RBI miffed at banks not pushing mobile banking

The Reserve Bank of India (RBI) has pulled up banks for not doing enough to promote mobile banking services, which could be a great tool to achieve financial inclusion. Although, RBI had authorised 52 banks to provide mobile banking services through the Interbank Mobile Payment Service (IMPS), only 33 banks were offering the service as of December 2011. For the calendar year 2011, the total number of transactions through the IMPS channel stood at 95,722, with the value of funds being transferred at Rs 29.68 crore. “What this means is that banks have not made a significant penetration even among their existing customers to extend mobile banking services,” said G Padmanabhan, RBI’s Executive Director, at a meeting in Chennai on Monday. Against 858 million mobile connections in India, including 292 million users in rural areas, only 55 per cent of Indians have bank deposit accounts, indicating how mobile phones have reached places where banking services could not, he pointed out.  “If there are 800 million customers in India using a mobile phone, then they all should easily be able to adapt to mobile banking too. My only concern is, ‘is it ahead of its time?’ But any technology takes time to get popular among the masses and I am sure that mobile banking too will pick up soon,” said M Balakrishnan, chief operating officer of National Payments Corporation of India (NPCI), which developed the IMPS. Of the 33 banks registered for IMPS mobile banking service, Axis Bank had issued the highest number of MMIDs (the unique ID used for mobile banking), at 49.44 lakh, followed by ICICI Bank, which issued 30 lakh MMIDs and State Bank of India with 27 lakh MMIDs. RBI took a lot of effort to promote mobile banking, Padmanabhan said, including the removal of Rs 50,000 cap for mobile transactions and the promotion of a bank-lead mobile banking service, rather than a telecom company-lead service, so that more banking services could be offered. NPCI is also working on expanding the scope of IMPS by removing the need for the recipient to have an MMID, using it for merchant payments and allowing transactions to be initiated through ATMs or over the internet. 

FC

SBBJ goes online for home loans

Jaipur: The Reserve Bank of India Deputy Governor H R Khan, launched online home loan in 20 minutes, an inhouse innovation from State Bank of Bikaner & Jaipur at banks head quarters in Jaipur on Saturday. Khan said this innovative service from SBBJ, adding that it would add to customer convenience in the present high-tech fast paced life.It is all the more creditable that such innovations are coming from a public sector bank, added Khan. Shiva Kumar, managing director, SBBJ, said that the new offering is a unique service being provided by the bank from Rajasthan with national presence. This would provide never before speed and comfort to banks customers in taking home loans. Speaking to SBBJ staff, B.P.Kanungo, Regional Director, RBI, Jaipur said that a major cause of complaint against bank is delay in sanction of loan. This product of SBBJ will address this problem completely, he added. Kumar said that a strong and proper backend has been created for the home loan offering in twenty minutes. Banks online business centre at Jaipur shall monitor each online application individually. He said the service has been developed with zero cost, using in-house capabilities and expertise.

TOI

Reserve Bank of India says no to CRR cut for now

The Reserve Bank of India has ruled out the possibility of a cut in the cash reserve ratio, or CRR, in its monetary policy review on January 24, according to bankers who took part in the customary pre-policy meeting held by the central bank on Tuesday. RBI Deputy Governor Subir Gokarn told them that "lowering CRR will be contradictory to the anti-inflationary stance we (the RBI) have taken," the bankers said after the meeting. CRR refers to the amount banks have to keep with the Reserve Bank of India. Currently, the CRR is 6% of total cash deposits a bank has. The amount kept with the bank under CRR does not earn the banks any interest.  Bankers, however, said a CRR cut was necessary since liquidity was still under strain. They pointed out that borrowings from the RBI's daily liquidity adjustment facility, or LAF, has been beyond the central bank's comfort zone of +/- 1% of the banking system's net demand and time liabilities ( NDTL) for quite some time, indicating a strain on liquidity. A CRR cut would address this situation, they said. The LAF window enables banks to borrow from the RBI on a dayto-day basis by placing government securities. Bank borrowings on December 22 went up to RS 1.73 lakh crore. The average borrowing from the RBI's repo window since December 15 has been over Rs 1 lakh crore. Gokarn also reportedly told the bankers that "borrowing from the marginal standing facility window is no longer a stigma, like it used to be some months back", indicating that banks can utilise the MSF window to meet their daily asset-liability mismatches. Banks can borrow from the MSF window at 1% higher than the repo rate (8.50%). In the meeting, bankers also requested the RBI for concessions in the second round of restructuring for loans given to textile and steel companies. Industrial production in October 2011 fell to -5.1%, while RBI has raised key policy rates 13 times since March 2010. All this has affected the quality of assets for banks, especially from interest-rate sensitive sectors. Gokarn also mentioned that the situation in Europe continues to be fragile, while there is stability emerging in the US.

ET

VITALINFO - A useful Dailyzine................

Andhra MFIs seek time to meet capital adequacy norms

Microfinance institutions in Andhra Pradesh have urged the Reserve Bank of India (RBI) to allow them more time to meet the new capital adequacy norms, as they are not able to raise fresh funds because of the crisis in the sector. The Micro Finance Institutions Network (MFIN), the industry body for micro-lenders in India, has approached the central bank for an extension of the deadline beyond March 31, 2012, three people familiar with the development said. In December, RBI said the minimum capital adequacy ratio for any non-banking finance company microfinance institution (NBFC-MFI) must be 15 per cent. The central bank, however, said microfinance companies with more than 25 per cent of loan portfolio in Andhra Pradesh could maintain a minimum capital adequacy ratio (CAR) of 12 per cent in the current financial year. But from April 2012, these micro-lenders will have to maintain the !5 per cent rule. “In principle, RBI’s move to extend support to the sector by bringing it under its direct regulation is encouraging. But practically, none of the microfinance institutions, barring maybe one or two, will be able to meet the higher norms,” said the promoter of one in Andhra Pradesh requesting anonymity because of the sensitivity of the issue. "We have asked RBI to consider extension of the deadline beyond March 31. Otherwise, most microfinance companies in the state (of Andhra Pradesh) are facing the risk of losing their licence to do business," the official added. Micro-lenders said because of the crisis in the microfinance industry since October 2010, existing investors are not willing to increase exposure in the sector, while no new investors are keen in picking up stake in the beleaguered firms. The crisis began when the government of Andhra Pradesh, the largest market for microfinance companies in India at that time, passed a legislation that banned weekly repayment of micro loans. It curbed micro-lending activities and eroded profitability of microfinance companies operating there. Microfinance companies said in many small firms the additional capital requirements to meet the new norms are so high that promoters alone cannot cover the gap and will have to depend on existing and new investors.“To meet the new capital adequacy norms, we need to bring in capital that is higher than our existing equity base. In this environment, where banks are reluctant to offer fresh loans, it is impossible to convince private equity players to invest in our company,” said the CEO of a Hyderabad-based microfinance firm. 

BS

RBI to release Rs 5 coins to commemorate ICMR centenary year

Mumbai, Jan 10 (PTI) The RBI will shortly come out with coins of Rs 5 denomination to commemorate the centenary year of the Indian Council of Medical Research. In a statement, the Reserve bank said the coins will be circular in size with a diameter of 23 millimetres and made of nickel brass. On one side, the coin shall bear the Lion Capital of Asoka Pillar and the denominational value of Rs 5. On the other side of the coin, the name of the Indian Council Medical Research will be mentioned. The existing coins of Rs 5 denomination will continue to be legal tender, the apex bank said.

MSN News

SBI chairman says CRR cut unlikely in RBI review

The Reserve Bank of India is unlikely to cut banks' cash reserve ratio at its January 24 policy review, Pratip Chaudhuri, chairman of State Bank of India, the country's largest lender, said on Tuesday............

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RBI allows 4 more banks including Yes Bank & Bank of Maharashtra to import gold, silver

MUMBAI: RBI has allowed four more banks, including Yes Bank and Bank of Maharashtra, to import precious metals, further spurring competition in the world's biggest importer of bullion. City Union Bank and ING Vysya Bank have also been included in the list, bringing to 35 the number of banks allowed to import bullion, data on the website of Reserve Bank of India showed. Gold is a regulated sector in India and the central government allows state-run and private banks to trade in bullion at the wholesale and retail level. Some listed jewellery makers such as Rajesh Exports, Titan Industries and Gitanjali Gems are also allowed to import precious metals. Jewellers sell coins and bars through retail outlets.

ET

Credit co-operatives are too big to work

It has become commonplace to hail institutions with a hoary past, irrespective of their fundamental weaknesses. However, such superfluous praise can do more harm than good to the cause of the institution and its stakeholders. A case in point was when a top functionary of the RBI recently glorified the rural credit co-operatives for following the tenets and principles of co-operation. However, it is the failure to adopt the principles and tenets of co-operation that is the bane of credit co-operatives in India. .........

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Bankers ask RBI for some relief to ailing industries

Bankers have asked the Reserve Bank of India to shift its attention to growth by giving a special dispensation for bad loans and reversing the interest rate cycle with a cut in policy rates........

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Banks may cut rates if funding costs fall: IBA

...."One has to see the funding cost coming down before any change in interest rates happen. We have not seen a change in funding cost in recent past," .......

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Who let the Rupee fall?

If the overall risk sentiment in the world improves, we could see rupee outperform other Asian currencies after the large battering it received recently, but the chances remain slim. The scales are still heavily tilted towards further weakness as the euro zone will continue to induce fears. The slowing world economy does not bode too well for growth and elevated oil prices do not look likely to fall..........

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The curious case of an unclaimed fixed deposit

....We found out that according to RBI: “If the letters are returned undelivered, they may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased.”....

