Saturday, November 12, 2011

A modest, tastefully laid out home

The badminton star, Ashwini Ponnappa's fifth-floor three-bed room apartment in Begumpet in Hyderabad will come across as modest at first look.  That will only be the first impression, though.  A closer look at the interiors will reveal a tastefully laid-out array of finely crafted work, positioned with care, evidence of culture and refinement, rather than an ostentatious display of wealth and opulence. The flat's old-world charm is disarming, the presence of wood harking back to the family's roots in Coorg, Karnataka, the land of coffee and oranges, breathtaking in its beauty. Her Reserve Bank of India (RBI) Manager father M.A. Ponnappa and mother Cauvery, a relationship manager with New India Assurance, have moved house quite a few times in Bangalore and elsewhere.  “We have sent crates of prizes and books back to our ancestral home in Ammathi,” her mother says. “The RBI has been very kind and supportive to us, Ashwini's badminton career taking precedence even over the posting of my husband and in giving us fine accommodation such as this one,” Cauvery continues. There's cause for cheer too.
Healthy haven
From the balcony of Ashwini's and her parents' room, one sees a dense spread of foliage finding a healthy haven in the backyard of Hyderabad Public School. “The greenery is a blessing,” says Ashwini, whose apartment is located in the heart of the city.  “On the odd occasion, the Grey Hornbill can be sighted, although it's cackling can be quite jarring,” her mother chips in. The first artefact to catch one's eye is the money chest in the parlour, asandukamade of teak. Now it houses the photo albums of the family, a record of her father's days as a Karnataka state hockey player and avid golfer. The sofas, simply designed yet sturdy despite their age, are not surprisingly made of teak. Four chairs dot the corners, the craftsmanship contributing much to comfort of those who sink into its ergonomic embrace.  The eight-seater dining set, with its netted format, purchased from an upmarket department store, embodies an elegance all its own. Standing tall nearby is a three-door refrigerator. “I deliberately chose a smaller fridge, so that we store less and rely more on fresh food,” says Cauvery. A lengthy kitchen slab packs enough cooking paraphernalia to keep the family well nourished. “I binge on junk food when I'm not home,” says the shuttler, known for the sting in her smashes. “I don't cook at all but hope to some day,” she adds. Till then, her mum's goodies, including the pork curry patent to Coorg, fuel her exploits on court. A solitary mirror, over half a century old, overlooks Ashwini's room.  A rosewood round table holds varied knick-knacks, while the wardrobe is chock-a-block with clothes, shoes et al. An upright Li Ning bag in another corner carries her badminton gear. Mother and daughter have an eye for footwear, the duo possessing over 50 pairs, not including Ashwini's badminton sneakers. “I hope to study interior designing,” says the B Com graduate of St. Mary's College, Yousufguda. Further studies may have to wait as the badminton calendar keeps hers hands full, with much jet-setting still left to be done.
HBL

RBI Showcases rare currency Notes in Exhibition at Ahmedabad

FKCCI Interactive Meeting

Uma Shankar, Regional Director, RBI, Karnataka being greeted by JR Bangera, President, FKCCI during an interaction meeting at FKCCI also seen K Shiva Shanmugam, Senior Vice President, FKCCI and R Shivakumar, Vice President, FKCCI, in Bangalore on Friday 11th November 2011
 

Indian banks not facing any stress: RBI

Amid contradictory ratings by global agencies, the Reserve Bank today said Indian banking sector is not facing any stress, though state-owned lenders need capital infusion. "Overall, we don't see any fundamental stress on the banking system as a whole. So we are nowhere close to the problem," RBI Deputy Governor Subir Gokarn told reporters on the sidelines of an Assocham event here. His comments come within days of ratings firm Moody's downgrading the outlook of the Indian banking system to 'negative', from 'stable'. Another rating agency Standard & Poor's, however, upgraded the ranking saying domestic regulations in India are in line with global standards. "There are of course long term issues of capital. If the system is growing at 20% a year, it needs the capital to grow at 20% at a year... It is not any indication of systemic threat," Gokarn added. He, however, admitted that there could be some pressure points on the banking system on account of high interest rates. The capital requirement of PSU banks, including SBI, for the fiscal has been estimated at between Rs 10,000-20,000 crore. The government has already made a provision to infuse Rs 6,000 crore in public sector banks in the current fiscal. As regards the increase in non-performing assets (NPAs) of the banking sector, he said, "NPAs are increasing, but it is not dramatic". NPAs of state-owned banks have increased to 2.31% of their assets at the end of March 2011, from 2.27% in the year-ago period. As at the end of September quarter, the gross NPAs of country's largest lender SBI stood at 4.19%, higher than 3.38% in the year-ago period.
BS

Time for RBI to rethink its monetary tightening policy: Kaushik Basu

As growth in industrial production plunged to a two-year low of 1.9 per cent in September, a senior finance ministry official today said the time has come for the Reserve Bank to "rethink" its policy of monetary tightening.  "The conventional policy of interest rates ... now you do have to rethink on that," Chief Economic Advisor Kaushik Basu told reporters.......

