Broad view of small pictures

REGIONAL ECONOMY OF INDIA — Growth and Finance: Edited by Deepak Mohanty

.....The Reserve Bank of India (RBI) may be proud of its achievements in establishing the Department of Statistics and Information Management (DSIM). In a speech delivered at the Annual Statistics Conference at Chandigarh in March this year, Dr. Mohanty explained the role of the DSIM within the RBI and how “The statistician in the Reserve Bank performs a multifarious role.” It encompasses collection, compilation, analysis and dissemination of information relating to monetary, banking, corporate and external sectors. The RBI's web-enabled Database on Indian Economy (DBIE) is a gold mine for researchers both within the country and abroad. While the research undertaken in the departments of the RBI located in Mint Street are well known through publications, Reports, Occasional Papers, etc., not much is known about the work done in the regional branches. This book is an attempt to disseminate research done by some of them......

Read - The Hindu

Firms take business correspondent route to gain banking expertise

......Back in August 2010, RBI had first mooted the idea of allowing corporates to act as BCs in a discussion paper, counting on their ability to employ “larger resources, higher organizational strength and financial backing” as a boost for the bank agent model. Moreover, big companies would be wary of reputational risk and hence efficiently monitor their agents, the regulator had noted. A month later, on 28 September 2010, RBI allowed their entry. Both experts and stakeholders caution that the challenges are substantial..........

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UP directs banks to be alert on fake currency

.....The minister also accepted that cases of fake notes from bank ATMs have also come to the light and added that suggestions have been given to the RBI for not allowing money into ATMs manually and deploy guards there after their character verification..............

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Govt agenda to dictate PSU banks' board meets

Finmin asks nominee directors to highlight key issues of financial inclusion, rationalisation of branches and priority sector lending

Government nominees on the boards of public sector banks, financial institutions and insurance companies might now dominate the agenda at their meets. Concerned that the boards give a slip to the government’s areas of interests, the finance ministry has instructed all its nominees to prepare a list of key issues that should be discussed before moving on to the agenda set by the company.................

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Rising NPAs

This refers to “Rising bank bad loans, slowing credit growth” (Business Line, June 10). Recently, the RBI Deputy Governor, Mr K.C. Chakrabarty, said that the interest rates are “not too high” to affect “corporate” growth. He was more concerned with the rising bank bad debts. Even the new private sector banks had relatively high gross NPAs at 2.18 per cent in March. The SBI and nationalised banks still have higher NPAs as a percentage of gross advances. Good credit appraisal, not lowering policy rates, helps reduce NPAs. There is considerable scope for tightening appraisals and intensifying due diligence. NPAs rise when big loans extended to large industries remain in arrears. There is near unanimity that liquidity in the system is not an operational hitch in “transmission mechanism”. The banking system suffers from its loans to sectors such as aviation and infrastructure, and their return will be a long-term story. With slowing growth, the RBI believes that despite inflationary pressures, there is “room to lower rates” to induce growth, when actually the lending and recovery mechanisms need strengthening.

- K. U. Mada Mumbai

Sail through common exam for public sector banks

.....Banks are one of the biggest recruiting agencies in the country and there is a great response for the managerial jobs for the fact that they are open to candidates from almost all the streams. Instead of attending the tests of all the banks individually earlier, the aspirants now have to take the Common Written Examination conducted by the Institute of Banking Personnel Selection (IBPS) for entry into 19 public sector banks. The next IBPS exam is just a few days away, and will be conducted on June 17.........

Read - The Hindu

Obituary

KOSHY GEORGE (80) Retired Officer RBI, Chennai. Expired on 9-6-2012. Phone: 26472376

Hindu

Bank loans for vocational courses soon

In a landmark of sorts, the Indian Banking Association (IBA) has decided to extend the ambit of its Model Educational Loan Scheme to include vocational education and training. This means that all banks, which are associated with IBA, as well as a other banks that RBI may include, will now also offer education loans for students in the vocational sector..................

