Can't afford to let fisc run loose : S S Tarapore

........ In the absence of fiscal space for a stimulus, the chorus advocates that the Reserve Bank of India (RBI) should refrain from “monetarist” policies. There is endemic confusion in the minds of the expansionists as they label any cautionary policy as being “monetarist”. Needless to say, this is a totally erroneous interpretation of “monetarist” policies. No “monetarist” would accept India's permissive monetary expansion as being consistent with a “monetarist” policy.................

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Inflation will reaccelerate over the next few months

............Reserve Bank of India, to its credit, has remained vigilant. Remember, they have essentially nowhere indicated that the next move is to cut interest rates. They have basically given a couple of scenarios under which there will be a cut, but have not committed to that. So I’ll give them full credit and all of those factors which have been in the last policy review. So by summer, we think the Reserve Bank of India will essentially have to reverse course and essentially stop its easing of monetary policy trajectory...............

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Arua achieves 100% financial inclusion

RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year

As a part of Reserve Bank of India’s outreach programme, RBI deputy Governor Anand Sinha visited Arua village in Faridabad district of Haryana on Thursday. Arua, which is one of RBI’s model villages, has achieved 100% financial inclusion. Syndicate Bank, which has opened a branch in this village, has opened 915 no frills account for villagers in the past few months. The outreach programme is aimed at spreading the message of financial inclusion and financial literacy and checking the progress of the spread of banking facilities in the area. RBI had started its outreach programme in 2010, wherein a team from RBI goes to villages across the country and interacts with the people there about banking facilities and also helps them in getting accounts opened, guides them on how they can avail loans from banks and also tells them about various government schemes that the people can avail of. In his address to the villagers, Sinha elaborated the advantages of opening a bank account. “If you go to keep money in your homes, either it may become bad, get stolen or the value of your money will be static and won’t increase. If you keep it in the bank you’ll get returns”. Sinha said banks are using a combination of the banking correspondent model and brick and mortar branches to achieve financial inclusion. “You can’t have one model, it has to be a combo of al. Because as far as the BC model is concerned it’s very important as a brick and mortar may not be very economical. But brick and mortar branches have their own advantage”, he said. RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year. Sinha added that banks are on track to achieve this target.

Mint

Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police

1. Reserve Bank of India, Gangtok on February 07, 2012 conducted “Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police. The programme was intended to impart knowledge on detection and proper ways of disposal of Fake Indian Currency notes and give vital inputs about Non Banking Finance Companies by experts from Reserve Bank of India.

2. While inaugurating the workshop at Royal Plaza, Shri E.E. Karthak,General Manager/O-i-C, RBI Gangtok in the presence of Shri Akshaye Sachdeva, IPS, IGP, Sikkim Armed Police, Smt Mrinalini Srivastava, IPS, SP, CID, Sikkim Police mentioned that with the recent seizure of fake notes to the tune of Rs 2.25 Crore in New Delhi, it has been understood that the counterfeiters have achieved a ‘zero-error counterfeiting capability’, with all the features in a genuine Indian currency note being present in these counterfeit notes. It took the experts long hours to identify each note. The seized notes have all the basic security features of Indian Currency notes namely Micro printing-used by RBI to combat counterfeiting, Gandhi watermark, Security thread, 100% cotton paper, embossing by insertion of Intaglio images and electro yet watermark. These counterfeits are smuggled from Pakistan via Jammu to India to fund terror operations. The alternative routes for trafficking of the counterfeits are the porous borders of Nepal, Bangladesh and the sea. Nationwide raids by the National Investigating Agency has lead to arrests of 14 people smashing an international racket involving the smuggling and distribution of Fake Indian Currency notes by Pakistani agents through their Indian operatives.

3. He further stated that a lot of private finance companies, namely Bharosa, Stock Guru (now curbed) etc have been collecting deposits from the general public with the promise of very lucrative returns. These Non Banking Finance Companies have been luring gullible investors under the pretext of being deposit taking NBFCs as licensed by the Reserve Bank of India. The investors in such companies often find themselves as victims of financial frauds who under normal recourse approach police officials. In the light of such activities it becomes important to equip the Sikkim Police Officers with an understanding of Non Banking Financial Companies so that such malpractices are curbed with immediate effect.

4. Speaking to the participating officers, Shri Akshaye Sachdeva IPS, IGP, Sikkim Armed Police, Government of Sikkim highlighted the vital role the Sikkim Police has played in nabbing fraudulent NBFCs namely Bharosa, Teena Finserv and Stock Guru etc. He also indicated the problems faced by the Sikkim Police in distinguishing the legitimate areas of operations of the NBFCs. He also highlighted the issue of public dilemma in registering complaints against these companies in hopes of getting the promised returns by these companies. He also commended the pro active policing undertaken by the police in registering suo moto cases against these fraudulent NBFCs in the past. 

5. The guest faculty from RBI Kolkata namely Shri Kishore Pariyar, DGM, Department on Non Banking Supervision and Shri S.N. Mitra, AGM, Issue Department gave specialized input for the functioning of NBFCs and the features of Genuine Indian Currency notes respectively.

- As reported by Tenzing Namgyal, Executive Intern, Reserve Bank of India, Gangtok

FinMin shortlists 17 bank GMs for ED posts, to notify soon

...... According to the industry grapevine, the Reserve Bank of India (RBI)wished to discontinue with this old practice of shifting CMDs. The banking regulator was of the opinion that CMDs of smaller banks should continue to drive effort to elevate their banks to the higher level instead of stepping into larger banks. Accordingly, the regulator sent a note to the ministry of finance in this regard.........