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RBI deputy gov sees FY12 growth around 7.5-7.6 pc

NEW DELHI: The economy is expected to grow around 7.5 to 7.6 percent in the current fiscal year that ends in March, Subir Gokarn, a Deputy Governor of the RBI said on Friday, adding that the impact of rate hikes is visible on economic growth. Gokarn also said the economy is clearly in a slowdown mode. Earlier, industrial output grew at its slowest pace in two years in September, providing further evidence of deceleration in the economy and raising the odds of a pause in the central bank's 20-month-old policy tightening cycle. Production at factories, mines and utilities grew 1.9 percent from a year earlier in September, lower than an downwardly revised 3.6 percent growth a month ago and below the median forecast for a 3.5 percent rise in a Reuters poll. 
ET

RBI intervened in FX mkt in Sept after 9 mth hiatus

The Reserve Bank of India (RBI) intervened in the foreign exchange market in September, after following a hands-off approach for nine straight months, as the unit fell to its lowest level in more than two years, its monthly bulletin showed on Friday. The rupee had moved in a wide band of 45.79 per dollar to 49.90 in September. It had also dropped 8.8 percent between July and September, its worst quarterly fall in three years. The RBI has always maintained that it does not target any specific exchange rate on the rupee and only intervenes to prevent excessive volatility in the foreign exchange market. Reuters had reported in mid-September that the central bank likely sold dollars to prevent the rupee from falling sharply. RBI sold $845 million in September, while it did not buy any dollars, in its first intervention since November 2010, when it had bought $1.37 billion and sold $500 million, the bulletin showed. On a net basis, November 2010 was the RBI's biggest monthly intervention since June 2009, when it had bought $1.04 billion. In 2010, the central bank bought a net $1.85 billion, compared with net sales of $5.8 billion in 2009 when it intervened to prevent the rupee from depreciating sharply. On Friday, the partially convertible rupee closed at 50.1150/1250, 0.1 percent stronger than its Wednesday close of 50.1750/1850. Earlier in the day, it had dropped to 50.4200 against the dollar, a level last seen on April 28, 2009. 
Moneycontrol

RBI allows RRBs for third party account pay in drafts

The Reserve Bank of India (RBI) today allowed regional rural banks (RRBs) to collect account pay drafts, pay orders for crediting proceeds to third party accounts with certain restrictions. Till date, it was only allowed in case of cheques. As per the central bank, the account payee cheques or demand drafts or pay orders should not exceed Rs 50,000 for crediting it to third party account. Also, the account payee should be a customer of these cooperative credit societies. "RRBs may note that the... Prohibition and relaxation shall also extend to drafts, pay orders and bankers’ cheques," the central bank said in a notification today. Earlier, the RBI has put restriction on crediting proceeds to third party accounts by regional rural banks after the misuse of such fund transfer during initial public offers way back in 2006.
BS

Reserve Bank of India rule

RBI cancels licence of Maharashtras Solapur Nagari Audyogik Sahakari Bank Niyamit

Reserve Bank of India has cancelled the licence of Maharashtra's Solapur Nagari Audyogik Sahakari Bank Niyamit as the efforts to revive the insolvent bank proved futile. RBI said the bank is prohibited to do banking business from November 5, 2011. In a press statement issued on Friday, it said it took the extreme measure of cancelling the licence in the interest of depositors. The banking regulator has requested the state's registrar of co-operative societies to appoint a liquidator for the bank. It said Deposit Insurance and Credit Guarantee Corporation will repay deposits up to Rs one lakh to the bank customers as per the deposit insurance clause. The bank became insolvent in 2005 and its financial position continued to deteriorate in subsequent years. The banking regulator had tried to revive the bank in consultation with Maharashtra government. RBI had also levied a penalty of Rs 5 lakh earlier as it violated operational instructions issued by it in June 2006 and did not comply with it guidelines regarding maintenance of investments in government securities in 2009.
TOI

Banking industry’s 9/11

...RBI’s view has been asked for, but banks are supposed to evaluate turnaround plans, not RBI. The standard banker’s response is that .....

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Banks’ downgrade is latest warning

..................On inflation, the government has been trying to pass the buck to the RBI which has been issuing reminders to the government every three months of its fiscal responsibility. The RBI has literally been pleading with it to take steps to tackle the supply side, which is the real cause of inflation. The answer is an ominous silence. It will be interesting to see if Moody’s now downgrades India’s sovereign rating as well: it is due to have discussions with the government next week.

