Archive for March 17th, 2015

Review of Local Area Banks and Policy Implications for Narrow Banks in India

March 17, 2015

Useful paper by Prof Sriram and Aparna Krishna on the topic.

In the recent past there has been renewed discussion on the possibility of setting up narrow banks to focus on including the population left out of the formal financial sector. Reviewing the experience of local area banks and the landscape of financial inclusion, this paper identifies internal contradictions in the approach to narrow banks — primary objectives, structures, limitation of size and geography, mainstream banking standards, evaluation of performance. Despite these issues, the existing banks are indeed performing (under severe constraints), and do not give cause for anxiety on solvency and stability.

It has an excellent summary of the perofrmance of LABs whose case has been dismissed without giving them a chance. Their performance evaluation was done with comercial banks without giving them the same flexibility. Actually, there were far more restrictions on LABs which did not allow them to perform adequately. Even then they performed reasonably well:

What Happened at This Year’s Austrian Economics Conference?

March 17, 2015

A school whose works we all should be reading given how royally it is ignored from our econ books.

Jonathan Newman sums up the findings of the recent conference on the work done under the school..


Making sense of India’s Any Time Monetary Policy..

March 17, 2015

Abheek Barua of HDFC Bank tries to make sense of the sudden rate cuts post budget (which this blog called as ATM policy).

He cites 3 hypotheses:


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