The RBI has reason to be concerned. Banks’ exposure to mutual funds (MFs) has more than trebled, from Rs 45,000 crore to Rs 1,64,000 crore, during March-November 2009. The RBI is worried that stock market volatility could impact banks and, hence, endanger financial stability. Hence, the overall cap on stock market exposure as part of macro-prudential Regulation. Currently, the aggregate exposure of a bank to the capital markets in all...
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World Bank’s $1b loan for JNNURM to come with strings
A team from the World Bank will be in New Delhi soon to work out the nitty-gritties of a $1-billion loan to the urban development ministry for carrying forward the cash-starved flagship scheme for upgrading urban infrastructure, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). There would, however, be conditionalities attached to the use of the fund as it would be reform-linked and only select states would get access to...
More »SC lobs lottery ban query at Centre by Samanwaya Rautray
The Supreme Court today asked the central government to explain why lotteries shouldn’t be banned to save the poor from frittering away their meagre earnings in the hope of hitting the jackpot. The notice came a little over a week after another bench of the court asked Bengal to restrict draws of a lottery to once a week as mandated under a central law instead of one every five minutes. “Why should...
More »Managing food prices
Even as reports pour in of a softening of food price futures, the spectre of food price inflation haunts households across the country. But to imagine that the inflation genie can be put back into the bottle through legislative fiat is the height of parliamentary fantasy. The Estimates Committee of the Lok Sabha has recommended just that! It wants new legislation to check price rise of essential commodities by capping...
More »After global meltdown, govt may turn heat on credit ratings
Indian policymakers are debating doing away with the mandatory rating of financial instruments in the long-term, among a set of measures aimed at strengthening the regulatory and disclosures regime for credit ratings. The expert group, set up by the High Level Coordination Committee on Financial Markets (HLCCFM), has made specific recommendations on improving and disclosing the way credit rating agencies rate financial instruments, and has sought debate on the very...
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