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UBI opens financial inclusion branches

....Speaking on the occasion, Mr. Gupta said that they have decided to open another specialised financial inclusion branch in Komati Kondapur village of Ibrahimpatnam mandal and two regular branches at Sircilla and Metpally mandal headquarters during this financial year. He called upon the farmers and others to avail loans from the bank and repay them promptly. .....

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Cure for bank failures

This refers to the article 'When Banks Turn Casinos' (ET, Nov, 10). It has observed that for reducing systematic risk in banking, limiting size is a better option compared to reducing scope. But any decree issued towards limiting the size of domestic banks would deprive these banks of their competitive edge in the international field vis-a-vis foreign banks.  However, to reduce the probability of failure of large-size banks and its consequent negative spillover on the economy, government and RBI can impose more stringent norms such as higher capital adequacy, stricter provisioning norms on non-performing loans, etc. This will help strengthen financial stability of banks. It will also allow them to reap the benefits expected from large-scale operations.
V Sridhar, Kolkata (ET)

Banks meet today as Kingfisher looks for additional support

.... Bankers said the Reserve Bank of India was unlikely to provide any leeway to the banks if loans were restructured. Banks' total exposure to Kingfisher is close to Rs 7,000 crore, of which around Rs 4,000 crore is in the form of term loans...

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In India Inc, managers' pay jumps, workers not so lucky

..............Statistics don't take into account factors such as rising efficiency where far lesser workers are needed in a plant than a decade ago. But in the financial sector, at least in commercial banks, the Reserve Bank of India keeps a close watch on top management pay......

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RBI releases its Monthly RBI Bulletin for November 2011

The Reserve Bank of India today released the November 2011 issue of its monthly RBI Bulletin . The Bulletin carries three articles by top management of the Reserve Bank and five special articles, namely, (i) Financial Inclusion : A road India needs to travel (ii) Monetary Policy: Key factors Shaping Trajectory (iii) Inflation: Decoding the Dynamics (iv) Developments in India's Balance of Payments during First Quarter (April-June) of 2011-12 (v) Composition and Ownership Pattern of Deposits with Scheduled Commercial Banks: March 2010 (vi) India’s External Debt: Trend, Policy Changes and Cross-country Comparison (vii) Finances of Foreign Direct Investment Companies: 2009-10 (viii) South-West Monsoon 2011 : A Review (June 1 to September 30, 2011)..........

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Savings bank deregulation

...What might have led RBI to take this (unexpected) step? The timing, not the decision itself, was the surprise, mind, since the deregulation had been accepted, in principle, as a critical part of financial sector reforms, particularly in enabling the emergence of a proper sovereign yield curve, which would ...

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11.11.11 bonanza for millions

No connection between high interest rate and low IIP: Montek Singh Ahluwalia

... "This probably reflects the impact of RBI's interest rate hikes together with the continuous rise in inflation. With the global economic scenario also deteriorating, the RBI should not only pause but begin to reverse its interest rate hikes,"....

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Salve for savers, toil for dodgers - Returns up; black money slot scrapped

