The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Monday, December 20, 2010
Indian Bank to open branch in Jaffna
Indian Bank would soon open a branch in Jaffna in northern Sri Lanka, its second in the island nation, a top bank official said today. The Reserve Bank of India and the Central Bank of Sri Lanka had given their approval for opening the overseas branch of the Chennai-headquartered bank, Indian Bank Executive Director Rajeev Rishi told reporters.
Digital inclusion for rural empowerment
India needs to develop its own model of how to utilize information and communication technology (ICT) to benefit the masses, said Sam Pitroda, adviser to the Prime Minister on public information infrastructure and innovations. “We need to create an Indi- an model of information sys- tem suited to our needs,“ Pitroda said at the 7th Man- than Award South Asia 2010, hosted in New Delhi on Saturday. Organized by the Digital Empowerment Foundation (DEF); One 97, a provider of mobile value-added services; Internet Society; and the Indi- an government's department of information technology (DIT), the theme of the awards this year was “empowering rural masses through wireless, 3G and broadband“. Mint is a strategic partner of The Manthan Awards.
Microfinance: The Worst Kept Secret
The Y.H.Malegam Committee is expected to tour Andhra Pradesh in the next one month, while the Andhra Pradesh Government has passed a bill that formalises the Ordinance that it had promulgated to protect borrowers. Close on the heels Dr.Y.V.Reddy forcefully arguing for strict regulation of the sector, another former Governor of the Reserve Bank of India, Dr.C.Rangarajan, has called for a cap on the margins of the microfinance institutions (after similar demands by the AP Government). He has also called for a complete revamp of the business model of the MFIs. Muhammad Yunus has called for a regulatory agency for the Microfinance sector so as to avoid creating a new set of loan sharks in place of the old loan sharks (moneylenders).The AP government has suggested that the margins should not exceed more than 12-13 over and above their cost of funds - a very reasonable margin considering the fact that the banking sector operates on a Net Interest rate margin of about three percent. All this comes at a time when it is clear that the MFIs were themselves contemplating a change in their business model - one that would have made them no different from the Non-bank Finance Companies (NBFCs). They were contemplating a shift to monthly repayments ("MFIs shift to monthly repayments", Business Standard, 31 August 2010, p.7). There were a number of MFIs that are already gradually shifting as they have reached a critical mass (volume wise) and their growth can now expand only by making every larger loans to credit worthy customers.
One wonders why we need the MFI sector when we already have a dynamic NBFC sector, as the MFIs are now seem to be keen on evolving a business model that is akin to the NBFC sector. One wonders why there is a need to subsidise the MFIs when they are no different from NBFCs. Level playing field and transparency of government actions has been one of the important claims and the supposed underlying logic in the aftermath of liberalisation. If the government can subsidise the MFI sector, then it is high time they do the same to NBFCs. After all, what is the difference between the two: both are keen on overcharging borrowers, even if they it is usurious rates, and NBFCs too are very keen to attract private equity and list shares on the stock exchanges. This probably the reason why former governors of RBI seem to believe there is a need for the MFIs to change their business model.
UNDER PRESSURE - LPG cylinder may leave your wallet lighter by 100
Oil Ministry Weighs Hike Of 50-100 After 66% Rise In International Price Of LPG - The oil ministry plans to raise cooking gas prices by 50-100 per cylinder as the international price of liquefied petroleum gas has jumped by almost 66% since August. The rise in global prices is hurting state-run oil firms as India imports 3 million tonnes of LPG a year. The government will, however, take a decision on Wednesday only after weighing the political implications of a hike against the need to shore up the finances of companies such as Indian Oil Corp, which plans to raise 20,000 crore from a public issue in 2011.
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