Economy
No target or band set for rupee: Gokarn

RBI says its policy on intervention not only aims at quelling the excessive volatility, but also attempts to moderate speculative one-way downward movement of the rupee

 
Mumbai: Reserve Bank of India (RBI) will intervene in the forex market only to curb excessive volatility in exchange rate but stated there is no target set for rupee, deputy governor Subir Gokarn said, reports PTI.
 
"Our approach has been that the exchange rate of the rupee should be market determined and the Reserve Bank should be intervening only to manage excessive volatility... without targeting any particular level or band," Gokarn told an RBI-ADB conference on 'Managing capital flows'.
 
From a short-term perspective, the decision to intervene in order to avoid destabilisation of both exporting and import-competing producers needs to be viewed in the overall context of domestic conditions.
 
He further said the RBI policy has been articulated as broadly "non-interventionist", except when confronted with excessively volatile and lumpy or disruptive flows.
 
He also said the policy on intervention not only aims at quelling the excessive volatility, but also attempts to moderate speculative one-way downward movement of the rupee.
 
The rupee was the worst performer amongst the 25 leading global currencies last month losing over 4.2%.
 
Since September 2011, rupee has lost 19% and has been the second worst performer amongst the BRIC currencies year to date after the Brazilian real.
 
Today, however, the local unit gained 10 paise to end at 55.06 to the dollar against a two-month low it hit last Friday at 55.16. In late June this year, the rupee sunk to its life-time low of 57.15.
 
Talking about lessons learnt from volatile capital flows, Gokarn said the drivers of the currency volatility become more dominant if current account deficit is high.
 
Therefore, "addressing the domestic drivers of currency dynamics holds key to rupee stabilisation," he said.
 
On corporates concentrating on forex gains to boost profits, Gokarn said, companies should be concentrating more on their core business to generate returns rather than looking to generate profits from diversifying into trading in forex markets.
 
Incidentally, many companies and even banks reported good bottomlines in the second quarter which was partly attributable to gains made by them in forex market.
 
He also said banks are expected to show caution while offering forex derivatives to companies as firms enter into such transactions without fully understanding the downside implications of such deals.
 

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RBI cancels licence of Ghaziabad Urban Cooperative bank

RBI also asked the UP commissioner of Cooperation and Registrar of Cooperative Societies to issue an order for winding up Ghaziabad Urban Cooperative Bank as well as appoint a liquidator for the bank

 
Mumbai: The Reserve Bank of India (RBI) has cancelled the licence of Ghaziabad Urban Cooperative Bank as it had become insolvent, reports PTI.
 
"In view of the fact that Ghaziabad Urban Cooperative Bank, Ghaziabad (UP), had ceased to be solvent and with all efforts to revive it having failed ... the Reserve Bank of India delivered the order cancelling its licence to the bank on 16 November 2012," RBI said in a notification today.
 
RBI said it has asked the commissioner of Cooperation and Registrar of Cooperative Societies of Uttar Pradesh government to issue an order for winding up the bank as well as appoint a liquidator for the bank.
 
RBI had granted it a licence in April 1997.
 
Consequent to the cancellation of its licence, Ghaziabad Urban Cooperative Bank is prohibited from carrying on banking business including acceptance and repayment of deposits, it added further.
 

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Moneylife Foundation hosts RTI Workshop for advanced users

Former CIC Shailesh Gandhi cited several specific orders that participants could quote in certain situations and several useful tip for filing appeals in a highly interactive session for advanced users

 

Shailesh Gandhi, former Central Information Commission (CIC) with the highest record of disposing cases advised RTI (Right to Information) users to make better use of the inspection provision during the appeal process, as the chances of getting information is better.  He was speaking at Moneylife Foundation’s second Right to Information Act, 2005 (RTI) workshop for regular users of RTI.  Mr Gandhi dwelt on common misconceptions of RTI provisions among participants as well as information officers and offered a wealth of information as well as tricks and tips on how to succeed in the appeal process and avoid delays in getting information. 
 
Interestingly, Mr Gandhi who has the record of highest disposal of cases at the CIC and is the first activist to become a central information commissioner, constantly stressed that activists must keep their language civil, avoid rambling applications and not take an adversarial attitude towards public information commissioners (PIOs) or at the appellate hearings. He also advised activists to focus on getting information rather than teaching PIOs a lesson. He said that when making complaints citizens should make a demand for compensation. Mr Gandhi suggested that the demand for compensation should be small—Rs1,000 to Rs.2,000. He advised that citizens should not focus on the penalty aspect very aggressively. As far as penalty was concerned the Commissioner has to decide whether the delay in providing information was reasonable or not, which is a subjective assessment. Sometimes, it becomes difficult to spot the officer responsible for the delay. However if the Commissioner has decided that the there was no reasonable cause for delay, the penalty had to be imposed at Rs250 per day of delay.
 
Mr Gandhi provided plenty of examples and anecdotes from his own vast experience of disposing cases to help participants use the RTI Act effectively and to succeed in the appeal process through smart strategizing. One suggestion was to quote previous orders of the CIC. He cited several specific orders that participants could quote in certain situations. 
 
The provisions of RTI are contained in Section 8(1), which Mr Gandhi devoted much of the session time. It is the contents of this Section that one’s RTI query can be refused. He also gave several examples of how PIOs refuse RTI queries. The most common excuse by information officers for arbitrarily refusing information is that they hold it in a fiduciary capacity. He advised participants to go through the Central Information Commissioner Judgement (CIC/SG/A/2012/000857/19484) in order to get the background of a case where fiduciary relationship refusal was overturned in favour of the appellant. 
 
Likewise, Mr Gandhi said that Section 8(1)(h) of the RTI Act was also another commonly abused provision.  The RTI Act said that information can be refused on the grounds that “information which would impede the process of investigation or apprehension or prosecution of offenders” can be refused. The keyword here is ‘impede’ and most PIOs misuse this word. If an RTI query is turned down based on this ground, the PIO must give the reason how and why it impedes an investigation. Mr Gandhi cited case number: CIC/SG/A/2012/000365/18351, and advised participants to use this as a background while filing an appeal in order to ask for the reasons caused. 
 
He said that there are no appeal fees nor is there any particular format for filing to the CIC. However, he said that filing a second appeal is a long-drawn out process and will take as much as two years. He advised participants to maintain a repository of all the RTI queries, appeals in an orderly fashion so that they can easily refer to it and retrieve information. 
 
Before he touched upon the issues of appeals, he gave a brief background on the evolution of the RTI. He said, “Freedom of expression without the Right to Information is meaningless”, citing the importance of information in a diverse democratic country like India. He said that information must exist if one has to file an RTI, without which no information will be given. Information usually exists in public domain and on public records.
 
Towards the end of the session, he talked about the recent Supreme Court verdict and how it affects the legitimacy of the RTI Act. He said that unless we, Indian citizens, protest the RTI Act and RTI as a consumer empowerment tool is in danger of becoming redundant or even irrelevant.
 
Mr Gandhi will conduct two more workshops for Moneylife Foundation members in December, the first is for beginners an the second for regular RTI users. For those who have missed this session and would like to enroll for future sessions, check this page or call us. Besides, you can access videos of past Moneylife Foundation events on our Moneylife TV channel on YouTube over here
 
If you’d like to empower yourself, do join Moneylife Foundation for free. It costs nothing and you will be part of one of the fastest growing communities in India. Click here to join Moneylife Foundation and get a free ebook, if you haven’t already. 
 
Details of all other events can be found over here
 

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