In India, commercial banks, both public and private, are required to direct a large chunk of their net credit to designated “priority sectors” seen as having a positive impact on India’s economy, and wider society – to ensure funds flow into areas the government deems important, but might otherwise be neglected. These sectors – designated by the Reserve Bank of India – currently include broad areas of agriculture, small scale industries,...

Insurance regulator IRDA has imposed a penalty of Rs 5 lakh each on two life insurers, state-run Life Insurance Corporation (LIC) and HDFC Life Insurance, for failing to meet rural and social sector obligation in 2008-09, Parliament was informed. The Insurance Regulatory and Development Authority (IRDA) has imposed a fine on LIC and HDFC Standard Life Insurance for non-compliance under the rural sector target during 2008-09, Finance Minister Pranab Mukherjee...

With food prices showing no signs of abating and the impact of the fuel price hike in the latest budget making its presence felt, inflation moved fast towards the double-digit mark, touching 9.89 per cent in February, the highest in 16 months. The wholesale price-based inflation stood at 8.56 per cent in January. This could well cross the double-digit mark in March, experts said. Finance Minister Pranab Mukherjee had earlier said the...

India’s private sector banks are busy drawing up plans to attack public sector banks in their backyard—rural India—by opening hundreds of new branches. They don’t need to seek the Reserve Bank of India’s (RBI) nod any more to open branches in smaller towns and large villages, the so-called tier III to VI centres with population below 50,000. The Indian central bank has also permitted private and public sector banks to...

For about a week after the Dubai crisis broke, international financial markets chose to ignore it. Stock-markets climbed, commodity prices rose and the dollar continued to be beaten down. It is not too difficult to explain this initial indifference. For one, the magnitude of the Dubai crisis appeared piffling, at first glance, compared to the “subprime” crisis or the meltdown following “Lehman’s bust”. When global banks had run up losses...