RBI advice helped States, not Centre : K Kanagasabapathy

......The Reserve Bank of India has been bringing out a study of State finances ever since 1950-51, a unique contribution from any central bank. The quality of the publication in terms of its analytical contents has been constantly improving. In its latest publication released at the end of March 2012, it has also incorporated a theme chapter on the ‘‘Role of the Reserve Bank in State Finances'', which traces the growing responsibilities that the RBI took upon itself, beyond its mandated roles of serving as a banker and debt manager of the State governments. This thematic chapter is a must-read for anyone focusing on..........

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Now, time for an SLR cut

…………….The reduction in SLR does not affect money supply. Will it not affect banks’ subscription to fresh issues of securities in a year when massive borrowing is planned? The answer is “no”. We have seen excess SLR investments in the past even when growth of non-food credit was good. It was because, both for maintaining prudential ratios and for avoiding the rising trend in non-performing assets, banks prefer investment in gilt-edged securities. A deputy governor of RBI once characterised this tendency as “lazy banking”. Second, with the massive limit of Ways and Means Advances from RBI to the government at Rs 50,000 crore and the possibility of conducting buybacks, the central bank can always ensure that the government’s needs are met. Since there is no release of impounded funds, there is no relaxation of the central bank’s basic stance of tightness. At the same time, from the point of view of public relations, reducing the SLR by two percentage points will give the impression of improving liquidity. It will be a win-win situation for RBI.

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- A Seshan, Economic consultant and a former officer-in-charge in the Department of Economic Analysis and Policy at the Reserve Bank of India

Govt appoints U S Paliwal as RBI nominee director on Corporation Bank's board

New Delhi: The Government of India has appointed U S Paliwal as the Reserve Bank of India nominee director on the board of state-run lender Corporation Bank with effect from April 25, 2012, the bank said.
The new director will hold office until further orders, Corporation Bank said in a filing to the stock exchanges Wednesday.

http://in.finance.yahoo.com/news/govt-appoints-u-paliwal-rbi-110603647.html

Soiled note business thrives in Ranchi

RANCHI: Have you ever thought that the currency notes which get mutilated can become somebody's bread and butter? Yes, the business of exchanging good currency notes by returning the soiled ones is thriving lucratively but illegally in the city beside the Reserve Bank of India's (RBI) office..................

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Shortage of coins in city, Madan seeks RBI help

KOLKATA: State transport minister Madan Mitra said on Thursday that the state government was making a daily loss to the tune of Rs 25 lakh due to shortage of coins. Mitra said he was going to discuss the issue with the Reserve Bank of India (RBI)…………………

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RBI to issue Rs. 20 and Rs. 50 notes

The Reserve Bank of India will shortly issue Rs. 20 and Rs. 50 denomination banknotes without inset letter and with the rupee symbol in the Mahatma Gandhi 2005 series, bearing the signature of D. Subbarao, Governor of RBI, and the year of printing on the reverse of the banknote, a release said. All banknotes in the denomination Rs. 20 and Rs 50 issued by the bank in the past will continue to be legal tender.

HBL

S&P, Moody's are like docs with two views: KC Chakrabarty

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Deregulation works

It is interesting to see the way in which banks are reacting to the Reserve Bank of India’s credit policy announcement. Some banks have cut the lending and deposit rates for select maturities. Others have preferred to cut the lending rates by specified percentage points, keeping the deposit rates unchanged. This is an era of deregulation — which helps banks make their own assessment of market needs, keeping in mind the resources available to them. For sure, deregulation is achieving the intended purpose.

- Srinivasan Umashankar Nagpur (BS)

Focus on transactions in no frills accounts: RBI

Banks need to focus on transactions in accounts opened under financial inclusion, according to Dr K.C. Chakrabarty, Deputy Governor of RBI......

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‘Financial system is strong'

.....In the light of credit rating agency S&P cutting India's outlook to “negative”, Reserve Bank of India Deputy Governor K. C. Chakrabarty said the RBI would intervene in the forex market only when there was high volatility in the currency market and not just because of the ratings. “India's financial system is strong and that is what is our internal assessment. The RBI will intervene if there is volatility because of the rating and if there is need to intervene,” Mr. Chakrabarty said.................

