Bernanke to meet RBI top brass on 10 October

Meeting closed to media; reciprocity on granting banking licences may come up for discussion
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First Published: Mon, Oct 01 2012. 09 11 PM IST
US Fed Reserve chief Ben Bernanke. Photo AFP
US Fed Reserve chief Ben Bernanke. Photo AFP
Mumbai: Ben Bernanke will meet the top brass of the Reserve Bank of India (RBI) at the Indian central bank’s headquarters in Mumbai on 10 October, in the first visit of its kind by a chairman of the US Federal Reserve.
Bernanke met RBI governor D. Subbarao last year in Washington as part of the second annual meeting of the US-India Economic and Financial Partnership.
The third annual meet of the body will be held between 9 and 10 October in India.
Bernanke will be part of the US delegation, headed by US treasury secretary Timothy Geithner who is also expected to meet senior RBI officials.
Bernanke is the 14th chairman of the US Fed, and assumed office on 1 February 2006.
The partnership meet was originally scheduled for 27-28 June.
The October meeting is closed to media and no agenda has yet been circulated although reciprocity issues on granting banking licences may come up for discussion, a person familiar with the development said, asking not to be identified.
Under World Trade Organization (WTO) norms, the Indian banking regulator is required to offer 12 new licences every year to foreign banks, although it usually does more.
As at the end of March 2012, 40 foreign banks had 323 offices in India. In March 2011, the comparable figures were 317 and 34. In March 2008, there were 277 offices of 28 foreign banks in March 2008, according to RBI data.
Indian banks have been complaining that the same amount of reciprocity is not shown in developed economies when they want to open branches.
Successive US treasury secretaries have impressed upon the Indian central bank the need to open the sector, but RBI has all along emphasized on reciprocity.
The interaction between the governors assume significance in an environment where global uncertainties are making the jobs of the central banks — ensuring price stability as well as protecting economic growth — challenging.
To lift the growth of the largest economy in the world, the Fed, in mid-September announced it would buy $40 billion a month in mortgage-backed securities till labour market sentiments improve. It has kept its policy rates at abnormally low level of zero to 0.25% since 2008.
RBI, on the other hand, has been struggling with high inflation for past three years. It hiked the policy rate 13 times before starting to trim them from April 2012. In its September policy, RBI eased banks’ reserve requirement by half a percentage point, releasing Rs18,000 crore into the system but maintained that inflation continues to be a worry.
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First Published: Mon, Oct 01 2012. 09 11 PM IST
More Topics: Bernanke | Subbarao | US Fed | RBI |