Tuesday, 31 July 2012

[www.keralites.net] RBI Credit Policy – Highlights

 

 
RBI Credit Policy – Highlights 
 
MONETARY MEASURES
a.
The policy rate i.e. Repo Rate and the CRR kept unchanged, at the current level of 8% and 4.75% respectively.
b.
Consequently, the reverse repo rate under the liquidity adjustment facility (LAF) and the marginal standing facility (MSF) remains unchanged at 7% and 9% respectively.
c.
The statutory liquidity ratio (SLR) has been reduced from 24 per cent to 23 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning August 11, 2012.
RATONALE BEHIND THE PAUSE IN POLICY ACTION

a.
Sticky Inflation - After moderating for a short period during December-January, headline WPI inflation edged up again beginning February 2012 and has remained sticky, above 7%, on account of increase in food prices, increase in input costs, and upward revision in prices of some administered items such as coal.
b.
Supply Constraints - Headline inflation has persisted even as demand has moderated and the pricing power of corporate weakened. Non-food manufactured products inflation has also not declined to the extent warranted by the growth moderation. This reflects severe supply constraints and entrenchment of inflation expectations.
c.
Liquidity to Productive Sectors - Liquidity conditions play an important role in the transmission of monetary policy signals. Although the situation has eased significantly in the recent period, it is necessary to ensure that liquidity pressures do not constrain the flow of credit to productive sectors of the economy. The reduction in SLR is expected to ensure that the liquidity pressures do not constrain the flow of credit to the productive sectors of the economy.
INFLATION PROJECTION – REVISED UPWARDS FROM 6.5% TO 7.0%

In the April Policy, the Reserve Bank made a baseline projection of WPI inflation for March 2013 of 6.5%. This was based, in part, on an assumption of normal monsoon. The deficient and uneven monsoon performance so far will have an adverse impact on food inflation. International crude oil prices remain elevated and the pass-through of rupee depreciation to import prices, continues to put upward pressure on domestic fuel price inflation. The decline in non-food manufactured products inflation has not been commensurate with the moderation in growth. Input price pressures on account of exchange rate movements and infrastructural bottlenecks in coal, minerals and power may exert upside pressure on non-food manufactured products inflation. Keeping in view the recent trends in food inflation, trends in global commodity prices and the likely demand scenario, the baseline projection for WPI inflation for March 2013 is now raised from 6.5%, as set out in the April Policy to 7.0%
.
M3 AND CREDIT GROWTH PROJECTION - UNCHANGED

With nominal growth remaining broadly at the level envisaged in the April Policy, monetary aggregates are expected to move along the trajectories projected in the Monetary Policy Statement 2012-13. Accordingly, M3 growth projection for 2012-13 has been retained at 15% and the growth in non-food credit of Scheduled Commercial Banks (SCB) at 17%.

GDP GROWTH PROJECTION – REVISED DOWNWARDS FROM 7.3% TO 6.5%

In the April Policy, the Reserve Bank had projected GDP growth for 2012-13 at 7.3% on the assumption of a normal monsoon and improvement in industrial activity. But the monsoon has been deficient and uneven so far. Also, data on industrial production for April-May suggest that industrial activity, despite some recovery, remains weak. In addition, several risks to domestic growth have intensified. First, global growth and trade volume are now expected to be lower than projected earlier. Given the greater integration of the Indian economy with the global economy, this will have an adverse impact on growth, particularly in industry and the services sector. Second, reflecting the lagged impact of weak industrial activity and global slowdown, the services sector growth is also expected to slow down. On the basis of the above considerations, the growth projection for 2012-13 is revised downwards from 7.3% to 6.5%

FUTURE TRAJECTORY OF THE POLICY ACTIONS

a.
While the primary focus of monetary policy remains inflation control, in the event of constraints to growth are addressed through policy actions by the Government, the RBI will suitably adjust its monetary policy stance.
b.
The Reserve Bank will respond to liquidity pressures, including by way of open market operations (OMOs).
c.
In the event of external shocks. The Reserve Bank stands ready to respond to any such shocks swiftly, using all available instruments.
IMPACT ON THE BOND MARKET

Government bond yields have reacted adversely to the policy action, with the 10-yr benchmark moving higher by almost 10 bps to 8.22%. With the system already holding SLR securities in excess of the mandated norm (close to 30.0% for the fortnight ending July 13,2012), the direct impact of the SLR cut on liquidity could be limited in the near-term. The impact of the SLR cut is likely to be more pronounced on short-term interest rates with the overnight call rate premium over the repo rate shrinking over the coming days. While RBI has stated that it will resort to OMO buybacks if the liquidity situation so warrants, the same may not happen in the next two months given the fact that liquidity is likely to remain easy. As a result, the pressure on the long-end of the curve may continue in the near term, as more supply hits the market over August- September, 2012.
Source: TMF
 
