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Raghuram Rajan’s successor to be announced soon

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The RBI governor Raghuram Rajan left the government officials and investors stupified on Saturday by announcing he would step down when his term ends on September 4.

“While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016,” Rajan wrote.

It will be the first time since 1992 that an RBI governor has departed after a single three-year term.

Following this, Finance Minister Arun Jaitley said the government would name a successor soon and a senior official stated there are currently seven names on a list of possible candidates.

The seven possible candidates with the potential to named as the successor of Raghuram Rajan are:

SUBIR GOKARN: Gokarn, 56, also a former deputy RBI governor, currently serves as an executive director at the IMF. He looked after monetary policy during his three years at the central bank until the end of 2012.

URJIT PATEL:One of the RBI deputy governer, Mr. Udit Patel has run the central bank’s monetary policy department since 2013 and is viewed as a leading contender for the governor’s job.

Seen as a close lieutenant to Rajan, Patel headed a committee that introduced landmark changes including a switch to inflation-targeting and adopting consumer prices as the new benchmark instead of wholesale prices. The changes he helped drive are considered to be among the most significant monetary policy reforms since India opened up its economy in 1991.

RAKESH MOHAN: Mohan, 68, had two stints as a deputy governor of the RBI. He also served as secretary at the department of economic affairs at the Indian government’s finance ministry and held positions at the International Monetary Fund (IMF).
Mohan was in charge of monetary policy, financial markets, economic research and statistics at the RBI.

ARUNDHATI BHATTACHARYA: Ms Bhattacharya, 60, whose term as the chair at State Bank of India ends later this year, is perceived as another front runner in the race.
A high-profile banker, Bhattacharya has been at the helm of India’s largest lender — State Bank of India — since late 2013 and has earned praise from investors for her management of the bank’s mountain of bad debt. She was named in the Forbes list of world’s 100 most powerful women.

SUBIR GOKARN: Mr Gokarn, 56, also a former deputy RBI governor, currently serves as an executive director at the IMF. He looked after monetary policy during his three years at the central bank until the end of 2012.

ASHOK LAHIRI: Mr Lahiri, 64, a former chief economic adviser to the Indian government, also served the Asian Development Bank as an executive director.
He is the non-executive chairman of Bandhan Bank, one of India’s newest lenders.

VIJAY KELKAR: The 74-year-old economist has held several positions with the Indian government, including as a finance secretary.
He has authored several reports for the government, most recently writing about reviving public-private partnerships for infrastructure projects. Kelkar chalked out a fiscal consolidation roadmap under the previous government.

ASHOK CHAWLA: Mr Chawla, 65, was last month appointed as the chair of the National Stock Exchange, India’s biggest bourse. He stepped down as chairman of Competition Commission of India earlier this year.

He has been a civil servant for most of his career, and has served on the board of the Reserve Bank of India. He has also been a director for state-run Oil and Natural Gas Corp.

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ICICI Bank sets up presence in Nepal

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ICICI Bank

Mumbai, Dec 3: Lending major ICICI Bank on Thursday launched its operations in Nepal, via a representative office, to become the first Indian private sector bank to set up its presence in the country.

The bank opened a representative office in Kathmandu which will closely work with the domestic banks in Nepal to facilitate investment, trade, payments and treasury business between the two countries.

According to the bank, the current foray has expanded its global footprint to 15 countries including India.

“India and Nepal have significant trade and investment links between them. We believe that ICICI Bank’s on-ground presence through the new representative office coupled with its strong business partnerships with banks in Nepal, will help us further our participation in the economic flows between the two countries,” said Sriram H. Iyer, Head – International Banking Group, ICICI Bank.

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RBI asks HDFC Bank to temporarily stop issuing new credit cards

Furthermore, the filing said that these measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

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HDFC Bank

The Reserve Bank has asked HDFC Bank to temporarily stop all launches of the ‘Digital Business generating activities and sourcing of new credit card customers.

The RBI’s order dated December 2 comes after outages in the bank’s online facilities or payment utilities occurred over the past 2 years, including the recent incident in the internet banking and payment system on November 21, 2020 due to a power failure in the primary data centre.

In a regulatory filing, HDFC Bank on Thursday said: “The RBI vide said ‘Order’ has advised the Bank to temporarily stop i) all launches of the Digital Business generating activities planned under its program – Digital 2.0 (to be launched) and other proposed business generating IT applications and (ii) sourcing of new credit card customers. In addition, the Order states that the Bank’s Board examines the lapses and fixes accountability.”

Furthermore, the filing said that these measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

“The Bank over the last two years has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the Regulator in this regard.

“The Bank has always endeavoured to provide seamless digital banking services to its customers. The Bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations.”

In addition, the bank said these measures will not materially impact its overall business.

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Petrol, diesel become dearer after OMCs raise retail prices

The pump price of petrol increased by 17 paisa per litre on Thursday to Rs 82.66 a litre in Delhi from a level of Rs 82.49 a litre a day earlier.

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Oil Price

Oil marketing companies on Thursday increased the prices of petrol and diesel after keeping the retail prices unchanged for the past couple of days.

The pump price of petrol increased by 17 paisa per litre on Thursday to Rs 82.66 a litre in Delhi from a level of Rs 82.49 a litre a day earlier.

Similarly, the diesel price increased by 19 a litre to Rs 72.84 a litre in the national capital as compared to Rs 72.66 per litre on the previous day.

The prices of auto fuel have also increased across the country but the level of rise has been different depending on the taxation structure in each state.

In the past 14 days, due prices have risen 11 days with petrol prices rising by Rs 1.60 per litre and diesel by Rs 2.38 a litre.

The increase has been primarily on account of firming up of global oil and product prices following news of successful coronavirus vaccine.

Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2.

Though retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspend ended for almost two months to prevent volatility in international oil markets from impacting fuel prices regularly during the pandemic.

But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the patience was lost by OMCs who finally resorted to price increase to cover for their under recovery on the sale of two petroleum products.

The benchmark Brent crude has crossed $48 a barrel on Intercontinental Exchange (ICE) lately. It has remained an over $44 a barrel for most part of November.

OMCs need almost 40 paise per litre increase in retail price of petrol and diesel to cover for $ 1 increase in crude.

Going by this yardstick, product prices would have to be increased by upto Rs 2 per litre to cover under recovery on its sale.

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