Industry bodies have also urged RBI to revisit its guidelines on securitisation and priority sector lending as industry players, especially NBFCs, are facing fund crunch, apart from raising the cap on NBFCs' exposure to mutual funds
Mumbai: Non-banking finance companies (NBFCs) and asset infra finance companies have asked the Reserve Bank of India (RBI) to further liberalise foreign borrowing norms for them to tide over fund crunch, reports PTI.
Financial market players like NBFCs, the Finance Industry Development Council (FIDC), the Fixed Income Money Market and Derivatives Association (Fimmda), Foreign Exchange Dealers' Association (FEDAI), the Primary Dealers Association, among others, met the RBI top brass, including Governor D Subbarao, this evening at the customary pre-policy meeting.
"We requested the Governor to look at relaxing the external commercial borrowings (ECB) norms for NBFCs and asset financing companies," FIDC Director General Mahesh Thakkar told reporters after the meeting.
He said that the industry bodies have also urged RBI to revisit the guidelines on securitisation and priority sector lending as industry players, especially NBFCs, are facing fund crunch, apart from raising the cap on NBFCs' exposure to mutual funds.
Leading NBFC L&T Finance president N Shivraman said while conveying the industry's concerns about fund crunch, as banks have not passed on the benefit of the rate cuts by RBI in April to borrowers, they urged the central bank to relax the ECB norms for them.
"The RBI needs to help us to diversify our funding sources," Shivraman said.
The draft report of the Usha Thorat committee on NBFCs, submitted in August 2011, had called for tighter rules for NBFCs in terms of provisioning, lending and capital adequacy ratios, to help avert possible risks to the financial system.
The RBI set up the committee because unlike banks, whose exposure to realty and stock markets are tightly regulated, NBFCs don't have stringent rules on sectoral lending and group-wise exposure, enabling them to lend more liberally against shares and also for realty.
The industry, however, argued today that it was facing considerable fund crunch and sought liberalised borrowing norms to raise funds from overseas.
Gokarn, who is in-charge of the monetary policy at the RBI, said it is important for the monetary policy to focus on inflation control
Mumbai: Reserve Bank of India (RBI) deputy governor Subir Gokarn has said that monetary policy should be focused on containing inflation as lower prices can support sustained growth in the long term, reports PTI.
"It is important to keep inflation under control to support a sustained process of growth," Gokarn told a banking summit.
Citing historical anecdotes of central banks focusing on growth and the negative consequences thereof, Gokarn, who is in-charge of the monetary policy at the central bank, said it is important for the monetary policy to focus on inflation control.
The comments from the deputy governor come a day after government data said inflation rose up to a 10-month high of 7.81% in September and a fortnight ahead of the second quarter monetary policy announcement on 30th October.
Incidentally, Reserve Bank Deputy Governor Anand Sinha had said the scope of monetary policy has expanded beyond inflation targeting to factors like checking financial imbalances.
"The monetary policy has an expanded objective...It has a larger role than simple inflation targeting," Sinha had said.
Responding to a query, Gokarn, who was addressing a banking meet organised by the Financial Times and Yes Bank, conceded that the monetary policy should not alone be responsible for taming inflation and it needs to be complemented by the fiscal policy and supply side factors.
"It would be great if fiscal and supply side policies also help to keep the inflation pressure down," he said.
On the impact of the third round of stimulus by the US, Gokarn said it has not led to a surge in commodity prices as yet unlike earlier rounds and welcomed it as a "relief" for the country.
The vice-presidential debate between Joe Biden and Paul Ryan dwelt on foreign policy and the issue of abortion, among others. But a new poll shows that Romney has caught up with the president. Let’s see who wins...
Joe Biden’s left-right was answered by Paul Ryan’s right-left as the two contestants went toe-to-toe for an hour and a half in a debate moderated by Martha Raddatz of ABC News who conducted the debate ably giving both contestants time to speak and also interrupting them when they went on too long. Paul Ryan was wearing a red and blue tie which I thought was a sign that like the governor, he too would be moving to the Centre. While Paul Ryan softened his tone, sometimes considerably, he held onto his views.
Joe Biden went for Paul Ryan from the word go and particularly drew a chuckle and a laugh when he pointed out that Paul Ryan himself had asked for some stimulus money for his constituents in Wisconsin, a stimulus which he opposed, and Paul Ryan had to admit that that was the case. He seemed a little bashful. Paul Ryan deflected Governor Romney 47% comment rather adroitly by saying that as the vice-president knows sometimes words don’t come outright referring to the vice-president’s proclivity for gaffes. And Biden came back by saying but I always mean what I say.
The debate was quite heavy on foreign policy, given that the moderator was from ABC News and does a lot of war reporting and Paul Ryan held more than his own when it came to showing his mastery of foreign policy. He was well-informed and took the attack to vice-president Joe Biden, particularly on the mess in Benghazi, but on many occasions had to agree that Romney-Ryan would do the same things as Obama-Biden. Joe Biden put Paul Ryan on the back-foot when it came to ending one war in Iraq as also ending the war in Afghanistan saying that Romney would have kept 30,000 troops in Iraq and wasn’t sure he would end the war in Afghanistan by 2014. Ryan criticised Biden for his inability to negotiate a long-term pact with Iraq and sounded less hawkish when it came to Israel and Iran and the nuclear bomb. He thought that sanctions would be the best way to go forward but accused the Obama administration for weakening sanctions and resisting them. This sounded a little disingenuous as Ryan postponed the deadline and did not talk about a possible war with Iran.
But the most interesting and possibly most important part of the debate was the issue of abortion—both Biden and Ryan are Catholics. The moderator asked as to how their Catholic faith has formed their view on abortion. Paul Ryan said that the policy of Romney-Ryan administration would be to oppose abortion except in the case of rape, incest and where the life of the mother was at stake. He said he was pro-life but these exceptions were part of the policy. He further hinted that he was in favour of a reversal of the iconic Supreme Court case of Roe Vs Wade which has been called a constitutional right to abort in the first trimester of pregnancy. He said that he would prefer to leave the issue of abortion to the legislature of various states, which would be a reversal of the position since 1973. Though conservative pollsters opine that this is not the most important issue for women and is only fifth on their list of priorities I think in an election which is going to be decided by women it could play a crucial role. After 1973, Roe Vs Wade would has come to be regarded almost a fundamental right and Paul Ryan offered them no solace during the vice-presidential debate. As Joe Biden pointed out that Roe was a vote or two from reversal and another Scalia appointed by Romney could change the majority in Roe. This was of course the fear also when Sandra Day O’Conner was appointed and she and justice Antony Powell controlled the court.
The New York Times said in its editorial that it could end up criminalising abortion in much of the United States. But Ryan made it personal. He said that when nine-and-a-half years ago when their son was conceived, he and his wife went for a sonography when the foetus was eleven weeks after conception and was as small as a bean. Ryan said, “You could hear the heart beat”. The words put like that were a powerful pro-life statement.
A new Gallup poll shows that Governor Romney has caught up with President Obama as far as the women’s vote goes. If that is indeed true President Obama’s re-election will be in trouble.
(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)