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Using RTI effectively in the Financial Sector

This session on RTI will focus on the sector of Banking and Finance – your queries on regulatory bodies like the Stock Exchanges (BSE & NSE), the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), the Pension Regulator, capital markets and banks, will all be answered...

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Savings account portability: Is it worth the trouble?

....... On the face of it, encouraging investors to switch savings account with the same number portability and pursuing the most attractive interest rate offers little obvious benefit to the banking sector as a whole, especially when enhanced returns are already widely available via term deposits. Clearly, the cost-benefit ratio and its implementation are not yet fully understood by the banks. So when it comes, the debate can be expected to be lively.

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Collective investment plans may soon come under 'principal regulator'

.... "Certain individuals or companies are able to raise money from gullible individuals by taking advantage of loopholes in the legal provisions and also taking advantage of the lack of clarity about roles of different agencies such as MCA, Sebi, RBI, state governments, registered co-operative societies etc,".....

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The RBI won't save 2012

....... It is a foregone conclusion that the RBI will have to again cut its GDP growth forecast; probably to seven per cent (actual outcome could be sub-seven per cent). Thus, it will need to be seen as doing something later this month, even as it will – irresponsibly – avoid any guidance on growth and inflation for 2012-13. How the RBI expects to anchor expectations without offering one- or two-year forward guidance remains a puzzle.......

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Banks need to take care of small things to survive during economic slowdown

.... "There is a need for sensitization of banks' staff towards the needs of small entrepreneurs," KC Chakrabarty, Deputy Governor at the Reserve Bank of India, said recently. "Training is also required to be imparted to branch managers and loan officers for a change in their mindset, away from the perceived risk in financing micro and small enterprises." Coming from a central banker who has been leading the financial inclusion part of the agenda, this statement is a reflection of the state of affairs in lending to small enterprises.....

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Just 40% of India Inc's forex loans are hedged

The Reserve Bank of India (RBI) has raised a red flag over banks’ foreign currency loans to the Indian corporate sector, as data compiled by the regulator reveal only 40 per cent of their exposure has been hedged..........

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Why the RBI’s export numbers may also be a bit of garbage

..... If DGCIS is giving out “unreliable” numbers, one wonders why the RBI needs to use it. According to The Economic Times, the RBI is taking DGCIS numbers because this is what the International Monetary Fund expects it to do. “As per the balance of payments manual, IMF, which sets out the best international practices and which all member countries are supposed to follow, exports are to be recorded in balance of payments on shipments basis and not on the basis of realisation of exports,” the newspaper said, quoting an RBI spokesperson.....

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RBI to conduct another OMO

In order to tide over the tight liquidity situation, the Reserve Bank (RBI) has announced it will purchase government securities worth Rs 12,000 crore on Friday through open market operations (OMOs). “Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to conduct OMOs by purchasing government securities for an aggregate amount of Rs 12,000 crore on January 13, 2011, through multi-security auction,” the RBI said. The RBI has also purchased government securities of over Rs 49,600 crore from the money markets in six installments in the past month and half. OMOs are the “first preference” of RBI while injecting liquidity and there is an opportunity to raise up to Rs 2.74 lakh crore through the window as banks’ government bond holdings are at 29 per cent, 5 per cent over the prescribed SLR cap of 24 per cent.

IE

File complaint with police if you get fictitious offers: RBI

Mumbai: With many people falling prey to fictitious offers, the Reserve Bank Tuesday asked public to immediately register a complaint with the police or cyber crime authorities when they receive such offers of money from abroad. RBI in a statement advised "members of public to immediately register a complaint with the local police/cyber crime authorities when they receive fictitious offers of money from abroad or if they are victims of such offers. It has also placed, on its website, the list of such nodal agencies with whom the public can register complaints, the statement said. The Reserve Bank has, it said, "on several occasions in the past, cautioned the members of public against falling prey to fictitious offers/lottery innings/remittance of cheap funds in foreign currency from abroad by so-called foreign entities/ individuals or to Indian residents acting as representatives of such entities/individuals." Members of public have also been cautioned against making any remittance towards participation in such schemes or offers from unknown entities since such remittances are illegal and any resident in India collecting and remitting such payments directly or indirectly outside India is liable to be proceeded against for contravention of the Foreign Exchange Management Act, 1999. They are also liable for violation of regulations relating to Know Your Customer (KYC) norms and Anti Money Laundering (AML) standards, it said. The Reserve Bank has further stated that it does not undertake any type of money arrangement, by whatever name called, and it does not take any responsibility for recovering money remitted in response to such bogus communication, it said.

Zee News

Much required Indians

Not too long ago, they were called ‘not required Indians'. But if the mood at the recent Pravasi Bharatiya Diwas event in Jaipur was any indication, the Government is going the whole hog to woo them................

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HDFC slaps fees for cash deposits, inoperative A/ Cs

If you are an account holder of HDFC Bank, then be prepared to pay Rs. 50 per quarter for a non- operational account of over a year and Rs. 25 for depositing cash of over Rs. 1 lakh.........

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