1. RBI
governor Duvvuri Subbarao met finance minister P Chidambaram on Thursday to
discuss the macro-economic situation ahead of the January 29 monetary policy
review of the bank. The next quarterly review policy is scheduled for Tuesday.
The RBI is scheduled to announce the third quarter review of the monetary
policy for the financial year 2012-13 on January 29. The Indian central bank is
widely expected to cut key policy rates by at least a quarter a percent to
boost economic growth. In the previous review announced on December 18, the RBI
has indicated that it would ease monetary policy in January review. "In
view of inflation pressures ebbing, monetary policy has to increasingly shift
focus and respond to the threats to growth from this point onward," the
RBI had said in the mid-quarter review of monetary policy announced December 18.
2. The
finance ministry has allowed state-owned Life Insurance Corporation (LIC) to
invest up to 30% in a company from its earlier cap of 10% - a move seen as an
attempt to bolster the government's disinvestment programme by allowing LIC to
invest in public sector firms.
3. Small
entrepreneurs may soon get access to credit at a lower interest rates, as the
Reserve Bank of India has allowed Small Industries Development Bank of India
(SIDBI) to go for external commercial borrowing (ECB) to fund micro, small and
medium enterprises (MSMEs). RBI has permitted SIDBI to raise up to $500 million
(nearly R2,700 crore) a year. However,
small entrepreneurs are still wary, as their loan-sizes are relatively small.
Banks charge 13-16% interest on loans to small enterprises.
4. More
than a dozen banks, majority them are public sector banks, reported an over 100 per cent increase in
their net non-performing assets (NPAs) in 2011-12 and the situation
may get worst in current financial year 2012-13 according to analysis done by
NPAsource.com, a first of its kind portal, which focuses on resolution
of stressed assets. Large banks like Central Bank of India (CBI) at over 400 per cent, Indian Bank
with 201 per cent, Oriental Bank of Commerce (OBC) at 162 per cent, Corporation Bank with 119 per cent and Punjab National Bank ( PNB) with 118 per cent were amongst those
banks which reported a 100 per cent jump in their net NPAs during fiscal 2011-12.
Foreign banks like Bank of Bahrain and Kuwait (399 per cent), China trust Commercial
Bank (269 per cent), DBS Bank
(232 per cent) and Standard Chartered Bank (193 per cent) too figured amongst the
banks with very high increase in their net NPA levels. India's largest bank,
the State Bank of India too saw its net NPAs shoot up by 40 per
cent in during the first half of 2012-13 as against an increase of 28 per cent
in the previous financial year ended March 31, 2012."
