Compliance with Basel III norms will entail additional costs for banks: Subbarao

Dr. D. Subbarao, Governor, RBI interacts with media alongwith the West Bengal Finance Minister, Mr Amit Mitra after a brief meeting with the Cheif Minister, Mamata Banerjee on Wednesday

Kolkata, Dec. 7: The RBI Governor, Dr D. Subbarao, on Wednesday said that Indian banks will have to incur additional costs to build capital buffers to comply with Basel III rules. Though the Indian banking sector was comfortably placed to implement Basel III regulations, some banks might need additional capital, Dr Subbarao said at a meeting with bankers here. “On aggregate, banks are comfortably placed in terms of capital adequacy, but a few individual banks may fall short due to implementation of Basel III.” The Basel III rules, formulated by the Basel Committee on Banking Supervision following the financial crisis of 2008-09, require banks to shore up their capital and liquidity buffers, and will be implemented in phases from 2013. The implementation of Basel III will lead to an increased cost of borrowing for Indian companies both in the domestic and overseas markets, Dr Subbarao said. Banks should look at trimming the interest rates on advances and hiking those on deposits in order to achieve a double-digit growth. “For double digit growth we need more deposits, and this (more deposits will come in) happen if banks provide attractive interest rates on deposits,” he pointed out. The demand for credit is set to rise, he added.

Dr Subir Gokarn, Deputy Governor, Reserve Bank of India, said that the apex bank would not want to compromise its monetary stance to manage liquidity in the system, thereby hinting that there could be little possibility of a cut in the cash reserve ratio of banks. “The cash reserve ratio is not just a liquidity tool, but also a monetary signal and the RBI will do “whatever possible” to manage liquidity, but within the confines of its monetary policy,” Dr Gokarn said at the bankers' meeting.  Talking about the rupee volatility, Dr Gokarn said, “The RBI's steps to increase inflows have helped cap the rupee movement.”  The central bank did not have a view on the value of rupee, he said. The RBI has not used large amount of reserves to manage currency depreciation. “Our approach has been non-interventionist,” he added. 

HBL

RBI rules out easing of WMA norms for Bengal

The RBI Governor, Dr D. Subbarao, on Wednesday ruled out giving any special relaxation to the West Bengal government for borrowing through the ways and means advances (WMA).  “No exception will be made in respect to ways and means advances (WMA) to any one State,” Dr Subbarao told reporters following a meeting with the Chief Minister, Ms Mamata Banerjee, at the Writers' Buildings here today. West Bengal is one of the most indebted States in the country, with an accumulated debt of over Rs 2 lakh crore. Replying to a query regarding the State's financial health, he said, “I am told by the State Chief Minister and the Finance Minister that efforts are being made to improve the situation. RBI will extend all possible support with available instruments under its disposal.” According to the RBI Governor, West Bengal's credit-deposit ratio which stands at 62 per cent is much below the national average of 74 per cent. The State government, he said, should take steps to increase the demand for loans from the agriculture and manufacturing sectors.Schemes for increasing tax revenue from small and medium enterprises (SMEs) should also be taken up by the State Government. For this necessary help should be provided to the six-lakh-odd SMEs of the State, he added. Talking about recapitalisation of the three regional rural banks (RRBs) in the state, Dr. Subbarao said: “We have requested the chief minister to provide Rs 83 crore recapitalisation support for the three regional rural banks in the state. Subsequently, the Centre will provide an additional Rs 235 crore.” According to Dr Subbarao, because of lack of infrastructure in different parts of the State, only about 4000 villages (with more than 2000 population) have been vested with banking facilities. This he said is much below the target of 7,486 villages that had to be vested by March 2012.

