Regulations
Rajan asks staff to ensure RBI not seen as paper tiger
Mumbai : Reserve Bank of India Governor Raghuram Rajan, in a New Year message to all colleagues, asked them to ensure that the central bank is not seen as a paper tiger that is able to act against only the small and weak wrong-doer.
 
"My sense is that we need a continuing conversation about tightening both detection as well as penalties for non-compliance throughout the hierarchy. We cannot be seen as a paper tiger," he wrote.
 
"Not only are we accused of not having the administrative capacity of ferreting out wrongdoing, we do not punish the wrong-doer unless he is small and weak", he said.
 
"This belief feeds on itself. No one wants to go after the rich and well-connected wrong-doer, which means they get away with even more. If we are to have strong sustainable growth, this culture of impunity should stop," he added.
 
Noting that the country is often described as "a weak state", Rajan said that curbing the culture of impunity, however, "does not mean being against riches or business, as some would like to portray, but being against wrong doing".
 
"As the premier and most respected regulator in the country, we should take the lead. We have motivated staff with the highest integrity at every level. Yet there is a sense that we do not enforce compliance," he said.
 
He also wondered whether the RBI was permitting regulated entities to get away with poor practices even though these are noted during inspections.
 
"Should we haul up accountants who do not flag issues they should detect?" Rajan asked.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 
 

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COMMENTS

MG Warrier

11 months ago

This year’s New Year Message from RBI Governor to his ‘colleagues’ is a unique document which can form the basis for HR-related reforms in government and organisations across public and private sectors in India.
The RBI Annual Report 2014-15 also had the Rajan touch and did express several concerns which needed support from GOI to enable RBI to perform effectively. Strangely, media (both electronic and print) which usually give broad coverage to RBI’s Annual Reports in the past did not take adequate notice of the report. Of course, the annual report is with GOI and hopefully, appropriate action will be taken on issues flagged therein.

TIHARwale

11 months ago

yes Raghuram Rajan has atleast realised the empire he is presiding has failed in its duties as a watch dog . already we r seeing how failure on RBI inspections has allowed PSB to fudge NPA figures so this itself will tell that RBI inspectors got easily wined and dined by corrupt PSB executive who successfully managed RBI inspection team

HDFC says MF investments in its debt instruments at 3.9%
Investment by mutual funds in non-convertible debentures and commercial paper issued by HDFC is 3.9%, the housing finance company says
 
Housing Development Finance Corp Ltd (HDFC) said the investment by mutual funds in its non-convertible debentures (NCDs) and commercial paper is below the limit stipulated by market regulator Securities and Exchange Board of India (SEBI).
 
HDFC, in a regulatory filing, said, "As at 31 December 2015, the total amount invested by mutual funds in non-convertible debentures and commercial paper issued by HDFC Ltd is 3.9% of the total debt asset under management (AUM).  The single issuer limit stipulated by SEBI for mutual funds is 10% of the net asset value of a scheme."
 
The SEBI Board in its meeting Monday inter alia proposed certain amendments to the prudential limits on investments in debt instruments by mutual funds. The single sector exposure limit stipulated by SEBI for mutual funds is 30% of the net asset value of a scheme for NBFCs, inclusive of 5% for housing finance companies (HFCs).
 
As per SEBI's data on Deployment of debt funds monthly report for December 2015, the total debt AUM of mutual funds stood at Rs8,80,672 crore. Further, as per this data, the exposure of mutual funds to NBFCs is Rs1,31,391 crore which constitutes 14.9% of the AUM.   

