Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: list of goods taxed at 4% :: empanelment :: form 3cd :: VAT Audit :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India
 
 
General »
 Companies should invest in upgradation of tax technology
 Top House tax writer suggests measures to mitigate the impact of the border tax
 Consumer goods distributors, wholesalers to bear the brunt of GST
 GST classification woes to continue
 There will be no tax on farm or agriculture income
 RBI, Income Tax Acts to be amended for electoral bonds, Jaitley says
  Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016
 I-T zeroes in on Mumbai trader in first crackdown after demonetisation
  Tax queries answered by Dilip Lakhani, Senior Chartered Accountant
 Income Tax Department Failed To Unearth Black Money Despite Information
 Govt filing twice as many cases as private cos in Supreme Court

RBI MAY HIKE RISK WEIGHTS FOR REGULATED ENTITIES
August, 26th 2010

The Reserve Bank of India has hinted at the use of prudential measures to regulate the exposure of entities such as banks, non-banking finance companies and financial institutions to asset price cycles to strengthen the overall financial stability framework.

The central bank's comment is significant as it had, in its first quarter review of macroeconomic and monetary developments last month, expressed concern about the sustained and rapid rise in housing prices over successive quarters from the standpoint of their possible spill-over to demand pressures and the general price level.

Then, it also alluded to increasing uncertainties and corrections in domestic stock prices.

Bankers say the prudential measures that the RBI could resort to, could include upping risk weights and stepping up provision coverage so that credit becomes costly to sectors where credit is growing fast and the risk of default is high.

Stability framework

Referring to the persisting ambiguity about the role of monetary policy in relation to asset prices even after the global crisis, the RBI, in its annual report for 2009-10, said the use of prudential measures to regulate the exposure of regulated entities to asset price cycles could help strengthen the overall stability framework, even though volatility in asset prices may still persist.

The financial stability goal will require use of a combination of instruments involving regulation, supervision and monetary/macroeconomic policies to enhance the effectiveness of crisis prevention, the report said.

The central bank pointed out that monetary policy, in pursuing the growth objective, may remain accommodative for an extended period at times, which in turn could fuel credit and asset bubbles and thereby jeopardise the financial stability goal.

Similarly, the use of fiscal stimulus to limit the adverse real effects of a financial crisis could at times give rise to a fiscal crisis, which in turn could be a source of instability for the financial system.

Financial stability

Hence, in the process of balancing inflation and growth considerations in the conduct of macroeconomic policies, the RBI said financial stability has become a critical component which would add complexity to policy formulation.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions