3-day global meet on fin inclusion begins at XLRI

JAMSHEDPUR: XLRI has geared up to host the three-day global meet on financial inclusion commencing on Thursday. Noted personalities from the field of banking, finance services and insurance (BFSI) are scheduled to deliberate on ways and means to make finance and insurance work for the poor in the three-day meet. Reserve Bank of India CGM Deepali Pant Joshi, SBI MD and group executive A Krishna Kumar, BSE deputy CEO Ashish Chauhan, NABARD CGM Niraj Kumar Gupta, ICPRD chairperson Dr Nandini Azad and Dr David Dror, chairman, Micro Insurance Academy, among others, will be the key speakers at the meet. "Financial inclusion is a priority for India today and to ensure it, the biggest challenge is of inclusive growth. Moreover, a suitable framework for financial inclusion is also of paramount importance," said XLRI professor H K Pradhan.The meet will discuss and sketch a possible road map for building an inclusive financial sector, serving the poor and marginalized communities, including micro entrepreneurs, who belong to the lower rung of the economic strata. "The workshop will serve as a forum for intensive discussion among researchers, policy makers as well as field interveners involved in financial inclusion," said a member of the organizing committee. The event will also witness presentations of success stories by innovators that can be replicated everywhere.

TOI

A brave new world of microfinance

.............. For Andhra Pradesh-based MFIs, the worst is far from over. The latest blow comes from the new RBI regulations which said a non-banking finance company microfinance institution (NBFC-MFI) would have to make 100 per cent provisions on aggregate loan installments overdue for 180 days or more. The new norms are effective from April 1, 2012. As a result most Andhra Pradesh-based MFI, expect for SKS, run the risk of have a negative net worth if the guidelines are not revised…………………..

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M. G. Sanghvi is new CMD of Syndicate Bank

Mr Madhukant Girdharlal Sanghvi will be the Chairman and Managing Director of Syndicate Bank effective March 1, after the superannuation of Mr Basant Seth. Prior to this appointment, Mr Sanghvi was the Executive Director, Bank of Maharashtra.He has over 31 years of experience in various fields of banking, including branch/regional/zonal resources management, credit, treasury, planning, risk management, finance and accounts.  He began his banking career in Bank of Baroda in 1980, and later joined Dena Bank. He became a General Manager in Dena Bank in 2003. Mr Sanghvi became the Executive Director of Bank of Maharashtra in October 2008.

HBL

Mobiles as Banks

Why mobile phone companies should work as banks, for financial inclusion

India is one of the last large under-banked countries of the world. Nearly 500 million people, more than the combined populations of Brazil and the US, do not have a bank account. Many others have one, but can’t use it. The Reserve Bank of India (RBI) wants inclusive banking and claims that by June last year, banks have opened 80 million new accounts in more than 1,00,000 of India’s 6,30,000 villages. Unfortunately, that number hides a more sobering reality — only about 15 million of these accounts are active. The rest, for many reasons including the inability of unlettered people to fill out deposit or withdrawal forms, have only paltry sums of money and are unviable for users and banks. To reach the rural poor, banks were supposed to employ agents, called banking correspondents (BCs), who’d go around collecting deposits and delivering cash. The model has flopped, because the BCs are too few, get paid too little and are seldom there when people need them. Village headmen, who were supposed to keep off other people’s cash, are now getting their relatives appointed as BCs. Sarkari technocrats talk about inclusive banking, electronic fund transfers and weeding graft out of the subsidy and welfare delivery systems; the reality is harsher. Yet, there’s a way to cut through the tangled web of inefficiency, poor incentives and corruption. India’s telecom companies have spread to every corner of the country. All mobile companies have become adept at handling low-value transactions of very large volumes, for profit. This is a valuable skill. Why not give mobile companies, or joint ventures between phone companies and established banks, licences to act as banks in rural India? The SIM card vendor in rural India is also the local paanwallah or vegetable merchant: let the mobile bank company figure out how to use him to collect deposits and give out loans. The present model of using them as banking correspondents with limited payments and transfer functions fails to go the distance. Bankers and technocrats have tunnel vision; it’ll require political leadership to prod the administration to translate the power of our telecom revolution into inclusive banking.

TOI

Industry awaits clarity on white-label ATMs

In its attempt to hasten financial inclusion across the country, the Reserve Bank of India (RBI) has decided to allow non-banking entities to set up automated teller machines (ATMs). The central bank has issued a draft circular on this issue. ATM service providers, however, say clarity on the matter is awaited...................

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Banking On BCs

............For years, the RBI has tried to get banks to open branches and reach out to people in India’s 600,000 villages but to little avail — it’s just too cumbersome and expensive. Then in 2010, it extended the definition of BC to include for-profit organisations, and banks quickly made alliances with companies from diverse industries — from consumer goods to telecom and oil companies to agri service providers — that would give them unprecedented access to the unbanked millions. Now, individual agents from these companies double up as retail agents for banks, and use hand-held micro-ATMs to open accounts, collect deposits and hand out withdrawals on the bank’s ..............

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Yellow Fever

....Compounding the weak sentiment around the stock are instances of poor corporate governance. Recently, the RBI barred a promoter entity from using the listed entity’s network to raise deposits from the public. The other issue was that of an independent director selling 13.63 lakh shares just before RBI’s diktat was made public, after which the stock crashed.......

