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Life after savings bank deregulation

Life after savings bank deregulation

Hours after the Reserve Bank of India (RBI) freed savings bank rate last week, Yes Bank Ltd raised the rate by 2 percentage points and Kotak Mahindra Bank Ltd followed suit over the weekend. No other banks have responded yet to this move, but many fear there will be a rate war to woo savings bank depositors. If indeed that happens, consumers will benefit and banks’ cost of funds will rise.

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D Subbarao | We will not cut rates even if inflation drops to 7%

D Subbarao | We will not cut rates even if inflation drops to 7%

Mumbai: Reserve Bank of India (RBI) governor D. Subbarao on Tuesday ruled out a reversal in the Indian central bank’s monetary policy even if inflation drops to 7% by March 2012 and remains at that level for months. After presenting the quarterly review of monetary policy to bankers, Subbarao said in an interview, “It’s not clear what would be the triggers and what would be the macroeconomic environment that would prompt a reversal (of the policy),” but it will be a wrong inference that RBI will start cutting rates when inflation drops to 7%.

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RBI may cut estimate for growth; rate hike likely

RBI may cut estimate for growth; rate hike likely

There is a consensus among analysts and economists that the Indian central bank will pare its projection for the economy’s growth in fiscal 2012 when it announces its second-quarter review of monetary policy on Tuesday, but not too many of them want the Reserve Bank of India (RBI) to raise its policy rate yet again, even though the wholesale price inflation continues to remain high, way beyond RBI’s comfort level. The growth projection will probably be cut to 7.5% from 8%, and none, including Union finance minister Pranab Mukherjee, will be surprised by that.

Bankers Trust:

RBI may cut estimate for growth; rate hike likely

RBI may cut estimate for growth; rate hike likely

There is a consensus among analysts and economists that the Indian central bank will pare its projection for the economy’s growth in fiscal 2012 when it announces its second-quarter review of monetary policy on Tuesday, but not too many of them want the Reserve Bank of India (RBI) to raise its policy rate yet again, even though the wholesale price inflation continues to remain high, way beyond RBI’s comfort level. The growth projection will probably be cut to 7.5% from 8%, and none, including Union finance minister Pranab Mukherjee, will be surprised by that.

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Why bond yields are rising

Why bond yields are rising

What the Reserve Bank of India (RBI) is struggling to achieve through multiple rate hikes in the past 20 months, the Indian government has done at one stroke—by announcing a 32% increase in its borrowing plan for the second half of the current fiscal year. The yield on the benchmark 10-year bond rose to a new three-year high of 8.79% on Friday, a level last seen before the collapse of US investment bank Lehman Brothers Holdings Inc.

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Neeraj Swaroop | IDR is not a misadventure

Neeraj Swaroop | IDR is not a misadventure

Mumbai: Neeraj Swaroop, regional chief executive officer of Standard Chartered Bank, India and South Asia, sees strong working capital-led credit growth but corporations are not forthcoming for long-term credits, especially for new projects. The trend will be more pronounced next year but “we are starting to see some of the signs of slowdown,” he said. In an interview, Swaroop also strongly defended the UK bank’s decision to float Indian depository receipts and said there is no Reserve Bank of India (RBI) probe into the bank’s alleged involvement in buying shares of Tamilnad Mercantile Bank and it does not hold more than 5% stake in the bank.