Dr.K.C.Chakraborty reappointed

In exercise of the powers conferred by clause (a) of sub-sectin (10 read with sub-section (4) of section 8 of the Reserve Bank of India Act, 1934, the Central Government hereby re-appoints Dr.K.C.Chakraborty (DoB: 27.06.1952), as Deputy Governor, Reserve Bank of India for a further period of three months beyond 14^th June 2012 or until further orders, whichever is earlier.

KCC in media.........

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चिट्ठियों से ऑनलाइन फ्रॉड रोकेगी RBI

.........आरबीआई के क्षेत्रीय निदेशक के आर दास ने बताया कि बैंक ने यूपी-उत्तराखंड के 2600 डाकघरों से करार किया है। इन डाकघरों को लॉटरी स्कैम से बचाने संबंधी संदेश लिखी मुहरें दी जाएंगी। इन्हें वे प्रत्येक चिट्ठी पर लगाएंगे। जिससे घर-घर में जागरूकता फैलेगी। इसी प्रकार रेलवे स्टेशन के डिस्प्ले बोर्ड के जरिए भी संदेश का प्रचार-प्रसार किया जाएगा। वहीं रेडियो पर भी लॉटरी स्कैम से बचने और फौरन किन विभागों को सूचित किया जाए, इसके बारे में बताया जाएगा। 

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Counterfeit currency: Threat to internal security

The World is observing ‘Anti-Counterfeiting Day’ on 13th June 2012; however India is still struggling to come out of the clutches of fake currency issue. The latest report by Home Affairs Ministry notifies that large quantities of ‘Fake Indian Currency Note’ (FICN) are pumped into India from countries like Pakistan, Nepal, Bangladesh, Sri Lanka, Malaysia, Thailand, and the UAE. Shocking but true, reports by the Reserve Bank of India (RBI) reveal that the practice of counterfeit currency is almost as old as the printing of currency. At some period in history, it was considered treasonous enough to warrant punishment by death. It was in 1650 AD that paper money was developed and counterfeiting flourished, especially within America where counterfeit money was more common than genuine money.............

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MFI sector upbeat as banks open fists, Bill

........Separately, the MFIN is also in dialogue with the Reserve Bank of India to extend the deadline for meeting the new provisioning and capital adequacy norms beyond April 2013. If the central government also obliges with the new MFI Act, hopefully a new chapter could be opened in the microfinance sector.

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Financial services regulation: Is there a future for NBFCs?

....... Usha Thorat committee’s recommendations and PSL (Priority Sector Lending) guidelines are still to come and are likely to reduce leverage and ROEs for NBFCs, given that capital requirements are expected to increase with Tier- 1 increasing from 10% to 12%. ....................

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RBI asks banks to improve IT governance

......"It is expected that all banks adopt appropriate frameworks for both IT and IS governance and put in place the proper structure and systems," RBI said in a notification. The RBI has also requested banks to take suitable steps in this regard and ensure that the issues relating to governance, information security and business continuity get adequate attention at the Board level.........

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Coordination or control?

The edit “Competing exemptions” (June 12) rightly questions the need for bringing telecommunications and banking within the ambit of the Competition Commission of India (CII). The need for coordination between organisations arises from the degree of interdependence of their functions. Such a situation does not seem to exist here. If one of the regulators falters in its responsibility, the remedy is to improve its working rather than a check by another entity. Moreover, regulators in these two sectors – the Telecom Regulatory Authority of India and the Reserve bank of India (RBI) – have very able people running them. So, the idea of putting these sectors under CCI seems to be a camouflage to monitor and control them rather than coordinate their activities. Moreover, the assignment of resolving conflicts between sector regulators and CCI to a Cabinet committee would add layers to the decision-making process that is already fraught with delays.

Y G Chouksey Pune (BS)

RBI directive on erosion of loan collaterals to hit companies

.......A Reserve Bank directive that seeks to protect banks from erosion of loan collaterals is threatening to worsen credit flow to slowdown-hit companies that are lagging in payment of salaries and statutory dues. The RBI has recently instructed banks to ensure that borrowers have no outstanding statutory dues, such as Employees' Provident Fund (EPF) contributions, by seeking an auditor's certificate for such compliance in their credit appraisal process............

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RBI asks RRBs, cooperative banks to frame policy on unclaimed accounts

.........On a review, with a view to further strengthen the regulatory framework for inoperative accounts and unclaimed deposits, state and central cooperative banks or regional rural banks are advised 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," RBI said in a circular..................

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My View on "Finance ministry preparing new policy road map for banking sector "

This is the right approach. We must use the existing banking infrastructure simultaneously with creating new ones. The human resources and physical infrastructure in cooperatives and RRBs and to some extent in rural branches of commercial banks were ignored while promoting sophisticated borrowed ideas like SHGs and Banking Correspondents. Cooperatives and RRBs were trained to cater to the rural areas and handle small accounts. When technology invaded from above, they were left in the lurch. The present approach of Centre will give RBI an opportunity to revive a neglected sector.