Nov. 11: Small savers and taxpayers have something to cheer about and tax dodgers something to fret about.
The government has raised the rates of interest on small savings schemes and given taxpayers a little more headroom by raising the investment ceiling on the popular public provident fund (PPF) from Rs 70,000 to Rs 1 lakh.
The interest rate increases on the small savings instruments were generally higher than those recommended by a committee headed by RBI deputy governor Shyamala Gopinath, which submitted its report in early June after a comprehensive review of the national small savings fund (NSSF).
The interest rate on the post office savings accounts was raised to 4 per cent from 3.5 per cent. But it is difficult to say whether the small savers will be greatly enthused about the rate hike especially after the RBI recently deregulated savings bank rates, prompting several private banks to woo customers with the offer of as much as 6 per cent.
The new small savings rates will come into effect from dates that will be spelt out in a separate notification. “The interest rate for every financial year will be notified before April 1 of that year,” said a notification issued today.
The big change is that the government has accepted the committee’s recommendation to scrap the Kisan Vikas Patra (KVP) — a popular cash certificate which currently doubles investment in eight years and seven months. The committee had said that the KVP was a bearer-like certificate with a regulated premature closure facility and was open to abuse by tax dodgers. They can be bought or sold without going to the post offices.
The KVP accounted for 25.58 per cent of the total outstanding of Rs 619,908 crore under all small savings schemes at the end of March 2011. Once the scheme is wound up, black money operators who have used the KVP route for years will have to look for another place to hide their loot. The maximum investment in post office savings bank account has been kept unchanged at Rs 1 lakh for individual accounts and Rs 2 lakh for a joint account. The PPF account holders will be pleased to learn that they will now earn a rate of interest of 8.6 per cent against 8 per cent at present. However, there is a flip side: if they opt to take a loan from the PPF account, they will have to pay a higher rate of 2 per cent against 1 per cent at present.The National Savings Certificate (NSC) — a preferred tax-saving instrument — will now be offered in two maturity brackets of five and 10 years.The 5-year NSC will carry a rate of interest of 8.4 per cent against 8 per cent at present. The 10-year NSC will offer 8.7 per cent. The NSC, however, isn’t expected to qualify as a tax-saving instrument after April next year when the government is due to implement the direct tax code that awaits parliamentary approval.The maturity period on the evergreen post office monthly income scheme has been reduced to five years from six at present with the interest rate to be realigned to the five-year government security (G-Sec). It will pay 0.25 percentage point more than the yield on the five-year G-Sec. MIS account holders will, however, no longer get the 5 per cent bonus on maturity.The rate of interest on most small savings schemes will be linked to the government securities of similar maturity and usually offer 0.25 per cent more than the yield on the G-Sec.There are, however, two exceptions: the 10-year NSC will offer half a percentage point above the G-Sec yield. The senior citizens’ savings scheme will offer 1 percentage point more than the 15-year G-Sec.The investment ceiling of Rs 15 lakh on the senior citizens’ savings scheme hasn’t been changed. Interestingly, the government has decided to slap a penalty for premature withdrawal from post office fixed deposits. Until now, one could withdraw a post office fixed deposit without any penalty after the expiry of six months from opening the account.  Now, on premature withdrawal a year after opening the account, the applicable interest rate will be one percentage point less than the interest rate payable on fixed deposits of a similar maturity. If the fixed deposit is withdrawn before 12 months from opening the account, the depositor will get only 4 per cent interest.  The government has also changed the agency commission for small savings schemes. Agents selling post office small savings schemes will no longer earn any commission on selling PPF and senior citizen savings schemes (SCSS). For all other schemes, the agency commission has been reduced to 0.50 per cent from 1 per cent. The rationalisation of the small savings schemes became necessary because the asset-liability mismatch had reached an alarming level of Rs 36,932.38 crore, according to the report prepared by the review committee. Because of the loss on the income and expenditure account, there has been an excess of liabilities compared to assets built over the years, the report said.  “If the asset-liability mismatch is allowed to continue, it will create an unsustainable fiscal burden on the government,” said Ficci secretary general Rajiv Kumar, a member of the committee. 
The Telegraph

Govt hikes interest rates on post office savings

In a move to make small savings more lucrative, the government on Friday raised the interest rate on post office savings accounts to 4 per cent from the present 3.5 per cent. Similarly, the interest rates on PPF accounts were also increased to 8.6 per cent from the existing 8 per cent. The government also reduced the maturity period for Monthly Income Scheme (MIS) and National Saving Certificate (NSC) to five years from the current six-year-period. The five-year MIS will now yield 8.2 per cent interest, a finance ministry release said. Expanding the Public Provident Fund, the government raised the annual ceiling on investment under the scheme to Rs 1 lakh from the existing Rs 70,000. The interest on loans obtained from PPF will also be increased to 2 per cent per annum from existing 1 per cent, the notification said. In another relief to those seeking to withdraw money before the maturity period, it allowed pre-mature withdrawal from post office time deposits of one to five years. Other highlights of the decision were, a hike to the tune of 8 per cent on 5-year recurring deposits and a 7.7 per cent interest on one-year time deposit with the post office. It also sought to align the rate of interest on small savings schemes with G-Sec rates of similar maturity, with a spread of 25 basis points. The rate of interest on 10-year-National Savings Certificate, which will be introduced subsequently, will be 50 bps, whereas the interest on Senior Citizens Savings Scheme will be 100 bps, a finance ministry release said. The new interest rates will be applicable from the date of notification which will be announced soon, it said. The step has been taken following the recommendations of a committee set by the government under former Reserve Bank of India deputy governor Shyamala Gopinath, which sought reforms in the National Small Savings Fund (NSSF) by linking their interest rate with that of the market.

Kisan Vikas dropped
The Kisan Vikas Patras, which doubled investors’ money in eight years and seven months were, however, discontinued. The rates on small savings have been raised days after the RBI freed the interest rates on savings accounts in the banks, following which some of the lenders increased returns to the tune of 6 per cent on saving bank deposits making it more lucerative. The finance ministry also said the payment of commission on PPF schemes and senior citizens savings scheme will be discontinued and the agency commission under all other schemes (except Mahila Pradhan Kshetriya Bachat Yojana agents will be halved to 0.5 per cent.
DH