Regulations
RBI keeps repo, reverse repo, CRR and SLR unchanged

As correctly predicted by Moneylife, the central bank had kept repo, reverse repo, CRR and SLR rates unchanged and said that from now onward its actions would respond to the risks to growth

The Reserve Bank of India (RBI) in its mid-quarterly monetary policy review on Friday, kept the repo and reverse repo rates unchanged at 8.5% and 7.5%, respectively. It also did not revise the cash reserve ratio (CRR), which stands at 6% and the statutory liquidity ratio (SLR) at 24%.

Analysts had opined that in view of the slowdown in the economy on account of rising interest rates and the global situation the central bank may take a pause this time. (Read...RBI may take a pause by keeping policy rates unchanged)

While accepting that there is deceleration in growth due to past monetary policy tightening and domestic policy uncertainties, the RBI, said, “From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth.” 

“However, it must be emphasised that inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. Also, the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead,” the central bank said in a statement.
 
According to the RBI, liquidity conditions have remained in deficit during this fiscal year in consistent with the stance of its monetary policy. However, the deficit increased significantly beginning the second week of November 2011. The average borrowings under the daily liquidity adjustment facility (LAF) increased to around Rs89,000 crore during November-December (up to 15 December 2011) from about Rs49,000 crore during April-October 2011. The Reserve Bank conducted open market operations (OMOs) on three occasions in November-December 2011 for an amount aggregating about Rs24,000 crore to ease liquidity conditions.
 
Allaying the fears of stress in money market, the central bank said there are currently no significant signs of stress as the overnight call money rate are stable around the policy repo rate and liquidity facilities such as marginal standing facility (MSF) remain unutilised. It however, said that in view of the fact that borrowings from the LAF are persistently above the Reserve Bank's comfort zone, further OMOs will be conducted as and when seen to be appropriate.
 
 In October, the RBI, for 13th time since March 2010, increased repo (the rate at which the RBI lends money to banks) and reverse repo (the rate at which the RBI borrows from banks) rates by 25 basis points (bps) each to 8.5% and 7.5%, respectively to control inflation. The series of rate hikes has cumulatively increased interest rates by 525 bps in the last 20 months.
 
WPI inflation moderated to 9.11% year-on-year (y-o-y) in November from 9.73% in October, slightly higher than market expectations due to sharp deceleration in food inflation and stable manufacturing inflation. However, non-food manufactured inflation (which the RBI refers as core inflation) increased in November to 7.9% from 7.6% in October due to an increase in the prices of metals (1.5% month-on-month or m-o-m), chemicals (0.4% m-o-m) and non-metal minerals (0.9% m-o-m).
 
For the week that ended on 3rd December, food inflation fell to a nearly four-year low at 4.35% reflecting a decline in prices of essential items like vegetables, onions, potatoes and wheat. Food inflation, as measured by the WPI, stood at 6.6% in the previous week. It was recorded at 10.78% in the corresponding period last year. This is the lowest rate of food inflation since the week ended 23 February 2008, when it stood at 4.28%.
 
“Both inflation and inflation expectations are currently above the comfort level of the Reserve Bank. However, reassuringly, inflationary pressures are expected to abate in the coming months despite high crude oil prices and rupee depreciation. The growth deceleration is contributing to a decline in inflation momentum, which is also being helped by softening food inflation,” the RBI said in the statement.

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Why politicians want to control the internet?

Politicians want to control the internet because they are worried about internet scams taking over their games. Unfortunately, these scams mostly don't come with guarantees
 
You have recently received e-mails from a lady pretending to be the unfortunate Rajaratnam’s wife, offering a share of the fortune gone adrift; you have probably donated the BMWs and other luxury cars you’ve won thanks to online lotteries. The sad fate of generals from Uganda, gold mine owners from Ghana, displaced princes from Tunisia, have tugged on your heartstrings, and of Liberian Master Sergeants or Iraqi refugees with fortunes spare, there has been no dearth. If you have not, then please emerge from the tree or cave you live in, beware of the Indian builder scam, and join the mainstream.
 
Welcome to the brave new world of internet scams. Every day another one, better than the last—and despite all the adverse publicity—managing to find fresh victims, just like in the fast food industry. There are websites devoted to telling you what to do if you fall prey to them, and then there are websites also telling you how to set them up, as well as enough statistics and data to make you wonder—if they could collect the information, couldn’t they, the law enforcement agencies, stop them too? Apt question—if all crime were suddenly magically wiped clean from the face of this earth and the screen of your computer, then what would they, the cops, do? Just doing bandobast and VVIP duty doesn't get them any real tangible benefits, though telling people to idhar jao, udhar jao must be fun—especially on sunny winter days.
 
Face it, internet crime, like all other crimes in the world, has arrived, and may very soon find an honourable place on the list of top-100 best corporate governance or turnover or other interesting aspects kind of business magazine lists, just like the AMRI hospital in Kolkata did. After that, if they haven’t done so already, then PR companies, publicists and lobbyists will complete the task, assuring all of us that internet crime is as safe and good for mankind as smoking single farm tobacco, eating refined flour cooked in double refined oil and using triple sets of mobile phones hooked to our ears all the time.
 