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RBI caught between inflation and slowdown

As GDP growth falls below the ‘new normal’, rate cuts seem inevitable

For a second straight quarter, the Indian economy has grown at a rate under seven per cent, which, according to Reserve Bank of India’ s (RBI) Governor D Subbarao, is the “new normal.”……………

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Expect RBI to infuse liquidity in mid-quarter policy: SBI

...... "Today, there is a lot of mystery about what is a restructured asset. Everything restructured is seen as equivalent to NPA (non-performing asset) ... the restructuring definition should have a timeline," State Bank of India Chairman Pratip Chaudhuri told reporters outside the RBI headquarters after a two-hour-long meeting with the Reserve Bank officials………

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Don’t get too excited about a CRR cut yet

.......... The RBI will cut CRR to improve system liquidity but it will not really help in easing liquidity by much. A 50 basis-point cut in CRR can add around Rs 32,000 crore to the system, which will not help much when liquidity is short by over Rs 2,00,000 crore. One-year CD (certificate of deposit) rates have gone up by 40 basis points to 10.2 percent over the past month and the rates will not come off by much on a CRR cut................

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Fiscal deficit to dictate RBI's move

..... But the big question is what sort of fiscal policy the Budget will outline and whether it will give RBI the space and the confidence to reverse its tight policy stance. Vohra is pessimistic, saying people should not expect miracles. "India's elephantine economy will continue to lumber on, but it is unlikely you will see it dancing in 2012," he says.

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RBI cap on online payment

The Reserve Bank of India is suggesting banks to limit online payments towards mobile phone bills. The move comes after the RBI detected an increase in online fraud...........

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RBI, banks spar over definition of bad loan

The Reserve Bank of India and bankers sparred over the definition of bad loans, leaving contradictory conclusions on the issue that some say could weaken the banking system's ability to lend in the coming years...........

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Banks seek clarity in classification of restructured loans

.....Chaudhuri attended a specially-convened meeting with RBI Deputy Governor K C Chakrabarty called to assess the bad asset situation in the banking system.Chaudhuri further said the classification of a recast account is a "gray area" now and hence banks have requested for a timeline of a year-long regular repayment by the restructured account to turn it as a standard asset........

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Govt plans to tweak farm lending norms to ease NPA pressure

...... In recent times, the finance ministry has told banks agricultural lending was an issue to be taken seriously, and had come down heavily on banks that missed farm sector lending targets. The ministry also asked banks not to deploy resources in low-yielding assets, like the National Bank of Agricultural and Rural Development’s Rural Infrastructure Development Fund (RIDF). Banks are mandated to lend 18 per cent of their net bank credit to the agricultural sector (with a sub target of 13.5 per cent to direct agriculture). If a bank fails to meet the target, it invests in RIDF bonds. Due to the rise in NPAs, lenders have been cautious in lending to the agricultural sector. The share of agricultural credit to the total outstanding non-food credit declined in 2010-11. According to RBI, as of March 31, 2011, the agricultural sector received only 13 per cent of the total non-food credit.

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Bad assets will pile up, but overall situation is under control: bankers

..... Tuesday’s discussion focused on four key points. Apart from getting bankers’ view on bad debts, RBI sought to know banks’ preparedness for advanced approach under Basel II norms. Banks are to apply to RBI by June or September stating their readiness to move on to the new system of monitoring loans and mitigate risks of bad debts.......

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Timely warning

......... Whatever the RBI has done in the past has proved to be too little, too late. The Q3 GDP numbers are a timely warning for the government and the central bank; both have an opportunity to make amends through the monetary policy review on March 15 and the Budget a day later.

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RBI cautions against bad debt in aviation, power

.....“RBI did not discuss about any particular company. It only said that banks should know the profile of their customers in these sectors well and should make steps to bring down NPAs,”......

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RBI allows NMIZs developers to raise ECB

Giving a push to the mega National Manufacturing Investment Zones (NMIZs), proposed under the new manufacturing policy, the RBI today allowed the developers to raise overseas loans under the ECB route..........

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Non-agri growth at same level as after Lehman bust

The GDP (gross domestic product) growth number that matters to the Reserve Bank of India (RBI) is non-agricultural growth, since monetary policy can have little impact on agricultural output......

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Patan rapist banks on HC order

................... When Parmar's application sent from the Sabarmati central jail came up for hearing before justices Jayant Patel and Paresh Upadhyay, they observed that the system of undertaking KYC even if it is under RBI guidelines or instructions, it can be done by calling upon the account holder to produce the photocopy of document or photograph……………

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Karnataka Bank launches gift, travel cards

Mangalore, Feb. 29: Karnataka Bank Ltd has launched two more products aimed at gift and travel segments. A bank release said here that it has launched ‘KBL Gift Card' and ‘KBL Travel Card'.Ms Usha Thorat, former Deputy Governor of the RBI and Director for CAFRAL (Centre for Advanced Financial Research and Learning), launched these new products in Mangalore recently. The release said that the ‘KBL Gift Card' is available in denominations starting from Rs 500 to Rs 25,000. ‘KBL Travel Card' is available in nine currencies. This card is accepted worldwide at over 1.6 million ATMs, 25 million merchant outlets and Web sites verified by VISA. On the refund of the balance amount in the card, the release said that balance amount can be exchanged at identified branches of the bank.

HBL

Banks still slack about security

…………….According to retired bank officer M Govinda Rao, police need to approach the Reserve Bank of India to force subordinate banks to install CCTVs and physically fit guards. "Banks are reluctant to spend money on such essentials and only RBI can force them to act,'' he said. He also deplored the tendency of banks to not ensure iron grills around the cashier's chamber. Anyone can take money out of a cash counter in the present situation, he added……………

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