RBI panel for tighter reporting norms for derivatives

The report of the working group set up by the RBI suggested that Clearing Corporation of India should be made the repository of all interest rate and forex derivative transactions

Mumbai: In order to improve transparency and avoid build up of a financial crisis, a Reserve Bank of India (RBI) panel on Wednesday suggested tighter norms for reporting and monitoring of interest rate and forex derivatives, reports PTI.

The report of the working group set up by the RBI suggested that Clearing Corporation of India (CCIL) should be made the repository of all interest rate and forex derivative transactions.

The report, on which RBI has invited comments from the stakeholders by June, underlines the “need for consolidation of reporting arrangement with a view to improving the transparency of the market, facilitating its comprehensive monitoring by the regulator and improving the efficiency of post trade processing infrastructure.”

Non-transparency of the over-the-counter (OTC) market, the report said, “Results in build-up of risks in the system which is widely believed to be one of the contributory causes of the recent financial crisis.”

It suggested that all forward transactions and swaps between banks and their clients, worth over $1 lakh, should be reported to the CCIL.

As a trade repository, CCIL should be encouraged to offer post trade processing services, such as, valuation, management information system and life-cycle event management, the report said.

It also suggested that reporting framework could be extended to other complex financial products as and when they are introduced.

RBI had set up a committee under the chairmanship of P Krishnamurthy, the then chief general manager, to examine the reporting format for inter-institution transactions and recommend modalities for an efficient single point reporting mechanism for all OTC interest rate and foreign exchange derivative transactions.

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Food inflation rises to 8.55% for week ended 14th May

Food inflation, which was on a declining trajectory for the previous three weeks, rose by 1.08 percentage points in the week under review over the 7.47% inflation rate recorded in the previous week

New Delhi: Food inflation shot up to 8.55% for the week ended 14th May, the highest level in four weeks, as prices of fruits, cereals and protein-based items escalated, reports PTI.

Food inflation, as measured by the Wholesale Price Index (WPI), was on a declining trajectory for the previous three weeks. The figure for the seven-day period under review was 1.08 percentage points higher than the 7.47% inflation rate recorded in the previous week.

During the week ended 14th May, cereals became costlier by 5.03% year-on-year and prices of onions were up by 8.32%, official data released here showed.

Prices of fruits rose by 32.37%, milk by 5.53% and eggs, meat and fish by 8.26%.

Rice also became 2.63% more expensive and potatoes 0.17% costlier on an annual basis.

Food inflation remained in double digits for most of 2010, before showing signs of moderation from March 2011.

Prices of vegetables and pulses declined by 1.46% and 9.49%, respectively. Also, wheat became cheaper by 0.30% on an annual basis.

On an annual basis, the primary articles category saw an inflation rate of 11.60%. On the other hand, prices of non-food primary articles were up 23.22% during the week under review. Fibres became dearer by almost 61%, while minerals were up 11.78%.

The government and Reserve Bank of India had said that in the months to come, inflationary pressure would be more from core (non-food) items on account of high global prices of commodities, particularly crude.

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COMMENTS

Julia

6 years ago

Food inflation is caused due to ethanol blending. Large parts of agricultural land are dedicated to ethanol production for blending instead of food. Besides that Ethanol lowers fuel milage, wrecks the engine and makes food expensive. We should stop ethanol blending program completely.

Centre mulls demolition of Union Carbide factory

“Though the state government and NGOs wants to preserve a part of the factory from where the gas leaked as monument, the Centre and the Group of Ministers on the Bhopal gas tragedy want to raze the building of the Union Carbide factory due to mercury contamination,” Union environment minister Jairam Ramesh said

Bhopal: The Centre is contemplating to demolish the building of the now defunct Union Carbide factory here due to mercury contamination, Union environment minister Jairam Ramesh said on Wednesday.

“Though the state government and NGOs wants to preserve a part (of the factory) from where the gas leaked as monument, the Centre and the Group of Ministers (GoM) on the Bhopal gas tragedy want to raze the building of the Union Carbide factory due to mercury contamination,” he told reporters here.

However, a final decision in this regard will be taken only in July-August after the state government and NGOs present their case before the Centre, he added.

Mr Ramesh said that the state government and the NGOs were free to put their point across and make a presentation against flattening of the Union Carbide factory’s building.

Over 15,000 people were killed and lakhs maimed after methyl isocyanate gas leaked out from the Union Carbide factory in December 1984.

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