Read - The Hindu

Banks have to play the ‘central role' in financial inclusion

Hyderabad, April 26: Appropriate delivery models are vital for achieving financial inclusion, according to Dr K. C. Chakrabarty, Deputy Governor, Reserve Bank of India. Speaking on developing a framework for financial inclusion at a national seminar here on Thursday, he said financial inclusion had become fashionable of late. “But this fashion has to become a passion,” he added. The seminar was organised by Crux Management Services in association with State Bank of India's Institute of Rural Development and Nabard. Stating that banks had “great reluctance” to open brick and mortar branches in un-banked area, he said a combination of traditional branch model and business correspondent model should be adopted. Banks should open intermediary structures between base branch and customer locations..........

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Access to banking is a right, says RBI

.........“Banking services should now be made a fundamental right, with financial inclusion drive turning from fashion to a passion for the country. But, just opening a bank account is not enough. There have to be transactions in it. Our approach now is with a minimum bouquet of products and services which include a pure savings facility with recurring deposit and a facility of entrepreneurial credit too,” said K C Chakrabarty, Deputy Governor, Reserve Bank of India....................

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RBI not to interfere in bank service charges

HYDERABAD: The Reserve Bank of India (RBI) will not stop banks from collecting charges for various services or insist on a minimum balance, as it is the choice of the customer where to open account, Deputy Governor K.C. Chakrabarty said here Thursday.  "This is business. We can't interfere. We are not here to control business. We can only bring more competition," Chakrabarty told reporters on the sidelines of a national seminar on financial inclusion...............

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When a quiet change in RBI Act led to a giant scam

...... “Never in the history of India had these kinds of derivatives sold by banks,” he added. “The insertion of a new clause in the RBI master circular was the real devil, and we have internal notes of the central bank,” .................

Story

Govt Clears Banking Bill, Retains 10% Voting Right

.....The proposed amendments as regards the RBI's role would enhance the regulatory powers of the apex bank and increase the access of the nationalised banks to the capital market for expansion of the banking business, the draft had said............

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Give home loan up to Rs 25 lakh in priority sector: RBI to UCBs

Mumbai: In order to facilitate enhanced lending, Reserve Bank on Thursday allowed Urban Co-operative Banks (UCBs) to provide housing loans up to Rs 25 lakh under the priority sector lending schemes. "UCBs would, henceforth, be permitted to utilise the additional limit of 5 per cent of total assets for grant of housing loans to individuals upto Rs 25 lakh, which is covered under the priority sector," RBI said in a notification. At present, it said, UCBs are permitted to assume aggregate exposure on real estate, commercial real estate and housing loans up to a maximum of 10 per cent of their total assets with an additional limit of 5 per cent of their total assets for housing loans up to Rs 15 lakh. On its second quarter monetary policy review in November 2010, the RBI permitted all UCBs to lend up to 10 per cent of their total assets to housing, real estate and commercial real estate and an additional 5 per cent for purchase and construction of dwelling units, costing up to Rs 10 lakh. "Due to the high cost of dwelling units, UCBs found it difficult to use the additional limit of 5 per cent of total assets," the central bank said. In May 2011, the RBI hence allowed UCBs to utilise the additional 5 per cent of their total assets permitted earlier, for housing loans up to Rs 15 lakh.

Zee News

Look before you leak data online

…………..“The Indian Banks Association is planning to put this point across before the Reserve Bank of India that banks should not be liable for paying compensations to customers. That’s because if we compensate for a few genuine cases, then others may also claim tomorrow something on these lines and start asking the bank for compensation,” said a senior official at the IBA……………

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Indian market for banking technology set to grow: Frost & Sullivan

……"IT investments in the sector will be driven by multiple forces. These include, the need to comply with RBI norms, support changing business models and leverage cloud computing and mobility solutions, which will result in comprehensive transformation in the IT landscape of large, cooperative and rural banks".

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SBH designs recurring-term deposit scheme

In what it claims to be a first-of-its-kind from the Indian banking industry, the State Bank of Hyderabad (SBH) is thinking about launching a new product, which will combine the features of recurring deposit (RD) and term deposit schemes.................

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Earn less, pay more

After months of expectations that a rate cut was on the anvil, the Reserve Bank of India (RBI) finally took the plunge last week by cutting the repo rate by 50 basis points — quite a pleasant surprise for the market. However, the rate cuts that followed have not been too convincing. Some banks have cut deposit rates across tenures, while certain others have chosen to cut the base rate — implying there will be some relief on the lending front as well................

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YES Bank reduces ATM target; to focus on core retail space

With the RBI permitting white label ATMs, that is, those that are owned and operated by non-bank entities, our job becomes easier,....................

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