HBL

RBI organises awareness programme on MSME Schemes for young entrepreneurs

GANGTOK, 05 Dec: Reserve Bank of India (RBI), Gangtok Office organised a sensitisation cum awareness programme on Micro, Small and Medium Enterprises (MSMEs) Schemes for the young entrepreneurs of Sikkim on 02 Dec at the Zilla Panchayat Bhawan, Gangtok. The programme was Chaired by Special Secretary, Commerce & Industries Department, PT Euthenpa and attended by many prospective entrepreneurs to derive benefit from the various agencies which were present at the venue, informs a press release. Speaking on the occasion Mr Euthenpa urged the prospective entrepreneurs to carry out market research before starting any economic activity and assured full assistance from his Department to the participants. He also motivated them to take up those ventures which were viable and sustainable. Appreciating the initiative of the RBI he expressed confidence that the youth of Sikkim will definitely benefit from such awareness programmes and urged RBI to conduct such awareness programmes in all the districts of the State, the release mentions. The programme was also addressed by AGM, RBI, Gangtok, Anil Kumar Yadav, who informed the participants about the RBI guidelines towards extending finance in starting MSME units. He also said that since MSMEs are the backbone of the Indian economy, they deserve full support and assistance from Government Departments and finance from banks & Financial Institutions (FIs) as a priority sector. He further added that MSMEs are facing problems due to non-availability of adequate and timely finance from the banking sector for enhancement of business activities, modernisation, expansion, diversification, joint ventures and international collaborations as well as to buy or import quality raw materials, latest machinery and equipments for production of quality products. He also said that many of them do not have sufficient information, contacts and awareness about how to obtain bank finance and other financial products and support available from Government and Financial Institutions. According to the release, it was an opportunity for prospective entrepreneurs to know more about various financial facilities for enhancement of business activities, export promotion, technology upgradation and expansion under MSMEs. The programme also highlighted the formalities involved in preparing business plans, project reports and financial documents and performance results to obtain more financial support. Representatives from NeDFI, SIDBI, MSME-DI, DIC, banks and other agencies involved in MSME activities also attended the programme. An open house session was also organised to clear doubts on many aspects of starting new economic ventures, the release adds.

http://sikkimnow.blogspot.com/2011/12/rbi-organises-awareness-programme-on.html#!/2011/12/rbi-organises-awareness-programme-on.html

Obituary

Smt.KAMALA SESHADRI (86) wife of Late R.K.Seshadri (former Deputy Governor, RBI) passed away on 6 Dec. Ph:044-65510104. Survived by Indira and R.S.Krishnan. Her eyes live on through Sankara Nethralaya; Body donated to Sri Ramachandra Medical Institute. 

The Hindu

CRR is a monetary policy signal: Subir Gokarn



CRR is not just a liquidity tool but is also a monetary policy signal and we are as of now still in a situation where inflationary pressures are high, said Subir Gokarn



Kolkata: The cash reserve ratio is not just a liquidity tool but a monetary policy signal, a deputy governor of the Reserve Bank of India (RBI) said on Wednesday amid market speculation it may lower the ratio in order to ease tight liquidity in the banking system. “CRR is not just a liquidity tool but is also a monetary policy signal and we are as of now still in a situation where inflationary pressures are high,” Subir Gokarn said. “Whether using an instrument that is part of monetary toolkit to address liquidity issue is certainly a debate which we have to engage in,” he said in an address to bankers. Cash reserve ratio is the proportion of deposits that banks need to set aside with the central bank as cash. The ratio now stands at 6%.

Mint

"Food Inflation : This Time It's Different"

Pune

CRR Cut Under Consideration, Says Gokarn

The Reserve Bank of India is considering a cut in cash reserve ratio, among other things, amid tight liquidity in the money market and rising demand for easing of monetary conditions to face economic slowdown, a senior central banker said.  “There is a lot of debate over CRR cut. It’s under consideration,” the Reserve Bank of India deputy governor Subir Gokarn told members of the Bankers’ Club at the Bengal Chamber of Commerce and Industry. “Excessive borrowing through LAF is beyond our comfort level. We do think excessive withdrawal from LAF may be stressful for banks even if it may not strain the system as a whole.” Demand for monetary action by RBI is gaining momentum despite the central bank’s stated stance of anti-inflation. With economic growth slowing and the threat of contagion from Europe strengthening, there is a belief that there could be some monetary action. Furthermore, the liquidity in the system is also under stress with banks borrowing substantially more from the Liquidity Adjustment Facility, or LAF, of RBI than what it desires.  Banks have been drawing an average of . 1 lakh crore daily from RBI since November 24 using the LAF window at 8.5% repo rate. The regulator’s comfort level is 1% of net demand and time liabilities, which is about . 60,000 crore. The above average borrowing has fuelled speculation that RBI may cut CRR by 50 basis points from 6% to inject liquidity into the system. RBI will announce its mid-quarter policy review on December 16.  But Gokarn maintained that CRR is a monetary tool — intended to exhibit its stance on direction of interest rate, rather than one to manage the liquidity in the system. “Whether using an instrument that is part of monetary toolkit to address liquidity issue is certainly a debate which we have to engage in,” Gokarn said. However, a section of the market feels that a relaxation in the reserve ratio may not be used as inflation is still quite high and there are no signs of moderation, although food prices have started showing signs of a decline after 38 months. Gokarn said RBI will continue to do more open market operations to inject liquidity and the third one is lined up on Thursday to release . 10,000 crore in the system.

ET

RBI tells banks to draw roadmap on financial inclusion

Mumbai: To ensure uniform services across the country, banks have been advised to draw a roadmap on setting up banking outlets in every unbanked village with a population of more than 2,000 by March 2012. Underscoring the importance of entrepreneurship, Reserve Bank of India (RBI) deputy governor KC Chakrabarty said at an awards ceremony that about 74,000 unbanked villages have been identified and allotted to various banks through state-level bankers committees (SLBCs). “As at the end of September 2011, as reported by the state-level bankers' committees of various states/Union Territories, banking outlets have been opened in 42,079 villages across the various states in the country. This comprises 1,127 branches, 39,998 business correspondents and 954 other modes like rural ATM mobile vans,” he added. The RBI has also advised banks to roll out financial inclusion plans (FIP), encouraging multiple channels of lending and enhancing the scope of the business correspondent model, improving credit delivery procedures in micro and small enterprise (MSE) sectors and encouraging adoption of ICT solutions in villages with a population of less than 2,000, he said. Chakrabarty also made a mention of the RBI’s efforts towards educating masses at the grassroots by setting up financial literacy-cum-credit counselling (FLCC) centres in all districts. As on March 2011, 252 FLCCs were set up in various states of the country, he added. Moreover, banks were advised to achieve a 20% year-on-year growth in credit to micro and small enterprises, he said, adding that the Reserve Bank is closely monitoring the achievement of targets by banks on a quarterly basis.  Based on the recommendations of a working Group, the limit for collateral-free loans to the MSE has been increased from the earlier  R5 lakh to R10 lakh and it has been made mandatory for banks, he said.

FE

World Disabled Day - No charity, but Financial Inclusion

......... There are certain procedural guidelines for banking facilities to visually impaired persons where the Reserve Bank of India (RBI) has advised banks that all banks must render the same services to a visually impaired person as it would to any other person without discrimination..............

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AP police plans tough measures against fake currency operators

Andhra Pradesh police, with the help of Enforcement Directorate (ED), is contemplating to attach properties of the members of the gangs involved in the circulation and smuggling of fake Indian currency notes in the state. "Circulation of fake Indian currency notes (FICN) in the state has become a challenge for the state police, but the situation is not so alarming. We wanted to take more deterrent measures to curb it," Inspector General of Police (CID) Jitender told PTI. "However, the situation was was definitely a challenge for us. Since the state police is vigilant and careful, a number of gangs involved in the circulation of FICN were detected in a year," the IGP said, adding that cases of fake currency of various denominations, at the face value of Rs one crore, were detected and reported annually. "We have written to the ED, which sought information about the FICN cases reported in the state. We have also asked the central agency to register cases under the Prevention of Money Laundering Act (PMLA) against those, who were allegedly involved in the circulation and smuggling of fake currency, as it is one of the scheduled offences, so that whatever properties they have purchased with this money, can be attached," he said. Besides the ED, the state police is also coordinating with the National Investigation Agency (NIA), Intelligence Bureau (IB) and Reserve Bank of India (RBI) to curb the circulation of fake currency in the state, he said. Most of the gang members, involved in the smuggling of fake currency, belonged to West Bengal, Jitender said, adding that the state police has already written to the Director General of Police and Additional DGP (CID) in that state to take concrete measures against the menace. 

MSN News

'Moral education must to weed out corruption'

The root cause of corruption, which has taken a shape of an epidemic in the country, is sharp deterioration in moral fibre of society, says DR Mehta, former deputy Governor of Reserve Bank of India and former chairman of SEBI.............

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Legitimacy for Microfinance in India: It’s Been a Long Time Coming…

... This bold step goes a long way towards giving the microfinance industry in India the legitimacy it has sought for more than a decade. Much of the credit for the RBI’s expediency in moving this forward should go to the team at MFIN and Sa-Dhan for their relentless efforts and representations to the RBI....

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MFIs concerned over raising funds post RBI guidelines

Even as most microfinance institutions (MFIs) have welcomed the Reserve Bank of India (RBI)'s move of bringing them under its direct regulation as a non-banking financial company (NBFC), the former have expressed concerns over meeting capital requirements prescribed in the guidelines issued by RBI. Last week, RBI had issued guidelines for NBFC-MFIs to have minimum net owned funds of Rs 5 crore, up from Rs 2 crore earlier and capital adequacy ratio (CAR) of 15 per cent, up from 12 per cent earlier. Players operational in Gujarat's microfinance space raised concerns stating the fund raising would become a major challenge in current times. According to industry insiders, the bitter experience of Andhra Pradesh crisis continued haunting the microfinance industry till recently and uncertainty looms over the investments through equity or bank finance. "It is a positive development for MFIs. But the situation has not changed much for this industry. Bringing equity investment looks difficult as the net capital requirements have been increased to Rs 5 crore," said Jayshree Vyas, managing director of Shree Mahila Sewa Sahakari Bank (Popularly known as Sewa Bank) in Ahmedabad. "After the Andhra Pradesh crisis, bringing funds has became a major concern for MFIs. However, post RBI guidelines some new MFIs may start operations, but at the same time several small NGOs having microfinance operations may close down, which may go against the objective of microfinancing," she added. However, Mathew Titus, executive director, Sa-dhan, a microfinance association based in New Delhi, maintained that it may create difficulty for MFIs to met the set CAR and net-owned capital requirements, but by putting them under NBFC category, the apex bank has brought under its gamut. "Raising capital for NBFC-MFIs should not be a problem, the bank finance would be available for them after RBI intervention. But the enforcement of the regulation should have been extended by a year or so, giving some room for the industry to come to normal from its past impact," said Titus adding that in the current situation, it would be difficult to raise capital through equity or bank finances. Meanwhile, many in the industry have set their eyes on microfinance bill to be tabled in the Parliament during ongoing winter session. The draft bill proposes a minimum equity capital of Rs 5 lakh and making it mandatory for MFIs to register with the RBI. "There are a few MFIs operational in Gujarat market, while giving them NBFC status would be an encouragement for new entrants. This is a more systematic approach decided by RBI for the MFIs in the country. However, we may also see some mergers and acquisitions of the smaller NGOs or MFIs with networth of about Rs 1-2 crore due to regulatory requirements," said Jayendra Patel, MD, Arman Financial Services Ltd, an Ahmedabad-based BSE-listed diversified MFI. According to Patel, the proposed microfinance bill may bring some relief for small MFIs. Many national players in microfinance have started scaling down their presence in Gujarat due to lukewarm response after the Andhra Pradesh crisis, he added.