An interesting bit of information on internet crime is that the single largest source country for these scams appears to be the US, followed closely by UK, China and the rest. India is sometimes in the top-10, sometimes not, which appears to be, as always, a case of discrimination against India by the colonial powers trying to make their devilish presence back into India. Down with the imperialist running dogs, while at the same time, beware the red and yellow menace too. Maybe if we let unrestricted foreign direct investment (FDI) for retail into India, then, we might make the top-10. Imagine how wonderful that would be for the economy.
 
And now, one of the latest internet scams to come across our screens, has probably heard of the Honourable Kapil Sibal’s outburst against the vileness of all that happens on the Internet, which we are at times inclined to agree with—look at, for example, what passes of for news on some of the live television channels now also being replicated on the internet. If there is any rule of law in this country, then the first thing is that live television should be banned on the internet, we spend considerable energy and effort in switching the television off and now they have the same stuff on the internet? A time has come where if we really want to know what the news is, we have to go and see some newsworthy movies, like "Dirty Picture" for example. That is, certainly, extremely informative.
 
Thing is, unfortunately, these scams don't come with guarantees. Mostly. So when we received this new internet scam, we immediately thought about, what else, the guarantees our political parties make before elections. Here’s what this scam said: “NOTE: We are not personal but a big company. We have our company policy: If you need test before purchase, we need to see each other on webcam first, then we will consider your request and provide about 50,000 fresh samples. If you want to buy directly without test, webcam is not necessary.”
 
What the scam is in itself is not important. Nor do we really wish to popularise it. What is important is that we seem to have finally understood why our politicians want to control the internet. In reality, it seems they are worried about internet scams taking over their games, and if you read the message carefully again, you will understand—for all work, big or small, there has to be a face –to-face meeting.
 
You give the money in advance, no need of meeting, work will be done.
 
You want a guarantee, we need to see your face, analyse your payment capabilities—and you can pay afterwards, after a small sample.
 
Did internet scams like this learn from our politicians, or was it the other way around?

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COMMENTS

sudha naik

5 years ago

I am a regular viewer of moneylife site and find many of their articles interesting.
But this one is really an exception. I completely support Mr. Niranjan. This article doesnt have any co relevance with the subject.
Its a mockery of journalism..dont understand how some have found a meaning out of it..!
- S Naik

REPLY

niranjan

In Reply to sudha naik 5 years ago

chalo koi toh hamare saath sehemath hai..!

niranjan

5 years ago

GOD SAVE THE WORLD !

subhendu mukherjee

5 years ago

Dear Veeresh

We love your articles. Pls ignore the idiot
who is posting these rubbishy comments.
hopefully moneylfe will delete them.
or maybe let them be, because they only show the guy to be a bit of a twit.
Ignore him and dont respond to his mindless comments.

niranjan

5 years ago

what kind of an idiot author is this ??

how the heaven hell.. can u compare online screening of content on social media sites with some spam spoof email, which today are no more than a joke ?

politicians just want to make sure.. that no truth comes out on the internet.. and becomes viral.. defaming their images..

moneylife should be sued for hiring such idiot authors.. and spreading illiteracy !!

REPLY

malQ

In Reply to niranjan 5 years ago

Niranjan ji, thank you for writing in.

My apologies since it is more than apparent that you are indeed disappointed with this essay. The idea was to try to show how you can not fool (or please) all of the people all the time. Shall try and make the next article simpler, but then my other readers may accuse me of being a simpleton.

Oh dear, what can be done?

Regards/VM

niranjan

In Reply to malQ 5 years ago

did kapil sibbal pay u to write this crap ??
u are actually saying that the govt is trying to screen online social content and save the people from scams !
moneylife itself seems a scam to me now !
u are actually going ahead and saying online news content should be banned.. cos u have already watched it on TV... ?
u are either a moron... or has got paid well to write this sheer crap..
to add to it.. u also managed to add FDI in the khichdi..!
GOD SAVE THE WORLD !

malQ

In Reply to niranjan 5 years ago

Dear Niranjan ji,

Thank you for writing in. It is only with feedback from erudite readers like you that I hope to improve myself.

Would you care to please read the article again, maybe in a lighter vein or moment? Alternately could you please let me know how you would like it presented, if the idea was subtle mockery and black humour?

Have a nice weekend, and unwind, please.

Regards/VM

Next year will be challenging for IT companies: TCS

“Agility is going to be a very important for the sector. Every passing year is more challenging than the coming year and most (companies) think to turn these challenges into opportunities,” TCS executive director and CFO S Mahalingam said

Mumbai: The depreciation in rupee’s value is likely to benefit software exporters, but the global macro economic situation will pose a challenge for the industry next year, reports PTI quoting a top official of IT giant TCS.

“This year has gone very well and better than what we expected. Next year it will be some kind of stressful environment and every government will try to avoid the Lehman kind of situation,” Tata Consultancy Services executive director and CFO S Mahalingam told reporters on the sidelines of a CII event here.

The rupee movement has been very volatile and in the long-term, this depreciation is likely to benefit the IT industry (largely dependent on the US market) as a whole, he said.

“The rupee movement has been going like a ‘yoyo’.

It’s a roller coaster ride. For longer term it might be good for my kind of industry.” 

This quarter (Oct-Dec) TCS hedged the rupee at 46.5 per dollar and next quarter it will be 47.5, but after that it is open, he said.

The global macro economic situation has been the major concern for the industry and it will continue to remain a challenge next year, he said.

“Agility is going to be a very important for the sector. Every passing year is more challenging than the coming year and most (companies) think to turn these challenges into opportunities,” he added.

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