Last week, at the Mint’s 10th Annual Banking Conclave in Mumbai, one question was common for both former Reserve Bank of India (RBI) governor D. Subbarao and the current chiefs of large India banks: what do they expect from the union budget? Subbarao wants the government to stick to the fiscal consolidation path but most bankers (not all) want India’s finance minister to focus on growth, even if that means a slightly expansionary budget. Chiefs of the three biggest state-owned banks also said they would like the budget to take note of the capital requirement of banks.
On 15 January, at least 42,000 runners lined up at the starting point of the Standard Chartered Mumbai Marathon, the largest road-run event in Asia. Jaspal Bindra, who came up with the idea in 2004, was nowhere to be seen. In 2016 too, he was not around.
In October 2003, Romesh Sobti, then executive vice-president of ABN Amro Bank (now he heads IndusInd Bank Ltd) took the Indian mortgage market by storm, announcing home loans at 6% in the first year and 6.5% in the second year—around 1.75 percentage points lower than the prevailing home loan rate, offered by larger banks and housing finance companies.
A finance ministry statement on Saturday said that “the government fully respects the independence and autonomy of the Reserve Bank of India”. It’s very reassuring to hear this. There have been talks on the Indian central bank’s autonomy being compromised in various circles against the backdrop of the so-called demonetization move—how the decision to replace 86% of the currency in circulation was taken in Asia’s third-largest economy and the way it has been implemented.
This is from the diary of a branch manager of an Indian bank. He lives in the Mumbai suburbs, takes a local train to work and usually heads back home by 7pm. Life took a different turn after Prime Minister Narendra Modi made the historic announcement of a currency swap on 8 November.
Banks and mortgage firms in India are in a rush to cut loan rates in the aftermath of the deluge of deposits in the past two months. By a rough estimate, around 86% of the Rs17.3 trillion currency in circulation—Rs14 trillion—consisting of Rs1,000 and Rs500 currency notes, was banned on the midnight of 8 November, prompted by the government’s resolve to fight black money, terror financing, counterfeit notes and push for a cashless economy.