted. “The third quarter results shows marginal rise in profits for the Indian companies which have announced quarterly results so far.  Read Full Article Over Here :  Business Standard News

The Reserve Bank of India (RBI) is expected to leave its key interest rate steady at 6.75% next week and only make one cut this year as rising inflation ties its hands, according to a Reuters poll. That marks a turn from rapidly cooling domestic consumer price inflation, which allowed the RBI to lower the repo rate four times in 2015. Its last 50-basis-point cut in September took markets by surprise, but the RBI isn’t likely to act as aggressively in 2016, as a renewed uptick in food-costs driven inflation puts the central bank’s medium-term price target at risk. This week’s poll of nearly 40 economists showed only one 25 basis-point rate cut this calendar year, between April and June, unchanged from earlier expectations.  Read Articles  

Reserve Bank Governor Raghuram Rajan on Wednesday sought to ease fears amid the stock market plunge and therupee nearing its lowest-ever level, saying things will stabilise and people will look at stable emerging markets, including India. The rupee, Rajan said, has been "relatively strong" in the emerging-market currency basket, but India is affected by the "same kind of jitters" hitting other world markets. "My sense is that, at this point, if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down, keep your fiscal on target, do all the good things, and then people reward you," he said in Davos. ALSO READ: Raghuram Rajan urges Oz firms to invest in Indian market Investors "take the money off the table in a hurry when they are doing it everywhere, but then they come back". "My sense is that after the initial volatility, things will stabilise, people will tr...

The government is soon likely to announce rationalised interest rates on small savings schemes, enabling banks transmit the policy rate reduction by the Reserve Bank of India to borrowers.  Read Articles  

A  Reserve Bank of India  (RBI) committee on financial inclusion has suggested that the government should transfer cash directly to persons instead of giving subsidies, and should replace interest subvention on agriculture loans with affordable universal crop insurance scheme. The committee on medium-term path on financial inclusion, headed by RBI executive director Deepak Mohanty, also recommended linking credit accounts with unique identification number, or Aadhaar number, and share information with credit information companies to enhance stability of the credit system and improve access. The committee was set up in mid-July after Prime Minister Narendra Modi told RBI in its 80th anniversary that a road map should be built to include 90 per cent of India’s unbanked population in the financial fold. The group opined that the most efficient way for an effective financial inclusion is direct cash transfer. Presently, the government gives interest rate subvention of two pe...

Reserve Bank of India  (RBI) Governor Raghuram Rajan has called for closer monitoring of the threat to banks from weakening corporate performance and debt-servicing capabilities of leveraged business groups. “Corporate sector vulnerabilities and the impact of their weak balance sheets on the financial system need closer monitoring,” Rajan said, in his foreword to the Financial Stability Report (FSR) released on Wednesday by RBI on behalf of the Financial Stability Development Council (FSDC). PROJECTION OF SYSTEM LEVEL GNPA RATIOS All signs point to rising stress on bank books Share of large firms in bad loans going up Loans to infrastructure, steel, construction pose risk Banks resilient to withstand shocks backed by capital India Inc’s overall ability to repay debt, as measured by earnings relative to interest owed, improved in the months to September, but the report warned bad debt was becoming more concentrated among large, highly-leveraged borrowers. The pr...