Banking should reach all: Suma Verma

KASARAGOD, Kerala : The benefits of banking should reach all sections of society, Reserve Bank of India (RBI) Regional Director (Kerala and Lakshadweep) Suma Verma has said. She was taking part in a face-to-face programme for the customers of the Pavoor ‘satellite branch' of the North Malabar Gramin Bank (NMGB) here on Thursday. Some of the customers said they were unaware of agriculture lending schemes, interest concessions, and subsidies offered by the banks.Some said they depended more on non-banking financial companies to meet their requirements. RBI General Manager Anil K. Sharma said those making timely repayment of agricultural loans were eligible for a concessional interest rate of four per cent. RBI Deputy General Manager K.D. Joseph handled a session on detecting fake currency. Ms. Varma distributed loan sanction letters to customers. National bank for Agriculture and Rural Development Assistant General manager N. Gopalan; NMGB General Managers U. Sreenivasa Menon and K.P. Chandrasekharan; and Syndicate Bank Chief Manager Ajith Kumar Menon attended. NGB Regional Manager D. Damodaran welcomed the gathering and Manager (Kunjathur branch) Y.K. Govinda Bhat spoke.

HBL

The e-payment transformation

With the abundance of technological solutions available, it is prudent that in public interest, the government and RBI devise means to move to a less-cash economy

…..On the other hand, the Reserve Bank of India (RBI), which has the mandate of currency management, spends a considerable amount of its revenue in managing cash in the country (printing and distribution, storage, management, accounting, etc.). The expenditure towards this cash management reduces the balances that are transferred by RBI to the government’s kitty. Similarly, the government also spends money (out of its revenue) to manage cash payments and receipts through its various departments, social programmes, etc.……..

Read...........

RBI tightens screws on non-operative NBFCs

....... "An NBFC which is in receipt of CoR must necessarily commence NBFC business within six months of obtaining CoR. If the business of NBFC is not commenced within six months...the CoR will stand withdrawn automatically," said an RBI circular..........

Read - Moneylife Personal Finance site and magazine

‘Disappointing, inflationary'

K. Mariappan, president of Salem District Small and Tiny Industries Association (SADISSTIA) said the announcement of Rs. 5,000 crore corpus for Micro, Medium and Small Enterprises (MSMEs) was disappointing. Though Reserve Bank of India (RBI) stress for collateral free loans, nationalised banks do not disburse loans without security...........

Read - The Hindu

Go for value addition, food processing, says RBI official

Reserve Bank of India Regional Director A.S. Rao on Friday exhorted people of Sivarampuram, a Financial Inclusion (FI) village of the Syndicate Bank's Tallur branch, to go for value addition and food processing to realise better price for their produce..........

.....RBI General Manager (Rural Planning and Credit Development) R.N. Das, RBI Deputy General Manager R.P. Rajput, Syndicate Bank Deputy General Manager N. Mohan Reddy, Lead District Manager J.V.S. Prasad, and NABARD Assistant General Manager M.P. Naresh Kumar were among those present.

Read - The Hindu

Higher govt borrowing may not eat up public credit: RBI

HDFC Bank Limited Managing Director Aidtya Puri (left) at Gudivada in Krishna district on Friday. RBI Deputy Governor K.C. Chakrabarty is seen

Reserve Bank Deputy Governor KC Chakrabarty today said private credit demand will not be crowded out as a result of higher market borrowing by the government even as the fiscal deficit target for next fiscal is pegged at 5.1%. "The idea of 5.1% fiscal deficit should not deprive credit needs of the society," he told PTI at an HDFC Bank event…………

Read..........

Halfway there

The finance minister needed to do three things in the Budget: control the deficit, bring down inflation, and create the conditions for faster economic growth. He can be said to have succeeded substantially, but not wholly. The unfinished task is that the deficit has been left too high, as also market borrowings which go up next year. That does not give the Reserve Bank of India (RBI) the elbow room to drop interest rates sharply, a necessary condition for the revival of private investment and of finance-backed consumption………………

Read............

Interview: Deputy Governor, Subir Gokarn

With the Union Budget out, RBI's Subir Gokarn talks about the fiscal consolidation measures taken by the finance minister and the inflationary impact of indirect taxes

Freeing Overseas Investment Possible If C/A Improves

....................Reserve Bank of India Deputy Governor H.R. Khan said on Friday that options were open on a further cut in the cash reserve ratio (CRR) for banks, but a view had not yet been taken...........

Read - Businessworld

Savings account interest get Rs 10,000 tax concession

........
After deregulation of interest rates on savings bank accounts by the Reserve Bank of India in 2011, Indian banks raised interest to 4% from 3% on saving deposits, while private banks hiked it up to 7%. Kotak Mahindra Bank is currently offering 6% interest on saving deposits while Yes Bank is offering 7%...................

Read - Hindustan Times

Budget 2012: 10 lakh annual income? Save Rs 22,660 more

An upper middle class household will have an additional Rs 22,660 at its disposal in the coming year with Finance Minister Pranab Mukherjee introducing in part the personal income tax rates and slabs proposed under the Direct Tax Code........

Read..............

Budget 2012: A new entity for helping Public Sector Banks

....... "The move to set it up as a corporation is mainly to ensure that the holding company does not come under the ambit of the Companies Act, or within the Reserve Bank of India's net as a finance company,''…….

Read...........