M G Warrier

Will one more regulator help matters?

With the Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Agency (IRDA), Pension Fund Regulatory & Development Authority (PFRDA), Telecom Regulatory Authority of India (TRAI) and Forward Markets Commission (FMC), India already has a plethora of regulators trying to set things right in the economic flux. It seems there is one more on its way...........

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RBI to issue Rs 20 denomination notes with rupee symbol

Reserve Bank Wednesday said it will soon issue banknotes of Rs 20 denomination with the rupee symbol and inset letter R in the Mahatma Gandhi Series-2005 notes........

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Corporate india vs Government: Full circle

.......The group flaunts an endless supply of cash while wrapping its lack of financial transparency into a strange corporate philosophy called ‘corporate materialism’ which proclaims that “in the last 33 years not even a single rupee of dividend has been declared by the group and not even a single rupee has been shared from the profit by anybody.” Will anyone explain how the RBI or the ministry of corporate affairs have allowed a group with this weird financial claim to collect over Rs70,000 crore of public money (according to its own newspaper advertisements)? Or how the group has the funds to sponsor the Indian cricket team for so many years? Sahara claims to have spent an astounding Rs1,085 crore on sports and social activities until the end of June 2010..................

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Reading RBI’s tea leaves

.....One way of reading the tea leaves is to look at what RBI has done in the past when growth slowed down dramatically. You don’t have to go too far back—in the third quarter of FY09, at the time of the Lehman crisis, GDP growth fell to 5.8%, better than the Jan-March 2012 GDP growth rate of 5.3%. What did RBI do at the time? .......

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Corporation Bank expects 1% cut in CRR

 Mangalore-headquartered Corporation Bank expects Reserve Bank to cut CRR (cash reserve ratio) by 100 basis points in its next week's mid-quarter policy review to facilitate liquidity flow into the system. "We would welcome the rate (CRR) cut at least by 100 basis points. That would send a right message also. We feel the worst (on financial front) is over. If they cut the CRR by one per cent, the system will get Rs 65,000 crore," said Ajai Kumar, Chairman and Managing Director, Corporation Bank. ...........

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Revive Growth with Focus

......In tandem, the RBI would do well to ease liquidity, so as to incentivise heightened economic activity. It needs to mandate a lower cash reserve ratio for commercial banks, given the easier trend in crude prices and the reduction in the core inflation rate. Additionally , the monetary authority needs to indicate lower cost of funds by further reducing its repo rate..............

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Dear money policy compromises growth

.....The RBI's approach from mid-2010 to keep interest rates high in order to control inflation only set growth expectations back and de-energised the economy. It rested on a simplistic assumption that money supply is all that mattered. By raising interest rates, the liquidity in the system would dry up as borrowers opted out of fund-raising to complete projects. This would also reduce overall demand in the economy, as households would save, attracted by higher interest rates, and reduce consumption expenditures.........

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Why we need a large CRR slash, not a rate cut

.....A rate cut without comfortable liquidity conditions is unlikely to lead to significant reduction in lending rates. Therefore, even if the RBI chooses to cut the repo rate on June 18, it may not be very effective without easier liquidity conditions than what exist now. A lower CRR will also increase RBI’s ability to intervene in the forex market without putting too much strain on inter-bank liquidity. A large CRR cut would allow banks to cut their lending rates immediately, while only a 25 bps cut may only have a salutary impact on lending rates.......

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Why a rate cut on 18 June will aggravate India’s problems

Even though Dalal Street is eagerly awaiting an interest rate cut after the weak April industry output, Chetan Ahya, Managing Director, Morgan Stanley has warned that premature easing by RBI may aggravate the economy’s current problems...............

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ATM companies top small banks in valuation

............ What has set the market on fire is RBI's two-year-old decision to allow accountholders free access to any ATM across the country. Although access is free for customers, banks pay each other a transaction fee every time their depositors access ATMs of other banks. This has turned ATMs into profit centres for banks and the number of machines has grown from 60,000 in March 2010 to 75,000 last year and is now a few hundred short of the one-lakh milestone.......................

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India ranks 23rd in financial literacy among 28 countries says Visa

....India is the third-largest growing economy of the world apart from being one of the highly preferred investment destinations. However, when it comes to financial literacy among Indians, results are quite dismal. A survey revealed that more than 70% of Indian respondents cannot manage their personal economic emergence for more than three months. Of course, poor financial planning is the key reason.......

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Could This Be India's Golden Moment?

The first quarter of this year saw India’s economy grow a mere 5.3 percent, the slowest rate in nine years. The single biggest factor has been the hefty increase in benchmark interest rates by the Reserve Bank of India over the past two years—from 4.25 percent in January 2010 to 8.5 percent in January 2012. While the central bank’s motivation has been to keep inflation in check, a direct side effect of the interest rate hikes has been a rapid cool-down of the pace of investments in infrastructure and the manufacturing sector................

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