RBI awarded for its precautionary approach to the regulation of derivatives market

Shri G Padmanabhan, Executive Director and Smt. Shyamala Gopinath, Former Deputy Governor, Reserve Bank of India receiving the Dufrenoy Award for Responsible Innovation 2012. The award was conferred on the Reserve Bank of India for Responsible Financial Innovation on June 18, 2012 in Paris

.....The conference was attended by professionals from financial services industry, regulatory bodies, policy institutions and media. Smt. Shyamala Gopinath, former Deputy Governor, Reserve Bank of India was invited to speak at this conference. She spoke on the RBI’s approach to innovation, specifically to regulating OTC derivatives. The Reserve Bank was nominated by the Observatory on the basis of the speech delivered by Smt. Gopinath.........

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....The award has been given for RBI's precautionary approach to the regulation of derivatives market, the central bank said in a statement. RBI has been recognised and appreciated "for the very reason it was criticised not so long ago," RBI executive director G Padmanabhan said in his acceptance speech.....

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Subbarao for FM?

At the Annual General Meeting of Indian Merchants Chamber (IMC), the new president of the association, Niranjan Hiranandani, said a post was going to fall vacant in the finance ministry and it could well be filled by the current Reserve Bank of India Governor D Subbarao. He said people at IMC would be pleased to see a knowledgeable person like him in North Block. The governor had just made an elaborate presentation in defence of the central bank's decision to not to succumb to industry's demand for rate cuts in the mid-quarter policy. Although he took all policy-related questions head on, he chose not to comment on this one and managed to keep smiling as he listened.

BS

‘Tough surroundings made me learn survival tactics’

Although Narendra Jadhav failed only once in his life, that too in a unit test in standard VII, he faced some tough time during his school days. In his life story narrated to Arun Shevate, which has been documented in Napas Mulanchi Gosht, a book which tells inspiring stories,.................

 

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Government knows better banking than RBI

.....Both RBI and NABARD would need to spend more sleepless nights to make the bankers and the SHGs to sleep well when they implement the CC limit facility to SHGs. Otherwise, the CC limit facility will turn out to be a Cash and Carry facility with more NPAs at bank level and more suicides at SHG level. Earlier, the regulators step in better for the banks and the SHGs...........

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Mid-quarter reviews of RBI to stay

The Reserve Bank of India (RBI) will continue with its mid-quarter review of the annual monetary policy for at least a year, it was decided after reviewing the performance of the review. The reviews were introduced by RBI Governor D Subbarao in September 2010, to take the surprise element out of the off-cycle actions. The effectiveness of this exercise was to be reviewed after two years. “Mid-quarter reviews are intended to communicate our assessment of economic conditions more frequently,” Subbarao had said in July 2010. Mid quarter reviews had attracted criticism from central bank watchers on the ground that it creates more pressure on the central bank for meeting expectations.

BS

Finalise roadmap for services to villages by Aug, RBI to banks

......."The finalised roadmap with details of allocated villages to various banks should be submitted to the respective Regional Office of Reserve Bank of India as per format given latest by August 31, 2012," the RBI said in a notification to banks.............

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FinMin appoints 7 new executive directors for PSU banks

The long wait came to an end for the short-staffed public sector banks. The ministry of finance, department of financial services, on Monday appointed seven general managers (GMs) in one-go for the post of executive directors (EDs) to fill up the vacancies across banks. There are total 17 such posts lying vacant with the banks.........

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Committee calls for providing connectivity to Indian airports

.....In a report released this week, the committee headed by former Reserve Bank of India deputy governor Rakesh Mohan said that road development agencies of the Centre and states as well as the railways should work together to provide connectivity to airports.......

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Giving the Mahatma company

........ RTI activist Manoranjan Roy tried to find out how and when the Mahatma became the mainstay of our currency but the RBI said that there was no document recording the change. The question to be asked is: Do we really need a face on our currency? So far, all the coins have the emblem of the Ashoka Pillar, which stands for peace and non-violence. This is featured in currency notes as well. Currently, the only personality gracing our currency notes is Mahatma Gandhi. These are the symbols that an average Indian is able to identify with. The very idea of having a new face on our currency throws it open to misuse by the ruling party to glorify their leader(s) according to political requirements...........