Budget 2012: Not enough action on fiscal correction – Rakesh Mohan

……The FM also announced some measures for further development of the financial sector , including establishing the Public Debt Management office. Given the current fiscal scenario, this is clearly the wrong time to make this change from the very competent debt management that the RBI has done for the country over the last 75 years. In the interest of financial and fiscal stability, the government would be well advised to shelve this ill-advised change in debt management….. Read.....................

Look Subbu, I shrunk the fiscal deficit. Now, about the repo cut…

Reserve Bank of India Governor Duvvuri Subbarao has been one of those avidly watching the Union budget 2012. After all, by hanging on to his stance and refusing to cut key rates ahead of the budget, Subbarao had made it amply clear that unless Pranab Mukherjee delivered on his hope of credible fiscal consolidation, there was no chance he’d cut rates too much, given the inflationary risks………

Read.......... 

Microfinance Bill in the Budget Session 2012

.......The Bill will empower the Reserve Bank of India to issue directions to Indian MFIs regarding interest rate charged from borrowers, processing fees, insurance premium, reporting to credit bureaus, and adhering to industry’s code of conduct.

Read............

Fiscal consolidation – a missed opportunity

......To the extent ECB borrowings take away a part of banks' rupee resources, there will be less available for other normal loans. Would it not be better if the RBI opened a refinance window for forex loans on terms that are competitive internationally? The advantage is there is no increase in external debt. Further, the RBI can earn a better return on its reserves than what it is getting now........

Read - HBL

MFIs want government to walk the talk on Bill

……The plea is the government must walk the talk now and avoid further delay in framing a national microfinance law as the crisis of confidence has reached a nadir. The Bill, besides recognising RBI as the sole regulator, will define the role and functioning of microfinance companies, remove ambiguity over their legal forms, focus on protection of poor borrowers and tighten monitoring of the sector.……..

Read...................

A Budget by the book

........The deficit reduction targets, too, are realistic, both from a political standpoint as well as giving the Reserve Bank of India (RBI) the elbow room that is sufficient to initiate policy rate cuts. The other positive from the Budget is that it sets the stage for a predictable and stable fiscal regime.......

Read - HBL

RBI hails fiscal measures, but evasive on rate cuts

The Reserve Bank today welcomed the Budget proposal to bring down fiscal deficit to 5.1 per cent, saying the strategy of increasing indirect taxes and capping subsidies are reliable measures to control deficit. It, however, said this will not have any immediate bearing on the central bank's monetary policy stance…………..

Read........... 

RBI growth stimulus not possible without fiscal consolidation

……..“The government has boxed itself into a corner, where the only priority is fiscal consolidation,” Walker told Firstpost in Hong Kong. And if fiscal consolidation is not No 1 priority in this budget, the RBI will be unable to deliver the growth stimulus that is required – interest rate cuts – and the government can forget about economic growth, he cautions…….

Read...........

Lowered fiscal deficit target is a positive, says Subir Gokarn

......“While it (roadmap for fiscal consolidation) is a positive development, monetary stance is not based on one factor. Fiscal numbers are not the only things that will change the policy stance. But a reduction in deficit is what we wanted from our side. There are other factors such as growth considerations and oil prices,”............

Read - HBL

Greater agri-outlay a drag on banks

.........With credit growth to agriculture moderating, the current year estimates of Rs 4.75 lakh crore will be just met. Therefore a 21 per cent jump in outlay for agriculture next fiscal is a tough ask for banks. Especially as the asset quality of agriculture loans has been under severe stress. Extension of interest subvention on agriculture loan may give some respite however this benefit is not available for private banks.

Read.................

Credit-refinance fund proposed for RRBs

A short-term credit-refinancing fund and extension of capitalisation for two more years have been proposed for regional rural banks (RRBs)...........

Read..........

Budget 2012-13: Opening of ECB to power sector meaningless, says Dalton Cap

………………As far as the RBI is concerned, the under provision for subsidies, especially fuel subsidies and the provisions is nearly Rs 1,00,000 crore because whatever has been provided, Rs 43000 is enough for the backlog. For this year, either they are going to deregulate completely and there is not going to be any subsidiary requirement or it is going to be another of these 4.6-5.9 jump. That is something that certainly would be bothering the RBI which is clearly reflected in the money markets today. There is a huge reform in subsidiary regime that is outside the Budget.……………

Read..............

Govt to infuse Rs 15,888 cr into banks

…..“For 2012-13, I propose to provide Rs 15,888 crore for capitalisation of public sector banks, regional rural banks and other financial institutions, including Nabard (National Bank for Agriculture and Rural Development),” Finance Minister Pranab Mukherjee said while presenting the Budget for 2012-13. “We are committed to protecting the financial health of public sector banks and financial institutions.”…….

Read......... 

Unions flay decision on PF

The AITUC State council has called on the Union government to quash the order slashing the Provident Fund interest from 9.5 per cent to 8.25 per cent. A press note quoting AITUC general secretary Kanam Rajendran said the Finance Ministry had ignored the demand raised by employees' representatives to raise the interest. He said the decision would affect 5 crore employees. The reduction came at a time when RBI was resorting to upward revision of interest to curb currency inflation.

HBL

Firewalls likely between banks, insurance firms

.......... “RBI has also expressed concern over banks’ exposure to insurance companies. As banks own most insurance companies, there is a concern that if either of the two sectors is in stress, it may impact the other too. RBI has proposed holding company structure to prevent banks and its subsidiaries from having cross exposure trouble in future, this will act as firewall. However, it is yet to be finalised and various issues are being worked out.”..........

Read........