No FIR’s on depositing fake currency, businessmen ask RBI

The Chattisgarh Chamber of Commerce and Industries has asked the Reserve Bank of India Governor D Subbarao to change certain rules pertaining to administration of banking regulations. The office bearers of the chamber have asked for an appointment with the RBI Governor in this regard. The president of the chamber Shrichand Sundrani, general secretary Jitendra Baralta, treasurer U N Agrawal and others demanded that the no FIR (First Information Report) should be lodged on submission of fake currency notes in banks as businessmen do not always check every currency note before accepting it. They should be instead destroyed instead of filing FIR. Presently, an FIR is obligatory if bank receives fake currency. The president of the chamber said that another regulation which needs to be looked into is that of automatic closure of any account from which there is no transaction for a period of 6 month. He said that opening of accounts of every group-member of a business venture is compulsory as per the orders of the Income Tax department. These accounts are not in regular use. The office bearers also made several other demands like clearing loan applications in time, standardisation of amount necessary for opening bank account etc.                                                                 

RBI Governor in Bhopal on Feb 9

The Governor of the Reserve Bank of India Dr D Subbarao will be in Bhopal on February 9. He will preside over a meeting of RBI’s central board in the capital. He will also inaugurate an exhibition depicting the 75 year history of the bank.

NE lags in electronic clearing system: RBI

Ruling that the Northeast was yet to pick up the electronic clearing system (ECS), a senior Reserve Bank official today said Clearances through the ECS in the region is only one per cent of the national average. "More awareness in required to refine the payment and settlement systems in the region. Of late, Manipur has started payment of salaries through this system. In Meghalaya some debit clearing (like BSNL bills) is done through ECS," RBI Regional Director Surekha Marandi said. Addressing a workshop on popularizing ECS for payment of salaries and pension, she said the electronic transfer of payments were safe, efficient, time saving time and it helped better fund management. "Clearances through cheques take three days time, while through ECS it is done in one day. The ECS also ensures better customer satisfaction," she said.Meghalaya Chief Minister Mukul Sangma said all state government employees will be brought in the loop."The beneficiaries of government schemes and other weekly payments will be done through this system in near future," Sangma said. Meghalaya additional chief secretary (in charge finance) BK Dev Verma said the ECS reduces the paper work and the exercise of going to banks. "The possibility of fraud is also nil," he said. Meghalaya government is in the process of starting e-payment of pension. "Next, we will start the payment of salaries through ECS. The banks have to gear up to handle the tasks, because gradually all government transactions will be done through electronic payment," Verma said.                                                 

Banking access to all villages with 2,000 people: RBI

The Reserve Bank of India (RBI) has planned to make banking accessible to all villages with population more than 2,000 by March 2012, bank governor D. Subbarao said Tuesday. " RBI has planned that all villages with population more than 2,000 must have access to banking such as through ATMs, business correspondents and rural mobile banking ," Subbarao told students of the Indian Institute of Management-Raipur (IIM-Raipur) while making a presentation on the working of RBI.  "It is a challenge before the RBI to maintain growth and control inflation," he said. He explained in detail about several functions of the RBI - from printing and distributing currency to acting as monetary authority, regulatory and supervisory body for banks. The RBI chief also sought to correct people's 'wrong perception' regarding RBI as a regulatory body for interest rates, saying RBI doesn't regulate interest rates on borrowing and lending except for NRI deposits and savings bank accounts. He also explained how RBI acts as an 'external sector gatekeeper' by managing current account deficit

Kamath worried over inflation impeding growth

ICICI Bank Chairman K V Kamath today sounded alarm bells on rising inflation saying price rise numbers at the current level are not at all comfortable. "Current inflation numbers are not at comfortable levels. If we need to make growth sustainable, we need to control inflation and interest rates," Kamath told reporters on the sidelines of the Nasscom India Leadership Forum 2011 here.  On the impact of the successive interest rate hikes by the Reserve Bank of India (RBI), he said, if interest rates are hiked further, it can play a spoilsport for the present high level of growth.  On whether high interest regime is here to stay, Kamath said, till inflation does not come under control, it will remain high. He further said, it is difficult to foresee an easy money regime now as inflation so far has not been responding to the efforts of the central bank. "For the past one-and-a-half years, inflation has not been responding to the traditional monetary and fiscal instruments," Kamath said.    

Two-year FDs fetch more than 5-yr deposits

Banks are offering their highest returns in the one to two-year category of deposits, an indication that they expect interest rates to come down in the medium term. A host of banks have revised their lending and deposit rates but are reserving the most-attractive returns on the medium-term fixed deposits.  The highest rate offered by the country's largest lender, State Bank of India, is 9% and this is the return on its 555-day and 1,000-day deposits. But those who decide to keep their money for a longer term will less. A five-year deposit with SBI will fetch only 8.25% while the return on 10-year deposits is 8.75%. Conventional economics says that rates rise along with tenure, and the current pricing of deposits appears to be an anomaly. But bankers have an explanation for this.  They say there are two reasons for why medium-term rates are higher. The first is that they believe that inflation would come down which would make lower fixed deposit rates more acceptable in the next year. Secondly, they say that it is impossible to predict future rates and since most of their loans are extended on floating rates, they would rather have the option to reprice deposits after a year.  Meanwhile, more banks have increased their lending rates. in the wake of the 0.25% increase in policy rates by the Reserve Bank of India even as the liquidity position eased marginally in the money markets.                               

NABARD asks bankers to implement government sponsored schemes in Himachal

NABARD has asked regional rural banks (RRB), leading commercial banks, cooperative banks to play a proactive role in implementing government sponsored schemes formulated for weaker sections of society. Speaking a day long workshop here today, AD Ratnoo, CGM NABARD Shimla asked the participating banks to action plan for the coming year, which needed to be submitted to NABARD so that targets set out could be monitored. The branch managers of banks were asked to ensure that they were equipped with the guidelines and instructions of RBI, NABARD and central government sponsored schemes such as Dairy Entrepreneurship Development Scheme, Integrated Development of Small Ruminants, Rabbits Self-Help Groups and Joint Liability Groups.

RBI snubs NRIs, says not eligible for interest sops on home loans

The Reserve Bank today said non-resident Indians would not be eligible for incentives on interest on home loans of up to Rs 10 lakh.  Banks provide one per cent interest subsidy for home loans of up to Rs 10 lakh. "Housing loans extended to NRIs for construction of farm houses, and to staff members of the banks are not eligible for subsidy under the scheme," it said in a notification.   The central bank said the notification follows the recent clarifications issued by the government.  The government, in the Budget of 2009-10, announced a scheme of one per cent interest subvention in respect of individual housing loans up to Rs 10 lakh, provided the cost of unit does not exceed Rs 20 lakh.  The scheme was valid till September 30, 2010, with an initial allocation of Rs 1,000 crore. During the last Budget, the scheme was extended till March 31, 2011, with an additional provision of Rs 700 crore.  Further, RBI directed the banks to use their own funds for upfront credit of subsidy under the scheme till government makes reimbursement and added that loans sanctioned prior to October 1, 2009 would not qualify for reimbursement under it.  "While calculating the interest subsidy, each disbursement may be treated as a separate loan and for each disbursement, subsidy claim may be made for twelve instalments," RBI said.  The apex bank also asked all the lenders to submit their claims on a monthly basis in respect of all housing loans eligible for subsidy under the scheme.