BS

Government to bring bill in assembly to regulate financial companies

JAIPUR: The state government has speeded up the process to have a separate law to check cheatings by fly-by-night financial companies like the Gold Sukh Trade India Ltd. The provisions for such a law were discussed at a meeting between the senior officials of the state government and the Reserve Bank of India here on Wednesday. According to sources, the government was keen on drafting a regulatory bill that could be introduced in the assembly at its next session. The meeting on Wednesday was the first in this regard and a series of discussions involving the RBI officials and financial experts would follow in the coming days. Sources said the state government wanted either the RBI to amend its rules and regulations to check fraudulent financial companies, including the multi-level marketing firms that vanish with the investors' money, or let the state government to allow such companies to operate only at the recommendations of the district collectors. The RBI officials apparently objected to the second proposal saying it would amount to government stopping people from doing businesses. Provisions of the proposed Rajasthan Protection of Interests of Depositors (in financial establishment) Bill 2005 were discussed by principal secretary (home), GS Sandhu with the RBI officials and the police officers at the secretariat on Wednesday. In the past the bill was passed by the cabinet and sent to the Centre for its approval. The Centre, however, sent it back to the state government with some recommendations and since then the bill has been pending. With a serious of cheating cases surfacing all over the state in the past couple of days, the government has revived its efforts to get the bill signed into a law aimed at protecting the small investors. The Gold Sukh company, a multi-level marketing firm, alone is alleged to have duped a lakh of small investors all over the state. The government is even considering having a separate regulatory body for the non-banking financial firms that lure small investors with a promise to pay high returns. The government wants that such a regulatory body should have powers to take stringent action against financial institutions that fail to return the investor's deposit or interest. The bill under consideration has a provision to slap 10 years imprisonment along with a fine on the company owners who default in repayment of deposits. It allows seizure of establishment the company's assets. "One of the key features of the bill would be to define deposits. All transactions not coming under the banking or non-banking regulations will be included in the bill," a source, associated with the bill drafting, said. The definition of deposit is likely to cover any money deposited either in lump-sum or in instalments with a firm that assures an interest or a return of any kind or any service, said sources.

TOI

Himachal Pradesh: 174473 units financed by the Banks for different activities

Shimla: Smt. Rajwant Sandhu, Chief Secretary disclosed that the banks have disbursed loans amounting to Rs. 4496 crores to finance 174473 units for various activities under annual credit plan 2011-12 thereby surpassing the half yearly targets by 127 percent. She said that deposits with banks have increased by 24 percent over previous year reaching Rs. 45045 crores. She was presiding over the 122nd State level Bankers Committee meeting here today. Additional Chief Secretaries, Principal Secretaries, Secretaries, Heads of Departments, Shri S.K. Jindal, Director, Financial Services, Ministry of Finance, Govt. of India, Shri Jasbir Singh, Regional Director RBI, Shri Naresh Gupta, Chief General Manager NABARD attended the meeting. 

http://www.orissadiary.com/Shownews.asp?id=30672

Advances grow faster than deposits at UCBs in Gujarat

Advances by the urban cooperative banks (UCBs) in Gujarat have outperformed deposits during the financial year ended March 31, 2011. The advances grew by over 11 per cent over previous year, while deposits rose by close to 4.5 per cent on year-on-year basis.............

