The investigative journalism by cobrapost, their videos, and Monika Halan in Mint add up to an important story. Most of us have enormous respect for the achievements of Axis Bank, HDFC Bank and ICICI Bank. But as Monika emphasises, there are also genuine problems there. We saw it first with the hard-driving mis-selling . . . → Read More: Important work by cobrapost that illuminates high-powered incentives
by Bindu Ananth and Kshama Fernandes
Over 2006-12, RBI and SEBI have created a strong and conducive regulatory environment for securitisation, listing of securitised debt instruments, and standards of transparency and reporting. Securitisation volumes have picked up and we recently witnessed the first listed transaction.
In October 2011, the income tax authorities issued a . . . → Read More: Unanticipated consequences of Finance Bill provisions on securitisation
Ila Patnaik in the Indian Express on the role of the Ministry of Finance in India’s growth. Pratap Bhanu Mehta in the Indian Express on India’s cabinet reshuffle. Anil Padmanabhan in the Mint about how things have changed at MoF after Chidambaram got back.
Bibek Debroy on a major problem that afflicts India today: . . . → Read More: Interesting Readings for August 21, 2012
by Harsh Vardhan.
On 20 June, RBI issued guidelines that permitted White Label ATMs (WLA) to be operated in India. These guidelines could make a very significant change in the banking business – one that would go a long way in improving penetration of banking. This was a move that was long overdue. We . . . → Read More: White label ATMs
by Madhavi Pundit and Suyash Rai
On June 27, RBI published its Payment System Vision Document (2012-15). The document shows RBI’s vision and mission for the payment system, and specifies the objectives, approaches and courses of action emanating from the same. It is a laudable step taken by RBI to discuss its plans for . . . → Read More: RBI vision document on payments: An evaluation
All of us are aware of India’s inflation crisis. It is very disappointing, how we lost our grip on stable 4-to-5 per cent inflation which was prevailing earlier. From February 2006 onwards, in every single month, the y-o-y CPI-IW inflation has exceeded the upper bound of 5 per cent.
All of us agree . . . → Read More: Why is solving India’s inflation crisis important?
Business as usual, in India, is taking us to a destination where RBI & SEBI & company will preside over a minor and inconsequential financial system. The bulk of India-linked finance will take place overseas, and the overseas market will dominate price formation for India-related financial products.
Why might this happen?
Finance is the . . . → Read More: Hollowing out of the Indian financial system
by Shubho Roy and Ajay Shah.
The macroeconomic setting
India’s macroeconomic woes consist of a high inflation, low GDP growth and a drop in asset prices. The loss of momentum is visible in the seasonally adjusted data:
Indicator Early 2009 Latest GDP growth (QoQ, saar) 9.83 Q2-2009 4.25 Q4-2011 Inflation (CPI-IW, pop, saar, 3mma) . . . → Read More: Evaluating responses to India’s macroeconomic crisis
The most important measure of inflation in India is the year-on-year change of the CPI-IW index. This time series, for 120 months, is shown above. From 2006 onwards, India slipped into a new phase of macroeconomic instability, where inflation has strayed far outside the informal target zone of inflation at four-to-five per cent.
. . . → Read More: The inflation crisis has not ended
Reportage by Robin Harding and Michael Mackenzie in the Financial Times:
The rate-setting Federal Open Market Committee predicted low interest rates until late 2014 and set a formal inflation objective of 2 per cent, reflecting chairman Ben Bernanke’s long-held goal of providing greater transparency. The FOMC downgraded its estimate of growth in the coming . . . → Read More: Inflation targeting has come to the US