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Microsoft helps BoI meet RBI compliance directives

Bangalore, June 11: Bank of India (BoI) has partnered Microsoft to deploy Microsoft Active Directory Rights Management Services (AD RMS). The company in a release said that the project will help it to safeguard corporate digital information and enables safe and secure banking operations. Microsoft AD RMS is currently available for 100 users of BoI and will be extended to about 15,000 users in the next phase of deployment. “By being in-line with the RBI data security guidelines, it ensures safety and security of corporate data,’’ said Mr Sameer Ratolikar, Chief Information Security Officer, Bank of India. 

HBL

Timothy Geithner to visit India later this month for economic talks

 Aiming to further expand the bilateral economic engagement, US Treasury Secretary Timothy Geithner would travel to New Delhi and Mumbai later this month for the third annual meet of the US-India Economic and Financial Partnership. Geithner would be in New Delhi on June 27 and would travel to Mumbai on June 28. In Mumbai, he would meet the Reserve Bank of India (RBI) Governor, Duvvuri Subbarao, and the business leaders from a variety of industries.......................

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No credit for small farmers

The M.V. Nair Committee has defined agriculture too broadly, making it easier for banks to avoid riskier lending to the small and marginal farmers.

Despite having only a 15 per cent share in GDP, agriculture still employs more than 60 per cent of India's rural population. The Centre continuously boasts of doubling credit to this sector and providing interest relief of two per cent for prompt payments, and the like. But a look at the Reserve Bank of India statistics on direct credit for farmers during the past five years reveals that there is a fall in actual money going to farmers..................

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"My View on "RBI's KC Chakrabarty counters Gokarn ...":

The comments of  Mr.Warrier are excellent. Deputy Governors should be clearly told by the Governor that they should express views in public only on matters pertaining to the departments handled by them. This would avoid contrary views being expressed by the Bank through their Deputy Governors. Government officials like Economic Affairs Secretary and Economic Adviser to the Finance Minister have also been expressing views on interest rates which is the domain of the RBI. Finance Minister should advise them to stop expressing their views on matters which should come from the Governor. It is no use in Government saying that RBI is an autonomous institution and then allowing its officials to cause embarrassment to the Governor. Of course, Governor has been pursuing policy as he considers best and has least been affected by the views of the Government officials.
Kudos to the Governor.

A. Chandramouliswaran, Former Executive Director

Financial inclusion net to cover more people to curb leakages, generate savings

....The Reserve Bank of India advised all banks to set up low-cost outlets or ultra small branches to act as a bridge between bank branches and business correspondents. These low-cost branches will provide support to 8-10 BC units and have minimum infrastructure like pass book printer, cash retention facility and terminals equipped with modern banking technology. .....

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12 lakh accounts opened under MP Financial Inclusion scheme

Govt keen to revive co-op banks whose licenses RBI has cancelled: Shivpal

Cooperative Minister Shivpal Singh Yadav told the Assembly today that the government was in touch with the Reserve Bank of India and NABARD to ensure the functioning of 25 cooperative banks whose banking licenses had been cancelled by the RBI......................

Read - Indian Express

Bank fraud: Notice issued to close accounts

A day after Noida police busted a gang that cheated several banks of crores by obtaining loans through fake documents, notices have been served on banks to close the 130 accounts that were opened by the gang over a period of time. The police also have asked RBI to issue an advisory. The police said soon bank officials responsible for issuing loans and verification will be investigated....................

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RBI may have to sacrifice growth to tame inflation: KC Chakrabarty

Between growth and inflation, which one do you think deserves priority right now currently?

For the monetary authority, the central bank, inflation will always remain the most important factor. But that does not mean we cannot grow, we can. The Reserve Bank follows a system, which you called a multiple indicator, so you look into various indicators that combine the monetary policy together. But then inflation and implying stability will continue be the most important factors. We are saying one thing from a long time that we cannot have high growth with high inflation. If we want high growth, there is a need to bring the inflation down and temporarily, we have to sacrifice the growth to bring down the inflation. But we should not hesitate, ultimately growth will pick up and we will be not able to have high growth without a moderate or low inflation.............