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Coop banks in state to go on one-day strike

Ahmedabad : Over 270 urban cooperative banks (UCBs) and district cooperative banks (DCBs) in Gujarat will observe a day's strike on Thursday, December 8, 2011, demanding income tax exemption for the cooperative banks, which was in force till 2006. Currently, cooperative banks are liable to pay a flat 30 per cent income tax on their earnings. The income tax waiver for cooperative banks, which was in force since independence, was removed in 2006-07 and the amendment to Finance Act, 2006 brought them under the income tax net by the-then congress-led UPA government. "Withdrawal of income tax exemption to cooperative banks has proved a major hurdle in the growth of this sector. Several representations have been made in this regard over a period of past five years at the finance minister level, president and ruling as well as opposition parties in the parliament. But no favourable outcome has come so far, hence we have called a strike of cooperative banks in Gujarat," said Jyotindra Mehta, president, GUCBF. The strike call will be observed by 18 DCBs, 270 UCBs and one state cooperative bank in Gujarat.

BS

RBI guidelines on MFI sector a positive: Crisil

New Delhi: The Reserve Bank's recent guidelines on the MFI sector will prove to be a positive and structurally strengthen it over the long run, ratings agency Crisil said Wednesday. "RBI's revision in provisioning norms and change in recognition of non-performing assets (to 90 days overdue from 180 days overdue) is unlikely to impact the profitability of the non-Andhra operations of Crisil-rated MFIs over the medium term," Crisil said in a study on the sector. RBI's recent guidelines have created a new category of non-banking financial companies (NBFCs) called NBFC-MFIs. The guidelines also highlight the need for transparency in interest rates, and address issues on multiple lending and coercive recovery. Key changes in the guidelines include revised provisioning norms and asset classification for NBFC-MFIs; relaxation in the minimum requirement for net owned funds, and in the minimum capital adequacy ratio requirement for 2011-12 for MFIs (micro-finance institutions) with sizeable exposure to Andhra Pradesh. Crisil said that a year after the Andhra Pradesh government promulgated its ordinance for (MFIs, leading to a major upheaval in the sector, the MFI players are redesigning their business models. Driven by moderation in growth, decline in profitability and subdued funding prospects in their core business, several MFIs are starting new ventures that are focused on secured asset classes or leveraging their branch networks to offer other retail products, it said. "While most of these new business initiatives are at an early stage, MFIs' ability to develop systems and processes, and scale up operations will shape their business risk profiles," Crisil Director Nagarajan Narasimhan said. The MFI sector's growth and profitability prospects have moderated since implementation of the Andhra ordinance, because of the subdued funding environment and operating challenges associated with regulatory restrictions on multiple lending, loan size, and end-use of loans. While there has been some regulatory clarity and selective lending by banks in the last few months, funding to the sector has not picked up. Crisil-rated MFIs have raised Rs 500 billion from banks and alternate sources in 2011-12 much lower than the pre- ordinance levels, it said. MFIs are, therefore, diversifying their business models by starting new ventures aimed at entering other asset classes mostly secured, such as loans against gold jewellery, housing and vehicle financing loans), Crisil said. Some MFIs have moderated their growth plans, while others have opted to leverage their branch network to offer retail products, it added. 

Zee News

The two values of domestic currency

... One of the myths is that while it is virtuous for the central bank to keep the domestic value of the currency stable—indeed, this is the primary function of central banking—the external value should be left for the market to decide..........

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Deteriorating risk profile

The Financial Stability and Development Council is due to meet in Kolkata this week to discuss the health of the Indian financial system. Also, the Reserve Bank of India (RBI) will release the latest edition of its financial stability report later this month. Both developments deserve to be watched closely......

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Remedy against bankrupt banks

....... Relying on various decisions of the apex court, the Commission held that where the law does not prescribe limitation, the court would import the concept of "reasonable time". If a bank cannot be revived within a reasonable time, the banking licence should be cancelled and the bank ordered to be wound up. The DICGC must pay the amount covered by the insurance as soon as such liquidation order is passed, without waiting for further orders from the liquidator. Otherwise, it would be torturous to the poor depositors who may have to wait for years for the cumbersome procedure whereby the liquidator crystallises the amounts due to each depositor.....

