Last week, the Reserve Bank of India (RBI) asked all banks to integrate their core banking solutions with the SWIFT messaging network by 30 April. Just ahead of that, the banking regulator announced setting up a panel, headed by noted chartered accountant and a former long-serving director on the central bank’s board Y.H.
Just two employees of a bank branch can empty its cash vault. In most public sector bank branches in India, a pair of keys of the strong room is kept with the cash officer and the accountant in the branch; if both collude, they can empty the vault. To topple a bank, at least three persons need to conspire—the so called maker, checker and verifier or authorizer of SWIFT messages.
On Tuesday evening, the CEOs of some of India’s biggest banks were on a panel discussing the changing banking landscape, at Mint’s annual banking conclave at a south Mumbai hotel. Ahead of this, they had been ushered into the speakers’ lounge where they were expected to pore over the finer points of the evening’s discussion over coffee and cookies. Instead, most of them seemed busy checking e-mails and text messages on their mobile phones and trying to figure out, in hushed voice, what was happening to the bids for troubled steel-maker Bhushan Steel Ltd, one among the 12 cases identified by the Reserve Bank of India (RBI) in the first round in June 2017 for bankruptcy proceedings.
Against the backdrop of fiscal slippages, rising oil prices, shooting US treasury yields and pressure on inflation, none could have expected a better monetary policy than what Indian central bank presented on Wednesday. It has left its policy rate unchanged at 6% even as the stance remained neutral. The tone of the policy is cautious, but less hawkish than what most analysts were expecting.
No one, including Indian government’s chief economic adviser Arvind Subramanian, is expecting the Reserve Bank of India (RBI) to lower its policy rate this week when the monetary policy committee (MPC) meets. RBI had last cut the policy rate in August, from 6.25% to 6%.
The equity market shrugged off the 10% LTCG tax (the smart move of sparing all gains up to 31 January 2018 prevented a sell-off) proposed in the budget, but the bond market could not stomach the fiscal slippage. The yield on 10-year benchmark paper fell 18 basis points to 7.605% as prices dipped.