 

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India a victim of loss of confidence and not opportunities: Rajkumar Dhoot

....“Therefore in such testing times responsibility of the apex bank RBI becomes all the more important to address growing concerns on the falling investment and liquidity faced by the system as the government borrowings shoot up,” .........

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Financial sector regulators to take stock of economy

......The meeting, which will be held in Hyderabad, is also expected to analyse the reasons behind the depreciating Indian currency. The FSDC sub-committee is scheduled to meet just ahead of the Reserve Bank of India’s mid-quarterly monetary policy review on June 18. The RBI is widely expected to cut key rates by at least 0.25 per cent to ease liquidity and stimulate lending..........

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RBI may stand pat now, cut 50 bps in July

The Reserve Bank of India (RBI) is unlikely to cut policy rates this month. Chances are, it could slash 50 basis points (bps) in July than by a smaller measure in June because by then, it will have more certainty on data – be it on growth, inflation, monsoon or the global economy.......................

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RBI rate cut alone seen unlikely to spur cheaper loans

A rate cut by the Indian central bank next week will not be enough to spur banks to lower lending rates immediately, bankers said on Monday. Instead, Indian banks, saddled with high-cost, long-term deposits and narrowing profit margins, are hoping for a cut in the cash reserve ratio, which would boost liquidity and in turn lower the cost of funds, and would allow them to ease deposit and lending rates...............

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Macro-economic situation calls for a pro-growth monetary policy

.....Given this situation, one can expect a 25 basis point cut in policy rates (repo and reverse repo) and a 50 basis point cut in the Cash Reserve Ratio (CRR) in the RBI's Mid-Quarter Review. The reduction of policy rates, however, is only one part of the story. For growth to pick up, it has to be urgently accompanied by strong policy actions by the Government, including movement in the second generation reform process.......................

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Don't blame RBI for poor GDP, govt action vital: Munjal

Q: Does industry feel that the Reserve Bank of India has crimped growth?

A: Actually, it's not the Reserve Bank alone. The economy is in the present situation partially because of extreme monetary tightening and partially because the government is unable to take fiscal initiative. In the current situation, oil prices have softened over time and inflation has not gone up. So there is headroom, according to a Reserve Bank deputy governor, to improve liquidity in the banking system and to lower interest rates at the same time. But it has been suggested that government also take fiscal decisions.............

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RBI: Hard choices, easy options

.........The situation facing the Reserve Bank of India (RBI) as it formulates its mid-quarter review of monetary policy is depressing. The growth rate for the last quarter of 2011-12 was 5.3 per cent, the lowest in many years. What is disheartening is that it continued a trend that started in ...............

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RBI to meet export bodies on June 21

The Reserve Bank of India will meet representatives of export associations, industry bodies and banks on June 21 to discuss issues such as exchange rate volatility, export credit and also procedural issues affecting India's exports. This meeting will come close on the heels of the announcement of the annual supplement to the Foreign Trade Policy. India's merchandise exports grew 20 per cent in dollar terms during 2011-12 to $302 billion...........

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Banks to take call on fixed deposit rates after policy review

Mid-size public sector banks would wait till the mid-term policy review by the Reserve Bank of India before taking a call on reducing interest rates on fixed deposits, top officials said today.....................

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Banks want timeline set for firms to exit debt recast mechanism

......Bankers say the Reserve Bank of India could enhance the provisioning requirement for restructured accounts classified as standard advances to 5 per cent from 2 per cent. The enhanced provisioning requirement, whereby more capital will need to be set aside to cover possible defaults, will ensure that banks show urgency in the restructuring and exit of companies from the CDR process..........

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Realtors rain EMI sweeteners

Home loan customers now have a reason to smile even before the Reserve Bank of India’s much-awaited credit policy review on June 18, where the central bank is widely expected to slash rates. In a bid to increase sales without lowering prices, real estate developers in Mumbai and the National Capital Region (NCR) are offering to pay customers’ EMIs till possession..............

Read - Hindustan Times