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Standardising Banks’ Most Important T&C

Since August, pre-payment penalty, or rather its waiver, has been in the news. First, it was due to the RBI-constituted Damodaran committee’s report recommending the abolition of this fee for floating-rate borrowers, even in the case of a switch to another lender. Then, the banking ombudsmen threw their weight behind this suggestion, and then the Reserve Bank of India decided to persuade banks to implement this proposal. A diktat from the National Housing Bank to housing finance companies to do away with the penalty followed. Add to this the fact that rising interest rates have prompted borrowers to fast-track pre-payments.  Thanks to the din around the pre-payment penalty, several other recommendations of banking ombudsmen have not received the attention they deserve. Apart from pre-payment charges, the ombudsmen identified nine other action points pertaining to customer services in banks. The first one is standardising the most important terms and conditions (MITC) for at least 10 important banking transactions. This will minimise any scope for confusion due to the various interpretations of these terms and conditions.  MITC is put up on all banks' and credit card issuers’ websites and customers would do well to read the fine print to avoid nasty surprises later, particularly in terms of charges and interest rates concerning credit card transactions. The next key suggestion relates to putting in place the infrastructure to enable a customer view information on all his/her banks accounts in a single window. Termed ‘One view’, it is already being offered by some banks. The ombudsmen have set a deadline of one year to complete the process, which will make it simpler for customers to keep track of all their deposits and loans across banks. The ombudsmen also put forth a suggestion to consider awarding monetary compensation to customers for any mental harassment (by bank officials). Another proposal that could bring relief to customers is the suggestion pertaining to ATM/ internet-based banking transactions. The ombudsmen have stated that in the event of any monetary dispute involving the customer and the bank, the onus should be on the latter to prove the customer’s negligence or mistake. They have also advocated compensating the customer for any loss arising out of non-authorised transactions.  Debit and credit card holders can also hope for insurance of ‘some reasonable amount’ to cover any fraudulent transactions made using their plastic money. The banking ombudsmen’s recommendations also seek to eliminate any ambiguity over the total interest payable. For, among the 10 action points is one on stating upfront the annualised all-in cost, that is, the annual effective rate, on loan accounts. With RBI’s last credit policy for this calendar year due this month, borrowers can hope to see at least some of these recommendations becoming final guidelines. 

ET

There is not much of a liquidity pressure in system: Anjan Barua, SBI

.... First of all, I do not expect the Reserve Bank to cut the CRR nor do anything with SLR at this moment. Though, newspaper reports and TV Channels have been reporting that there is a liquidity strain in the market. But what we have seen of recent days and in the recent weeks there is not much of a liquidity pressure in the system as of now for Reserve Bank to cut the CRR or even tinker with SLR at this moment..........

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The case for RBI intervention in today's forex market

.....The rupee's exchange rate is said to be market-determined, with the Reserve Bank of India (RBI) intervening only to prevent excess volatility. But if this is the regime, the situation should be ripe for intervention, because of recent excessive volatility............

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Underpricing of loans posing risks, say banks

...Product innovation in banking is good because it helps in hedging risks and staying profitable. Shyamala Gopinath, former Deputy Governor, Reserve Bank of India, said banks need to be careful while innovating. “At the heart of the 2008 financial crisis was a $60 trillion outstanding in derivatives and the value of the underlying bonds were only $6 trillion. Such kind of risks should be avoided. That is why in India we have introduced only the plain vanilla credit default swaps (CDS),” Gopinath said. In this case, a credit protection can be given only if the seller has the underlying security......

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India Telecom 2011 Offers Integrated Business Networking

...Another session focused on how the Mobile has become a Powerful tool for enabling financial services chaired by Mrs. Usha Thorat, former Deputy Governor, Reserve Bank of India & Director, Centre for Advanced Financial Research and Learning. The session witnessed eminent panelists like Mr. A. P. Hota, Managing Director and Chief Executive Officer, National Payments forum of India; Mr. R. Karthikeyan, Chief General Manager- Corporate Strategy & New Businesses, State Bank of India;........

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