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Rs.18.46 lakh mutilated, soiled currency exchanged at camp

TIRUCHI : The day-long special camp for the exchange of soiled and mutilated currency notes organised by the zonal office of the Indian Bank in association with Reserve Bank of India here on Wednesday evoked good response. The camp was held at the Rockfort branch premises of the Indian Bank in the city. A total of 512 persons from across the district, including the customers of other banks, exchanged soiled and mutilated currency notes worth Rs.18.46 lakh at the camp. K.Manoharan, deputy general manager and zonal manager of the Indian Bank, who inaugurated the camp, said that the main objective of the camp was to bring down the circulation of soiled notes. C.T.Muthu, AGM, zonal office, explained to the customers the techniques to identify fake currency notes, and proper maintenance of notes. The bank had conducted similar camps in Pudukottai town and three other surrounding villages a week ago.  Jagannathan, branch manager of Tiruchi main branch, and Kumaravel, branch manager, Rockfort branch, were present.

HBL

Banks seeing rise in incidents of fraud: Deloitte

“Banks have witnessed a rise in the number of fraud incidents in the last one year,” says the survey titled ‘India Banking Fraud Survey 2012’

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Parliament panel moots wider slabs for personal income tax

.......Finally, the report wants the government to impose a peak rate of 30 per cent on annual income above Rs 20 lakh, as against above Rs 10 lakh as sought in the Bill. The report is not final and minor tweaking of these suggestions could be incorporated after a meeting tomorrow, according to the persons cited earlier. Tax slabs needed to be progressive, they said, adding, “Most of the assesses would fall in the category of Rs 3-10 lakh a year, which should get a lower income tax rate of 10 per cent.”........

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RBI nod must for India offices by companies from China, Pakistan among others

MUMBAI: The Reserve Bank today said companies incorporated in China, Pakistan, Bangladesh, Sri Lanka, Iran and Afghanistan will have to seek its permission to set up branch or liaison offices in India as general permission granted to entities of other nations will not apply to them……………….

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Let’s get our data right first

.......Official data is sacrosanct and used by analysts to take their own views, which are sent out to their clients. The media makes hay with various views of experts and analysts, which then spooks the markets—stocks, money and forex. Then, ironically, various other government bodies, such as the ministries and RBI, have to formulate their policies based on these numbers and could end up taking an incorrect call in retrospect when data is revised...................

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Home loans: Buyers want RBI reply

........ They have filed an RTI application with the Reserve Bank of India demanding to know how the banks, both private and government, sanctioned the housing loans for Noida Extension in the first place considering that many developers confess that they had known all along that the area was disputed.......

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IDBI bank to launch India's first infrastructure fund

..... IDBI Bank has sought Reserve Bank of India's approval for an NBFC, which will have a capital base of 1,000 crore. The bank will hold 30% stake in the NBFC and the rest will be held by some state-run banks and Life Insurance Corporation of India.............

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Gold loan growth pace worries RBI; Muthoot, Manappuram hit

………The central bank is now considering tighter regulations for the segment, the official said. This is could be in the form of limits on the loan that a gold loan firm can give as a percentage of the value of loan. This is also known as the loan-to-value. RBI may also restrict the maximum interest that a gold loan firm can charge its customers, and also the penalties that gold loan firms can impose……..

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Containing NPAs

Apropos of the editorial “Bank on trouble” (FE, February 4), no business is without risks and banks are no exception to that. NPAs within the limit are natural but a high level of NPAs is bound to cause concern. Few banks, especially by virtue of having a high exposure to sensitive sectors like power, realty, etc, are faced with high degree of NPAs. The reasons for more loans turning non-performing in the recent times are many. Interestingly, Indian banks today have a well-defined risk management profile in place to anticipate the risks. The immediate priority should be to bring interest rates down. RBI, in its policy round up, has indicated that the need of the hour is to address the supply-side constraints. External shocks are bound to be there in the globalised economy and banks must now learn to live with those.

- Srinivasan Umashankar, Nagpur (FE)

NPA, a multi-headed monster

.....as has been pointed out in the Financial Stability Report of RBI, while Indian banks will migrate to Basle III from a position of strength, the new standards may require adjustments in lending behaviour......

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Banks raise loan costs for MFIs

With the cost of money rising and the cap on what MFIs can charge intact, microlenders are facing a tough time

..... According to the latest Reserve Bank of India (RBI) data, bank lending to micro-credit, comprising loans to self-help groups and MFIs, fell to Rs. 21,000 crore in December 2011 from Rs. 28,820 crore in the previous year........

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Who's who to attend summit on changing Bihar

PATNA: Top honchos of various fields are expected to attend the three-day Global Summit on Changing Bihar, scheduled to open here on February 17. RBI Governor D Subbarao will also attend the inaugural and valedictory sessions.......

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Assocham bats for allowing banks as intermediaries in commodities futures market

.... "By virtue of their vast branch network, banks are in a unique position to display tickers showing real-time prices of various commodities across the country which will be the most efficient price discovery dissemination that could be implemented in a very short time,"…..

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Dhanlaxmi Bank Union allege fraud, demand merger with PSU banks

…….Rumours have been doing the round that the bank is financially stressed and may report losses of around Rs 30 crore. But the Union fears that the bank may not apart from the bank not reporting any profit this quarter, some if its customers have actually withdrawn their deposits from the bank. The Union also alleges that “who resigned as MD has withdrawn his family deposit of around Rs 5 crore from the Bank.”…….

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Did Manappuram insider bail out just before RBI deposit ban?

.......... The curious case of Manapurram Finance, the loans-against-gold company that was recently pulled up by the Reserve Bank of India (RBI), keeps getting murkier. On Monday, 6 February, the RBI barred Manappuram and a related sole proprietary firm from raising public deposits, but even before the news was out, the wife of one of the company’s promoters was selling shares in the company.............

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