The Reserve Bank Wednesday said all rural branches of banks will have to impart financial literacy. This move comes after the central bank found Financial Literacy and Credit Counselling Centres (FLCC) were located in the urban and semi-urban areas. "Banks may consider setting up need based FLCs in other locations as well. Financial literacy activities will also be undertaken by all the rural branches of Scheduled Commercial Banks including RRBs," the RBI said in its guidelines on Financial Literacy Centres (FLCs)...........
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Thursday, June 7, 2012
Aviation ministry seeks ATMs, forex counters for transit passengers in international airports
NEW DELHI: To make life easier for transit travellers and those who apply for visa on arrival, the aviation ministry has requested the Reserve Bank of India to allow ATMs and currency exchange counters before immigration areas in international airports. "Transferring passengers (who spend anywhere between two hours and 24 hours at airport) are required to spend substantially on food and beverages and use other facilities in the transfer area, and spending in foreign currency is not feasible," the ministry has said in a consultation paper on developing India as an aviation hub. Existing Reserve Bank of India guidelines does not allow foreign exchange counters before the immigration in airports' arrival terminals..............
Union Bank ATM for differently-abled
.....An ATM for the differently abled had been specified in the Reserve Bank of India circulars in 2008 and 2009. The central bank had stated that all banking services including ATM cards need to be offered to all customers without any discrimination........
Staff costs higher at public sector banks
....In a speech delivered recently at a conference of public sector HR managers, the RBI Deputy Governor, Dr K. C. Chakraborty, said, “One thing is, thus, loud and clear — the competitive advantage in terms of staff costs that we always thought the public sector banks had is no longer there. ......
Will we get another rate cut from RBI on 18 June?
The Reserve Bank of India will review its monetary policy on 18 June. Will it announce another interest rate cut? The chances seem brighter after central bank Deputy Governor Subir Gokarn said on Monday there is scope to cut interest rates to boost the country’s flagging growth. Gokarn said that the slowdown in growth and a fall in oil prices provided room for a possible interest rate cut.............
RBI Jaipur Receives Fake Notes from Udaipur, case registered
Twenty Three notes in denominations of Rs. 500 and Rs. 1000 were branded as fake by a Manager at Reserve Bank of India, Jaipur while he was in the process of receiving cash from the ‘Chest’ Branches of Udaipur. The Manager has registered a written complaint with the Superintendent of Police, Udaipur against an unidentified person..................
Real import of rupee fall
...........The Government is clearly unwilling to do much about the rapid decline in the value of the rupee. Despite the rupee losing around a quarter of its value against the dollar over the last year, the RBI has not been pushed into making any dramatic interventions in the realm of exchange rates. Instead, the Government has focused on coming to terms with a devalued rupee, even accepting the political dynamite of a sharp increase in petrol prices. The official thinking is clearly on the side of devaluation as an essential step in macroeconomic correction...........
Freedom from prepayment fee
Taking an aggressive stance, the Reserve Bank of India (RBI) has decided that banks cannot levy foreclosure charges or prepayment penalty on home loans on floating rate. The order is to be implemented with immediate effect. In a circular issued on 5 June, RBI warned banks to strictly follow the instructions brought out in its monetary policy statement for 2012-13. The apex bank thinks that removal of foreclosure charges and prepayment penalty on home loans would reduce rate discrimination between existing and new borrowers and competition among banks and hence result in finer pricing of floating rate home loans...........
No penalty on home loan prepayments; but why this half-hearted measure?
RBI says the waiver of pre-payment penalty is applicable only for home loans carrying floating rate of interest. Why are borrowers who had obtained home loans on fixed interest basis being left out?..........
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RBI told banks to be serious while dealing with unclaimed deposits
Reserve Bank of India told banks to spruce up their act in dealing with unclaimed deposits. It has advised to them to put in place a board approved policy on classification of unclaimed deposits, grievance redressal mechanism for quick resolution of complaints, record keeping and periodic review of such accounts. It has also directed banks to conduct the first periodic review of unclaimed deposits by September 30, 2012................
Exploring the challenge of financial education across emerging economies : K C Chakrabarty
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Economic Harakiri
........... If we are to believe the Reserve Bank of India it is the global recession, the financial turmoil in Europe, the stubborn high inflation and the swollen fiscal deficit, everything in short, except its own monetary policies. It has taken the collapse of industrial growth, a panic withdrawal of money from India by foreign institutional investors and a collapse of the rupee to force Pranab Mukherjee to break the code of Omerta and put the blame squarely on the Reserve Bank’s ‘tight monetary policies.’ But when it came to the steps Mukherjee was as much at sea as RBI governor D Subbarao and his advisers. His panacea is to ‘address the imbalance on the fiscal front’, i.e. cut the budget deficit by spending less. The prime minister is obviously of the same opinion...............
