SBI's loan mela inaugurated by G.Mahalingam, Regional Director, RBI

A large number of prospective loan seekers thronged the SBI's three-day-long 'Vasant Rin Utsav' which was inaugurated by Reserve Bank of India's Regional Director G Mahalingam at S K Memorial Hall here on Friday.  After the inauguration, keys of six cars and sanction letters of five loans were given away to borrowers by the chief general manager, SBI, Jeevandas Narayan, who was present as chief guest.  The main attraction of the fair is 50 % concession in processing fee for car loans and 0.25% concession in interest rate from 37th month till the tenure of the home loans. About 12 car dealers and 20 builders have put up their stalls at the fair.

Star TV Talent Leadership and HR Awards at the World HRD Congress

Sandip Ghose, Regional Director, RBI, New Delhi distributing Star TV Talent Leadership and HR Awards at the World HRD Congress

RBI Governor holds talks with CS

Reserve Bank of India Governor D Subbarao and senior RBI officials held talks with the Chief Secretary Awani Vaish and senior officials of the State Government at Bhopal on Thursday. They expressed concern over the ratio reduction in loan deposit in tribal-dominated districts. It was informed at the meeting that there was 40 per cent depletion in loan deposit in eight tribal districts. The Reserve Bank of India Governor instructed the banks to come up with improvement in this regard. There should be 65 per cent loan deposit in the state and 40 per cent in tribal districts. The banks assured that they would extend the figure in next financial year. Welcoming the visit of Reserve Bank of India Governor to Madhya Pradesh, the Chief Secretary said that the regional office of Reserve Bank of India was working actively. The Reserve Bank of India Governor said that he was very much impressed with the State Government for designing joint agenda, which could not be seen in other States. At the meeting, the State Government drew the attention of the Reserve Bank of India Governor to State Government grant to set up hand held device, smart card and bio metric ATM by banks. Subbarao was informed that banking facility at the village more than 2000 population needed in Madhya Pradesh. Subbarao appreciated this initiative and said it would be decided only after positive results of financial audit in next financial year. E-kiosk is being used by State Bank of India that should be conducted by other banks too. The RBI Governor was apprised of education loan for the education of poor children under Government guarantee. Subbarao asked the banks to provide educational loan of Rs 4 lakh without guarantee so as to benefit maximum people. The security to banks was also discussed at the meeting. 

BOB opens its all Ladies staff Branch at Pune

Bank of Baroda has opened its all women staff branch at Sinhgad Road,Pune.The branch was inaugurated at the hands of Shri R K Bakshi,ED of Bank of Baroda,in the presence of Ms Kamala Rajan, CGM & Principal, College of Agriculture Banking, RBI, Pune. N Ramani,Corporate General Manager and C D Kalkar,GM-Maharashtra & Goa Zone of the Bank.Speaking on the occasion,R K Bakshi said that women are making mark in all walks of life and banking is no exception.He assured the customers that the branch will be providing advisory services to the customers in addition to normal banking products and services.

RBI again raps banks on teaser loans

The Reserve Bank of India (RBI) has once again expressed its discomfort over teaser loan rates and questioned banks’ business model for offering such schemes.  “Some banks are taking deposits at an interest rate of 9 per cent and giving long-term loans, especially home loans, at 8.5 per cent. I don’t know what type of accounting is needed to show that this is not a very profitable business,” RBI Deputy Governor K C Chakrabarty said, while addressing a seminar on International Financial Reporting Standards.  October, RBI had raised the standard provisioning requirement for teaser loans five-fold, to two per cent, to discourage banks from offering such schemes. Teaser loans are those which charge lower interest rates in the initial period and a higher one in later years. State Bank of India (SBI), the country’s largest bank, has been running such a scheme for the past two years. SBI tweaked the scheme following the increase in provisioning requirement. It has since written to RBI to exempt these from the requirement.    Its defense of the scheme is that it has helped the common man. SBI chairman O P Bhatt recently said, at the World Economic Forum in Davos, that almost 80 per cent of the home loans given by SBI were below Rs 10 lakh, which meant the ‘aam admi’ was being empowered. He said the bank had given home loans to nearly 300,000 people in India. “I am not fighting with RBI, but only clarifying. We only gave a discount on the rate for the first two to three years and the rate is higher than the cost of my funds. So, what is wrong in what SBI does?” Bhatt had said. However, the banking regulator believes such schemes expose banks to the risk of defaults in future, as the borrower might not be aware of the scale of increase in monthly installments as interest rates rise. Most lenders which had offered such home loan schemes had then withdrawn these, such as HDFC and ICICI banks, following the regulator’s expressed concern.   

Flexible inflation targeting best, says Bank of Israel Governor

Bank of Israel Governor and a former official of International Monetary Fund (IMF) Stanley Fischer has argued that "flexible inflation targeting is the best way of conducting money policy". "The tripartite set of goals of money policy set out in modern central bank laws provide the best understanding of what a central bank should try to achieve.  Among other issues a central bank should aim to maintain price stability, to support the other goals of economic policy, particularly growth and employment, so long as medium term price stability ­over the course of a year or two or even three ­is preserved, and to support and promote the stability and efficiency of the financial system," Fischer said while delivering the third PR Brahmananda Memorial Lecture on `Central Bank Lessons from the GlobalCrisis'.  "But 'flexible' does not mean that a country should not intervene in the foreign exchange market, or that the capital account should be completely open. Rather, it means that the country should not draw an exchange rate line in the sand and declare 'thus far, and no further'. Countries should not commit themselves to defending a particular exchange rate," he said.