SBI organizes 2nd ‘Banking & Economics Conclave’ 2015

Mumbai, India, Aug 20: State Bank of India (SBI) today successfully concluded the 2nd SBI Banking & Economics Conclave 2015. This Conclave was organized with an intention to stimulate debate and critical thinking on various topic related to banking industry in India. The Conclave was inaugurated by Hon. Minister of Finance Shri Arun Jaitley and Minister of State, Finance Mr Jayant Sinha. The Conclave was graced by dignitaries from a wide spectrum of business activity like banking, financial institutions, corporate, law and Government. The high and mighty of Indian corporate - Mr. Baba Kalyani, Ms Kiran M Shaw, Ms Chanda Kochhar; Justice (Retd.) A K Ganguly from judiciary, Mr. Amitabh Kant, Secretary, DIPP and others graced the occasion on Second day.

Chairman SBI in her opening  session with RBI Governor, Dr Raghuram Rajan discussed various issues like payment banks, state of the economy, etc. The Governor in turn emphasized on project evaluation and structuring by banks, issues of HR in banking such as providing higher compensation to top management and its impact on costing. Can ESOPs help retain talent in public sector banks was also discussed.

There were four panel discussions during the day. The first panel discussed the topic: Agenda to rev up growth. According to this panel, to rev up growth there is a need to take measures on ease of doing business. Infrastructure spending is imperative to India’s growth. Nurturing critical talent, scaling up innovation and use of digital technology will drive growth in sectors, in particular, pharmaceuticals and manufacturing.

The second panel discussion was: Judiciary and Banking-The Missing Link. The panel discussion concluded that there is an urgent need to bring the forefront, judicial reform discussion in much greater way than earlier. Adjournments, transparency, accountability and use of IT solutions are some of the key areas where judicial infrastructure needs immediate attention. Banks must ensure that their legal contracts keep abreast with judicial pronouncements.

The third panel discussion was on capital raising for banks in the context of BASEL III norms. The panel was of the view that India needs to tap all sources of capital, be it foreign or domestic. However, some panelists were of the view that BASEL III norms may depress the Return on Equity going forward, which may in turn constrain the future capital raising exercise. Some panelists also felt that profit alone is the starting point for PSBs and profitability and efficiency will require a fine balancing act in future.

The fourth panel of economists discussed the current macroeconomic challenges beyond CPI and Repo Rate. This panel discussed a numbers of issues such as labor productivity, capital intensity of Indian economy, health sector reforms, exchange rates and exports growth. In particular, the panel noted that demographic dividends should be properly used to augment our growth potential.

Read the rest of this entry

RBI cuts repo-rate and CRR by 25bps

The Reserve Bank of India has cut the interest rate by 25 bps on Tuesday, as speculated. The Cash Reserve Ratio was also cut to 4 per cent from 4.5 per cent, by cutting down 25 bps.

The RBI has also cut the repo-rate by 25 basis points to 7.75 per cent from 8 per cent, for the first time since April 2012. The ease in the monetary policy will boost the Indian economy.

The cut in CRR will help to infuse around 1.80 billion rupees into the economy.

Speaking to media, the governor of RBI, Duvvuri Subbarao told that the soften in the headline inflation was the major factor leading for a cut in the interest rates by 25 basis points.

The headline inflation was at 8.1 per cent in the September 2012 and dropped to 7.2 per cent in December 2012.

The GDP was recorded 5.5 per cent in the first quarter and dropped to 5.3 in the second quarter.

The stock markets - BSE Sensex and NSE Nifty gained following the rate cut declared by the RBI.

Read the rest of this entry

RBI Keeps Interest Rates Unchanged

The central bank of India - Reserve Bank of India did not change the key interest rates while reviews its credit policy on Tuesday. The short-term lending (repo) rate and the Cash Reserve Ratio (CRR) will remain at 8 per cent and 4.25 per cent, respectively.

Considering the slide in the headline inflation rate for the month of November 2012, the RBI kept the interest rates intact. The stock markets were in flat following no change in the interest rate.

However the Governor of RBI, D Subbarao hinted for a change in repo-rate and CRR in January 2013.

Read the rest of this entry

RBI Governor Subbarao gets two-year Term Extension

The Reserve Bank of India's Governor, Duvvuri Subbarao will serve two more years as the Prime Minister has approved a two-year extension from September 5. It is believed that the major decision has been taken following flux in global financial markets. The PMO confirmed about the extension of tenure of Subbarao through a statement on Tuesday.

Due to the downgrade of US economy by the S&P the reaction was heavy across the world stock markets. The current economic crisis or equity meltdown is a serious threat for the most of the global economies.

However, RBI on Monday assured of no adverse impact to the Indian economy following the economic crisis.

Read the rest of this entry