India’s economic policy set to undermine RBI’s ‘good’ work
The Reserve Bank of India (RBI) is in danger of losing its vaunted reputation as one of India most trusted institutions as it attempts to maintain its role in promoting price and financial stability against a backdrop of government policies that do not necessarily enhance the RBI's medium-term goals, according to an article published in the latest edition of the Central Banking Journal. The article says the RBI has gained a strong reputation for its commitment to support growth as well as maintaining price stability. Moreover, its detailed intervention in the regulation of banks, financial products and capital flows has also drawn extensive praise during the past five years. The RBI has shown what report author Hugh Sandeman, a financial advisor and journalist, refers to as a "lack of intellectual inhibition in the exercise of old-fashioned common sense"...............
India’s economic growth closely tied to global risk appetite
.....The hopes that the Reserve Bank of India would quickly reduce interest rates, thereby imparting a much-needed boost to investment, have been dashed. Growth has fallen much more than expected, while mastering inflation is proving to be more difficult than envisaged. Add erratic government policies, a large current account deficit, a drying up of capital inflows, a political logjam and a world economy in imminent danger of slipping into a double dip, and you start to wonder how things could possibly get worse. Oh wait, that list seems to have left out El Nino.........
PSU banks dial IT helpline
After a successful stint with IT in financial inclusion, the RBI is now pushing for better reforms in the IT infrastructure of banks, with a special emphasis on PSU banks.
......According to the RBI, one of the objectives of IT initiatives is to lower operating costs, whereby it turns financial inclusion into a profitable business. This, in turn, will help create a huge upside for banks in the form of stable deposits. Also, given how important mobile phones have become as a means for communication, using this technology for funds transfer as well as retail payments holds huge potential. As such, mobile banking is the most happening area of development in the banking sector and is expected to complement, and to an extent replace, the credit/debit card system in the future. “While it has the potential to overcome issues relating to cost, infrastructure and resources; it does pose some new issues of its own,” said Sinha of RBI. RBI has established the National Payment Corporation of India for focused attention on the development and implementation of requisite technologies for enabling new modes of delivery....................
How to attract non-banks to financial services
..... India’s formal financial services sector is yet to meet the growing needs of a large part of the population. When it comes to domestic remittances, 57% of migrant workers in India use hawala couriers and other informal channels to remit money, according to a recent study. Another perspective is India’s informal lending economy. Analysts estimate that almost 40% of the participants in India’s informal economy resort to chit funds, barter and moneylenders for financing.It’s logical that an informal sector thrives in the absence of convenient, reliable, speedy and regulated financial services..........
Growth, India's highest priority
.....Mismatches between growing demand and constrained supply, leading to persistent inflation. The Reserve Bank of India’s (RBI’s) raising interest rates to tackle this has only compounded the problem of reduced profits and investments, made worse by central and state government failures to augment supply...........
Akhilesh asks Nabard to allocate Rs 2,250 cr for Uttar Pradesh
..Referring to RBI ban on 25 non-licenced district cooperative banks, Akhilesh requested Nabard to lift the ban immediately and allow the bank to do banking business......................
Prashant Bhushan intervenes in Sahara-Sebi case, files petition in SC
.....Further, the companies do not follow prudential norms laid down by the Reserve Bank of India (RBI) for banks and non-banking finance companies handling similar or even lesser amounts of public money, the petition alleged. These norms include cash reserve ratio (4.75 per cent), statutory liquidity ratio (25 per cent) and capital adequacy ratio (10 per cent). “The omissions on account of investor protection stipulated in the Sebi Act on the issue of debentures have been detailed in the Sebi order,” the petition said. It also argued the manner in which these unsecured funds have been invested also make them extremely risky.....................
MMCB has Rs320 crore cash & Rs1,625 crore in liabilities
After virtually freeing Ketan Parekh from the obligation of paying all of the Rs1,100 crore he owes to Madhavpura Mercantile Co-operative Bank (MMCB), the Reserve Bank of India (RBI) has left MMCB with a liability of Rs1,625 crore. This is against just Rs320 crore cash that the cooperative bank has in hand.......................
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Justice not in sight for MMCB depositors trial yet to begin
.......Now, with RBI cancelling the banking licence of MMCB, the fate of over 10,000 depositors, remain uncertain, while the key conspirators have managed to get relief from the courts. "The trial had been delayed following various kinds of applications by the accused. It was only after the Gujarat High Court directions on our petition to expedite criminal proceeding against the scam accused in 2011 that the things have now got moving,"..............
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