Best Regards
Prakash Nair
www.keralites.net

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[www.keralites.net] Federal Bank offers 10% interest rate on 1,000 days NRE/Resident deposits

 
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[www.keralites.net] CBDT extends Income Tax Returns filing date to 31st August

 

CBDT extends Income Tax Returns filing date to 31st August
 
Due to power failure across Northern and Eastern states, the CBDT extended the due date for filing I-T returns to 31st August from 31st July
 
The Central Board of Direct Taxes (CBDT) has extended the due date for filing income tax (I-T) returns for assessment year 2012-13 to 31st August from 31st July. This means, you can file your I-T returns for FY2011-12 till 31st August.
 
CBDT, in a notification said, "On consideration of the reports of disturbance of general life caused due to failure of power, the CBDT in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the 'due date' of filing of returns of income for the Assessment Year 2012-13 to 31 August 2012".
Earlier, the CBDT made it e-fling mandatory for an individual or a Hindu Undivided Family (HUF) if his or its total income exceeds Rs10 lakh. E-filing for such assessees was optional till 2010-11.

The Income Tax Department had received a record 1.64 crore e-Returns in 2011-12 financial year.
Currently, 'Business Houses' with receipts of Rs60 lakh and professionals with income of Rs15 lakh are mandatorily required to e-file their return with digital signature.
As on 31 March 2012, there were 1.96 crore tax payers who had registered for e-filing.

Best Regards
Prakash Nair 
www.keralites.net

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[www.keralites.net] Snappy Comeback Lines

 

Snappy Comeback Lines

"Did you take a bath?"
"Why, Is there one missing?"
"Are you chewing gum?"
"No, I'm John Smith."
"I want to buy a dress to put on around the house."
"Yes, Madam. How large is your house?"
"What are you going to be when you graduate?"
"An old man"
"I spent three years in college taking medicine."
"Are you well now?"
"Do you say a prayer before you eat?"
"No, we don't have to. My mother is a good cook."

"I've got a surprise for you, honey. I brought a friend home for dinner."
"Who wants to eat friends?"
"We are having mother for dinner, darling."
"Make sure she's well done."

"I want some rat poison."
"Should I wrap it up or do you want to eat it right here?"
"It seems that everything I say to you goes in one ear and out the other."
"Well, I guess that's why I've got two ears."
"May I hold your hand?"
"No, thanks, It isn't heavy."
"Does water always come through the roof in this place?"
"No, sir, only when it rains."
"When will you straighten out the house, dear?"
"Why? Is it tilted?"
"Do these stairs take you to the second floor?"
"No, you'll have to walk"
"Now that you're married, you should have some insurance"
But why? My wife isn't dangerous."
I have changed! My mind."
Thank heaven!
Does it work better now?"

Waiter: Would you like your coffee black?
Customer: What other colours do you have?
ISMAIL CHOHAN
www.keralites.net

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[www.keralites.net] Ten Commandments

 

Someone has written these beautiful words. Must read and try to understand the deep meaning of it.
They are like the ten commandments to follow in life all the time.


1] Prayer is not a "spare wheel" that you pull out when in trouble, but it is a "steering wheel" that directs the right path throughout.


2] So why a Car's WINDSHIELD is so large & the Rear view Mirror is so small? Because our PAST is not as important as our FUTURE. So, Look Ahead and Move on.


3] Friendship is like a BOOK. It takes few seconds to burn, but it takes years to write.


4] All things in life are temporary. If going well, enjoy it, they will not last forever. If going wrong, don't worry, they can't last long either.


5] Old Friends are Gold! New Friends are Diamond! If you get a Diamond, don't forget the Gold! Because to hold a Diamond, you always need a Base of Gold!


6] Often when we lose hope and think this is the end, GOD smiles from above and says, "Relax, sweetheart, it's just a bend, not the end!


7] When GOD solves your problems, you have faith in HIS abilities; when GOD doesn't solve your problems HE has faith in your abilities.


8] A blind person asked St. Anthony: "Can there be anything worse than losing eye sight?" He replied: "Yes, losing your vision!"


9] When you pray for others, God listens to you and blesses them, and sometimes, when you are safe and happy, remember that someone has prayed for you.


10] WORRYING does not take away tomorrow's TROUBLES, it takes away today's PEACE.


If you really enjoy this, please pass to others. It may brighten someone's day...

ISMAIL CHOHAN

www.keralites.net

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