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'Deciding on inflation vs growth RBI's prerogative'

Amid the Reserve Bank of India (RBI) maintaining status quo on policy rates and the cash reserve ratio, Economic Affairs Secretary R Gopalan has said it is for RBI to decide between inflation and growth.
“It is a question of making a fine judgement, and RBI is the authority to make that judgement. It has taken a call,” Gopalan said at a press conference..............

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Basu hears the tiger roar in 7 Race Course Road

.......Though Basu termed the Reserve Bank's decision to keep interest rates unchanged as 'maturity' despite the Finance Minister's hint to focus on growth, he seemed disappointed. A rate cut would have been a signal, he said, that India preferred growth and could live with inflation.......

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Hopelessly hopeful

......What were the arguments cited in favour of an interest rate? It had been contended that high interest rates had not been able to control inflationary expectations. Instead, it was argued, the high rates had effectively throttled investments. But RBI governor D. Subbarao countered this perception. “Our assessment of the current growth-inflation dynamic is that there are several factors responsible for the slowdown in activity, particularly in investment, with the role of interest rates being relatively small. Consequently, further reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressures,” the RBI stated, adding, “Notwithstanding the moderation in core inflation, the persistence of overall inflation both at the wholesale and retail levels, in the face of significant growth slowdown, points to serious supply bottlenecks and sticky inflation expectations… It is relevant to assess as to what extent high interest rates are affecting economic growth. Estimates suggest that real effective bank lending interest rates, though positive, remain comparatively lower than the levels seen during the high growth phase of 2003-08. This suggests that factors other than interest rates are contributing more significantly to the growth slowdown.” To many, the RBI cocked a snook at the finance minister........

Read - The Asian Age

RBI has shocked itself: Surjit Bhalla

Expert Surjit Bhalla says the RBI has shocked itself by not changing policy rate in its recent policy review, saying that it becomes difficult to analyze the central bank if it keeps shifting the goal post. Madan Sabnavis, chief economist, CARE Ratings, says the scenario has been changing rapidly and the RBI has only been following the trend

Replace CAMELS with RBS for risk assessment: Chakrabarty panel

......While the present risk evaluation of commercial banks through the 'CAMELS' system is a point in time assessment, the proposed risk-based supervision system (RBS), if implemented, will take into account both present and future risks, the Committee headed by RBI Deputy Governor KC Chakrabarty said...................

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RBI: over to you, Delhi… seriously

Fiddle away, Delhi, while the Indian economy burns. Just don’t expect the Reserve Bank of India to play fireman anymore................... 

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Low inflation vital to secure growth, says RBI

.....Some analysts had commented on the discouraging effect of RBI’s decision on already slowing growth. “That’s one way of interpreting it. But we don’t know the counter factual. We don’t know what would have happened to inflation, to growth if RBI didn’t tighten the policy,” Subbarao said.......

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SBI to reduce lending rates to exporters soon

Within days of the Reserve Bank massively increasing the export refinancing limits of banks, State Bank of India today said it will soon bring down interest rates on loans to exporters. "We will surely cut lending rates to exporters following the RBI enhancing export credit refinance limit to 50 percent in the policy review. However, the quantum of the reduction will be decided by our Alco (asset liability committee) meeting, which will be held next Saturday," SBI Chairman Pratip Chaudhuri told PTI over phone from Guwahati............

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RBI allows non-bank entities with Rs 100 crore networth to own White Label ATMs

.....The non-bank entities will be allowed to own and operate White Label ATMs and they will provide the banking services to bank customers in India, based on debit cards, credit cards or prepaid cards issued by banks. RBI has however confined their role only to acquisition of transactions of bank customers. "Such non-bank entities should have a minimum net worth of Rs 100 crore as per the latest financial year's audited balance sheet, which is to be maintained at all times," RBI said on Wednesday.......

