RBI hikes cash ratio for banks by 75 bps
January 29, 2010
The Reserve Bank of India (RBI) Friday hiked the cash reserve ratio (CRR) for commercial banks by an unexpected 75 basis points, in a clear bid to curb inflationary expectations in the economy.
All other policy rates were left unchanged.
The CRR, presently at 5 percent, will be hiked in two stages — 50 basis points from Feb 13 and another 25 basis from Feb 27, RBI Governor D. Subbarao told the chief executives of commercial banks in Mumbai.
“As a result of this increase in the CRR, about Rs.36,000 crore of excess liquidity will be absorbed from the system,” Subbarao added, as he presented the third quarterly update of the central bank’s monetary policy for this fiscal.
Cash reserve ratio is the minimum liquid assets banks have to retain against deposits or park with the central bank in the form of government securities.
Subbarao said the cut in excess liquidity will help anchor inflationary expectations and that the recovery process of the economy will be supported without compromising on price stability.
The unexpected hike in the cash reserve ratio saw the benchmark sensitive index (Sensex) of the Bombay Stock Exchange plummet nearly 325 points, or almost 2 percent, before staging a marginal recovery.
The central bank projected an impressive 7.5 percent growth for the Indian economy in the current fiscal even as it hiked the outlook for annual inflation rate to 8.5 percent by end-March. Earlier, it had earlier pegged the growth rate at 6 percent and inflation at 6.5 percent.
“Assuming a near-zero growth in agricultural production and continued recovery in industrial production and services sector, the baseline projection for gross domestic product growth for 2009-10 is now raised to 7.5 percent,” the central bank said.
“Keeping in view the global trend in commodity prices and the domestic demand-supply balance, the baseline projection for wholesale price inflation for end-March 2010 is now raised to 8.5 percent,” Subbarao said.
He also expected the country’s growth rate of 7.5 percent to be sustained in the next fiscal.
“As with growth, we shall formally announce our inflation projection for 2010-11 in our monetary policy in April. But on the assumption of normal monsoon and global oil prices remaining around the current level, it is expected inflation will moderate from July.”
Highlights of RBI’s third quarter monetary policy update:
- Cash reserve ratio hiked by 75 basis points to 5.75 percent in two stages
- Move to suck out excess liquidity worth Rs. 36,000 crore from system
- Bank rate retained at 6.0 percent
- Repo rate retained at 4.75 per cent
- Reverse repo rate retained at 3.25 percent
- India’s economic growth projection hiked to 7.5 percent from earlier 6 percent
- Annual inflation rate projection hiked to 8.5 percent from 6.5 percent
- Inflation risk looms larger when viewed in the context of global price movements
- Reserve Bank to monitor price situation closely and take further action as warranted
- Reduction in excess liquidity to help anchor inflationary expectations
- Recovery process to be supported without compromising price stability
- Central bank focus now on managing recovery from managing crisis
- There is still uncertainty about pace and shape of global recovery
- Stronger global recovery could prop oil prices sharply
- Monetary policy for 2010-11 to be announced April 20
Latest from Salman Khan - Veer
January 24, 2010
Salman Khan returns with his latest movie “Veer” which is a period film in which he plays one of the bravest and strongest Pindari soldiers named Veer. Made at a budget of around Rs.44 crore, (Rs.440 million) ‘Veer’ has been directed by Anil Sharma and marks the big screen debut of Zarine Khan, who is said to have a close resemblance to Salman’s actress girlfriend Katrina Kaif.
The story of the film was written by Salman himself and is an Eros International Media Ltd presentation and Vijay Galani Moviez production.
Shot extensively in Rajasthan, it is a story of bravery, treachery and love. What is to be seen is whether ‘Veer’ relives Salman’s last year’s magic at the box office thanks to massive hit ‘Wanted’. We welcome comments from our readers about the film.
Hewlett-Packard (HP) to explore SME sector for printers
January 24, 2010
Hyderabad: Hewlett-Packard India plans to tap the rising demand for printers in the small and medium businesses segment, a top official said on Friday.
We see huge potential demand for printing from IT/ITeS, pharmaceutical, entertainment and e-governance initiatives, HP India’s Country Category Manager (Imaging and Printing), Ajay Rawal told reporters.
Rawal said that HP is also keen on energy saving initiatives with instant-ON technology, which eliminates or minimises warm up time. Also, the toner particles now have wax element that melts quickly, improves efficiency at work, he added.
He said three of HP’s top-selling printers were HP LaserJet P1007, HP MFP M 1005, and HP ColorLaserJet 1215. LaserJet P 1007 will now be available for a reduced price of Rs 5,999, he added.
Rawal said Laser printers are expected to constitute 50 per cent of the total printer market from the current 38 per cent.
Muslim women have to shed burqa to Vote: SC
January 24, 2010
The Supreme Court on Friday observed that Muslim women have to shed their burqa to vote. A bench comprising Chief Justice K G Balakrishnan and Justice Deepak Verma gave the order on Friday while hearing a petition by Madurai resident Ajmal Khan, who had pleaded that printing photos of Muslim women in the voters list violates Islam and their fundamental right to practise and profess their religion.
The Supreme Court was not convinced, and asked him what Muslim women would do if they contested elections.
“What if you want to contest an election?” asked the court. “If you have such strong religious sentiments, and do not want to be seen by members of public, then do not go to vote. You cannot go with burqa to vote. It will create complications in identification of voters.
“If someone comes to vote in a burqa and the photograph was also taken with a veil covering the face, how would anyone identify the voter?” the court said.
Khan filed a plea in the apex court after the Madras High Court ruling dismissed his plea questioning Election Commission of India’s move to have photographs of voters in electoral rolls.
“The religious custom and preachings of Holy Quran lay down that Muslim women should wear purdah and ‘burqa’ and show their faces only to their husbands and close relatives,” Khan said in his plea.
Well I agree with the observation made by the apex court but my view is that in a secular country like India everyone has the right to practice their religion and nobody should be forced to act in a way which hurts the religious sentiments. If photos without burqa is a necessity to vote, which I agree to, at least the court can direct the Election Commission to appoint a women election officer at every booth so that the Muslim women can easily reveal their identity and vote. These are my personal views. Are we going to see a new controversy in the days to come. What will the political parties who treats Muslims as their vote-bank have to say about the observation?