Fiscal indiscipline curbs RBI's options - S S Tarapore

.......The RBI has to face a head-on conflict with all economic agents. Without appreciating the central bank's difficult task, Ministers and top officials have been sabre-rattling that it is time for a reduction in policy interest rates and, more specifically, that such easing is imminent. The RBI's own forward guidance has complicated life for it.........

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Finance ministry advises banks to popularise e-payments to reduce usage of cheques, bank drafts

…….The Reserve Bank of India has also been keen to move away from cheques and drafts. Last week, the central bank had reduced the validity period of cheques, drafts, pay orders or banker's cheques to three months from six months.

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RBI initiates creative pitch

Reserve Bank of India (RBI) looks to empanel advertising agencies in Mumbai. It has invited applications from reputed, INS-accredited advertising agencies for empanelment for a period of three years. The agencies should have the ability and resources to service all 28 regional offices of the RBI and be able to execute routine advertisements as well as multi-media, multi-lingual, pan-India public awareness programmes…………

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Banks with majority foreign stake like ICICI Bank, HDFC Bank not to be considered foreign banks

……….Officials from RBI and departments of industrial policy and promotion, economic affairs and financial services last month had decided to work out a new formulation to ensure that these banks are not constrained by the FDI rules when they pick equity though strategic investments, corporate debt restructuring or treasury operations…….

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M-Banking a powerful financial inclusion tool: K C Chakrabarty

....Way back in 2008 the RBI had recognized the mobile phone’s potential. The first set of guidelines was taken in 2008. The Reserve Bank consciously opted for a bank-led model although their approach remains technology neutral. Mr Chakrabarty said that mobile for banking in financial inclusion cannot become a viable proposition on a standalone basis if the purpose is to achieve meaningful financial inclusion. To make it viable and attract volumes, it has to be provided as a package along with other products and services. This can be achieved only by entities that can provide add-on services like emergency and entrepreneurial credit, saving facilities, other products and services such as insurance, besides remittances.......

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RBI rate cut depends on inflation outlook: Gokarn

Ahead of its annual monetary policy, the Reserve Bank on Thursday said cutting policy rate to promote investment depends upon moderation in inflation and fiscal consolidation. "We need to have low inflation, we need to have rising investment ratio, we need to have strong fiscal consolidation and this in turn provides space for monetary policy to actually support investment ..." RBI Deputy Governor Subir Gokarn said..............

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Banks look for more cash reserve ratio cuts

…."A CRR rate cut of at least 50 bps in the upcoming credit policy review will help kick-start the economy and ensure room for manoeuvre through higher liquidity,"……

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Will RBI cut rates?

…..Tight liquidity conditions have resulted in yields on sovereign paper shooting up. All these conditions don’t seem to suggest RBI is going to cut rates meaningfully anytime soon, even as the markets have been factoring it in for a while. Going by recent developments, strategists believe the central bank will step in and buy government securities tactically to comfort the sentiment when the 10-year gilt goes past 8.5 per cent. The clamour to cut rates has almost reached a fever pitch now, as it’s apparent that RBI’s massive tightening has only hurt growth and failed to tackle “imported inflation”……..

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Madhavpura Bank: Finally facing liquidation

.....Interestingly, now that the case has effectively closed the possibility of KP paying any more instalments to MCCB, the RBI has woken up and reportedly threatened to shut down the Bank. A show-cause notice has been issued to the board asking why its licence should not be cancelled....

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Government's heavy-handed regulation of microfinance will kill it and bring back moneylenders

…..Since 2005-06, financial inclusion has been on RBI's agenda. One element of the strategy is through no-frills accounts, diluted know-your-customer (KYC) norms, banking correspondents (BCs) and use of IT. For example, Puducherry, Himachal Pradesh and Kerala have announced 100% financial inclusion in all districts and pan-India, all villages with population of more than 2,000 will be served through bank branches or BCs. But there are several villages with population less than 2,000 and this kind of financial inclusion for 6,00,000 villages isn't going to happen fast. Indeed, there is a patronising angle to microfinance. We don't talk of microfinance when we approach our banks for financial products. But for that, we need to wait for 2020, or later still……..

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Rural credit story far from satisfactory: Yashwant Sinha

Q: Would it be right to say that the RBI and banks have become urban centric, urban oriented and this job is best left to people like Mahajan, state governments and other NGOs or can the RBI and banks - do they have it in their mind space to get into this at all?

Sinha: It should be a well-planned and determined effort on the part of the RBI, the Indian Banks Association and on the part of the banks to do what is expected from them. For the NGOs, to supplement the work that the banks are doing in the rural areas so that the requirements of the rural people is met.

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Sebi mulls new ethics code for brokers, frequent inspections

.....the Sebi also plans to strengthen the concept of beneficial ownership in KYC process in coordination with other financial regulators like RBI and IRDA. Sebi has simplified and strengthened the KYC process, making it uniform for all intermediaries and has also implemented the concept of single KYC so that the investors need not undergo the same process again and again when they approach other intermediaries......

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