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The myth about low PSU bank pay

.....So should RBI now withdraw its guidelines on private sector bankers’ salaries? No. Should we now be ready to throw the idea of poorly paid PSU bankers out of the window? Well, possibly out of the study table but not the window. Averages are known to hide a lot. This time they have behaved like swimsuits, revealed a lot as well. What’s happening here? The PSU bank workforce is significantly more aged than the private banks. The average age of employees of state-owned banks is around 50, whereas the same for their private counterparts is around 30. However well the private banks may be paying their employees, it is hard to beat the public sector average since the employees are 20 years senior...........

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Don't poach loans from rivals, FinMin tells PSU banks

..........Sources from banking circle say the issue of takeover financing was discussed between the finance ministry and bank chiefs in their last meeting in Delhi where DK Mittal, secretary, financial services, asked banks not to indulge in takeover of loan. However, KC Chakrabarty, deputy governor, Reserve Bank of India, felt such a practice cannot be completely discouraged. "At times a customer may be unhappy with the prevailing lender. He should, therefore, have the right to choose a new lender," said Chakrabarty.......... 

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Kerala to float NRK bonds for development projects

....Citing the latest study on the Kerala diaspora by the Centre for Development Studies (CDS), Joseph told the assembly that the total money that arrived in the last fiscal in Kerala banks, mostly from Middle-East employed Keralites, was a staggering Rs.50,000 crore. He was replying to a motion moved by treasury bench legislator P.Ubaidullah who sought the immediate attention of the state government to channelise the NRK deposits in Kerala banks for productive purposes. "We also have decided to open an exclusive bank for NRKs and we have now got in touch with the Reserve Bank of India (RBI) for the necessary clearance," added Joseph.......

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RBI’s directive on unoperative/unclaimed deposits violated

.........If you thought that the recent Reserve Bank of India’s (RBI) directive to banks would make it easier for customers to retrieve long lost deposits of a deceased kin, think again. Apparently, one such bank has violated RBI’s directive, in spirit and word, one week before RBI’s 30 June 2012 deadline for compliance. This was brought to notice by a Moneylife reader. Karnataka Bank, instead of putting names and addresses of unclaimed deposit holders, has instead put the onus on the users to search for names.........

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Union Bank of India starts process to hire 1636 clerks

....One of the leading PSU bank, Union Bank of India has started recruitment process for 1636 vacancies for the post of Single Window Operator 'A'/Clerk..........

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Banks told to release crop loans to farmers on time

.....Expressing dissatisfaction that just 18 per cent of the target had been met in disbursing loans for allied activities in 2011-12, Mr. Jayaram appealed to officials of the Reserve Bank of India (RBI) and the lead banks to initiate action against those banks that did not disburse enough loans for allied activities in the district......

Read - The Hindu

Ensure opening of Aadhaar-enabled accounts: RBI asks RRBs

 The Reserve Bank today directed Regional Rural Banks (RRBs) to ensure opening of Aadhaar- enabled banks accounts for beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Scheme and other social security schemes, for facilitating electronic transfers.............

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SBI chairman visits Shillong

SHILLONG, June 19: Is the change of small coins by traders in the city causing artificial shortages of coins? According to State Bank of India (SBI) officials, the coin vending machine at the SBI, Shillong Main Brach, is mostly used by traders. “We mostly find traders visiting this vending machine,” an SBI official told a group of reporters on Tuesday. According to SBI officials for the year 2011-2012, Rs 50 lakh worth of coins were distributed to customers and for the current year, Rs 4-5 lakh has already been distributed. Meanwhile, SBI officials also stated that they would ask the Reserve Bank of India (RBI) officials to increase supply of coins to the State. Meanwhile, the SBI officials also informed that there are two mobile banks in Meghalaya who visit remote areas of the State for providing banking transaction at the doorstep of people. Earlier, SBI chairman Pradip Chaudhari, as part of the Corporate Social Responsibility (CSR) of the bank, donated an ambulance to the Christian Hospital.

The Sentinel

Deadbeat corporate borrowers? Not in India

Lenders are willing to amend loan terms instead of acknowledging NPAs

.......While restructuring is allowed by the RBI, the murkier "evergreening" of loans is frowned upon. Several bankers said it is widespread, but declined to give details. The practice is said to be particularly common in commercial real estate, where tougher restructuring guidelines require banks to classify a loan as non-performing and set aside more funds as provisions - effectively removing any official middle ground between a performing loan and a default..........

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