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Nifty, Sensex to put in a small rally – Tuesday closing report
Nifty may head higher if it stays above 7,500
 
We had mentioned in Monday’s closing report that Nifty, Sensex decline may end soon and that if Nifty holds above 7,500, it may head higher over the next few days. The Indian stock markets continued to be bearish for one more day but the losses were small and about 0.58%-1.76% lower than Monday’s close. The trends of the major indices during Tuesday’s trading are given in the table below:
 
 
Caution over third-quarter results, coupled with anxiety over the upcoming macro-data points subdued the Indian equity markets on Tuesday. This led to the BSE Sensex to decline by 173 points. Initially, both the bellwether indices of the Indian equity markets made modest gains as investors were attracted by a sizeable number of stocks that are trading near their yearly lows. Besides value buying, short covering amidst thin volumes led to the morning relief rally. However, both the indices soon ceded their gains, as anxiety was stroked by the third quarter (Q3) results which will start coming in from Tuesday. Amongst the companies which will release their Q3 results on Tuesday are information technology (IT) major Tata Consultancy Services (TCS), Federal Bank and IndusInd Bank. In addition, long-liquidation positions and lacklustre Asian markets, too, dented investors' sentiments. Caution also prevailed over the upcoming domestic macro-data on industrial output, and retail inflation. Both the data points are slated to be released on Tuesday.
 
As global oil prices continue their plunge into the New Year, the Indian basket of crude oils closed trade on Monday at a 12-year low of $28.73 a barrel, according to official data released on Tuesday. The Indian basket had touched a previous monthly low of $28.66 in August 2003. Crude oil prices maintained their relentless fall, as US West Texas Intermediate (WTI) traded early on Tuesday at $30.66 per barrel and Brent crude futures declined to $30.66, their lowest since April 2004. Brent and WTI have declined on every day of trading this year with markets expecting supply to surpass demand. Marking a 13-year low, the price of the Organisation of Petroleum Exporting Countries (OPEC) basket of twelve crudes stood at $27.07 a barrel on Monday, compared to $28.56 on the previous Friday, the organisation's secretariat said. Analysts like Barclays, Macquarie, Bank of America-Merrill Lynch, Societe Generale and Standard Chartered Bank (SCB) all cut their oil price forecasts for this year on Monday, with the latter saying that prices could fall to as low as $10 a barrel.
 
China's stocks closed higher on Tuesday, with the benchmark Shanghai Composite Index up 0.2%, at 3,022.86 points. The smaller Shenzhen index gained 0.8% to close at 10,293.7 points, reports Xinhua. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, rose 1.95% to close at 2,147.53 points.
 
The central parity rate of the Chinese yuan weakened by two basis points to 6.5628 against the dollar on Tuesday, according to the China Foreign Exchange Trading System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2% from the central parity rate each trading day, according to Xinhua. 
 
Japanese shares ended the morning session sharply lower on Tuesday with the Nikkei index plunging over two percent on declining oil prices and poor performances in other stock markets. The 225-issue Nikkei Stock Average tumbled 375.40 points, or 2.12%, from Friday to 17,322.56, Xinhua news agency reported. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 34.15 points, or 2.36%, to 1,413.17.
 
The markets outlook for India this year is contingent on consumption demands, corporate earnings and inflation trends, American ratings agency Moody's said on Monday. "India enters 2016 on the cusp of a cyclical growth recovery, with inflation under control and the economy benefiting from lower commodity prices," Moody's associate managing director Atsi Sheth said in a note. "Market trends will depend on whether inflation remains under control and corporate profits revive," she said. Citing a projection of a boost in demand post-implementation of the recommended pay revision for central government employees and pensioners, and a potential upturn in agriculture, Moody's said a broad-based pick-up in investment will only unfold with a time lag. "We believe that these advantages will only yield sustainable growth acceleration once corporate and bank balance sheets are repaired, and if the private sector remains internationally competitive," Sheth said. She said inflation and corporate profit trends will offer clues as to whether these efforts have created conditions for growth that are sustainable over the next 3-4 years. Sheth's report also said low inflation may indicate a greater balance between domestic demand and supply conditions, and would help private sector remain globally competitive.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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COMMENTS

Sanjeev Dhabre

11 months ago

Hello MLF, whats your view on 8Kmiles, you might be aware that they are into cloud computing and cloud computing is in demand.

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