The Hindu
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Thursday, June 28, 2012
RBI Q1 review on July 31
The Hindu
Are cooperatives financially included?
It is both strength and opportunity for cooperative banks to further financial inclusion in the country. In one of the recent speeches, Mr Anand Sinha, Deputy Governor of Reserve Bank of India (RBI), said that many artisans, migrant labours, small businessmen, retailers etc in semi-urban and rural areas of a number of un-banked and under-banked districts in the country find it difficult to join the formal financial sector and make use of various opportunities. He had suggested that urban cooperative banks (UCBs) take a lead in bringing them to banking network on social and economic grounds...............
Urban cooperative banks hit by new RBI rules
....."The new parameters are harsh indeed, and likely to hamper smooth functioning of the cooperative sector. The matter has been taken up with the RBI. There are some banks in the region who may not be able to meet the new parameters. What is worse is that the rule has been made applicable in retrospect, from March 2011,".....
RBI draws up plan to usher in less-cash deals
The Reserve Bank of India (RBI), on Wednesday, said that it planned to enhance the availability and acceptability of alternative payment instruments in lieu of cash to move towards less-cash economy and promote ‘mobile wallets’ as a single instrument for carrying out financial transactions. “The level of customer protection available in paper transactions and electronic transactions in India varies. In paper transactions in the case of fraudulent or unauthorised transactions, the responsibility to prove ‘good-faith’ lies with the banks, whereas in electronic transactions, the onus mostly lies with the customers,” said RBI in its ‘Payment System Vision Document 2012-15’, which was released on Wednesday for public discussion. Comments can be sent to the RBI by July 31.............
e-Payment must for public sector banks from July 1
....."The cost of handling a cheque during its life cycle, from printing till storage and destruction, is Rs 25 to Rs 40," said a finance ministry official. "Banks have significantly invested in technology as well as in developing various applications for electronic payment. That should be put to use." The circular said concerted efforts should be made by the banks and their sponsored regional rural banks to popularize e-payments and to bring down the number of transactions through cheques........
In lighter vein................. RBI introduces 1, 50, 100 Crore Rupees currency notes to keep up with inflation in corruption
With persistent double digit inflation, the price of high level corruption has also sky-rocketed, so much so that it has become increasingly cumbersome to conduction high value transactions using wads of Rs.500 and Rs.1000 notes. In order to reduce such dead-weight transaction costs and improve liquidity in the corruption sector, the RBI has decided to introduce currency notes in denominations of 1, 50 and 100 crores into the economy. The FICCE (Federation of Indian Chambers of Corruption in Everything), an apex body that caters to the interests of big players in the black economy has lauded the move.............
Coriander s/o Pulao, Aadhaar No 499118665246
Coriander and an apple, as per the Unique Identification Authority of India (UIDAI), are residents of India as they have been given an Aadhaar number. And this, perhaps, has been the last straw. Expressing shock at this, not to mention there having been several complaints of impersonation, the Union home ministry has asked UIDAI to get an internal as well as external security audit done by a third party to fix the lacunae in the enrolment system and avoid any more goof-ups.......
RBI asks primary dealers to stop short-term debt issues
The Reserve Bank of India (RBI) said standalone primary dealers will not be allowed to raise capital through short-term bonds from July 1, and should instead issue long-tenure debt to strengthen their capital base and align with Basel III norms for banks..............
Banks to hire vendors to run ATMs
To do away with regular complaints about non-delivery of cash from ATMs (automated teller machines), India’s central bank, the Reserve Bank of India, has reportedly asked all bankers to discontinue setting up their own ATMs. By next month bankers will hire vendors to set up ATMs and run them on fee basis. “From next month onwards we will not set up our own ATMs. At present, vendors only maintain ATMs and they take time to respond to bank calls. It creates trouble to customers. Now, the vendors will not only run and maintain the machines but also install and maintain them. They will receive payments against per successful transaction,” a senior banker told Business Standard.
BS
Why getting Raghuram Rajan as PM’s adviser makes no sense
......The wisdom of appointing a man of Rajan’s stature to enhance and influence the government’s economic policymaking is, however, open to question. Not because he doesn’t have ideas to contribute – he does – but because the government is not exactly lacking in ideas to fix the economy. The government’s all-star economic team – from Manmohan Singh himself to Montek Singh Ahluwalia to C Rangarajan to Kaushik Basu to RBI Governor Duvvuri Subbarao – have between themselves analysed the economy threadbare, and can comfortably agree on the broad contours of policy action needed.......
PM wants revival of economy with 'animal spirit'
Signalling his keenness to boost the economy a day after taking charge of the Finance Ministry, Prime Minister Manmohan Singh on Wednesday directed urgent steps for revival of investor spirit and reversal of the climate of pessimism with regeneration of "animal spirit". Taking stock of the country's economy in a series of high level meetings here, he identified tax issues, sluggishness in insurance sector and aspects related to mutual funds as problem areas and pressed for quick corrective steps. The meetings were attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia, PMEAC Chairman C Rangarajan and top Finance Ministry officials. He will meet RBI Governor D Subbarao and Planning Commission members tomorrow as part of his review of affairs concerning the economy.............
AP annoyed at closure of bank branches in tribal areas
......Earlier, SLBC president and Andhra Bank CMD B. A. Prabhakar disclosed that many branches had been closed in East Godavari district’s tribal areas like Maredumilli, Y. Ramavaram, Addateegala, Devipatnam, Rayapalli and Gangavaram. After learning about their closure RBI had ordered reopening of these branches at once, he said.
Banks' business growth little changed in June: RBI
India banks' growth in deposits and loans was sluggish in the month to June 15, the Reserve Bank of India said on Wednesday.........
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Will the new RBI guideline bring in more QFI money?
Industry opinion is that this measure is likely to do very little as most investors overseas have better options
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RBI directs Uday Kotak to lower stake in the bank
The Reserve Bank of India has directed Uday Kotak, promoter of Kotak Mahindra Bank to lower his equity stake in the bank from 45.2 per cent to 10 per cent in phased manner. Uday Kotak has been given time till 2018 to bring down his stake to 20 per cent and lower it to 10 per cent in subsequent two years.............
Short measures
The Reserve Bank of India (RBI) has announced certain liberalising measures relating to the capital account. The central bank’s press release does not mention the objective, but one can guess it. If the idea is to improve capital inflows to relieve the downward pressure on the rupee, it is not likely to be realised by raising the ceiling on foreign subscriptions to government securities. They will go into the forex reserves of the RBI, which will give an equivalent credit to the government account in rupees. Thus, the funds will augment the bank’s reserves and not the forex supply in the market. There may not be any addition to net RBI credit to the government. RBI should clarify the accounting procedure for the benefit of analysts. It will, however, mean the monetisation of current fiscal deficit that will have an expansionary effect on money supply. This is worse than what is done now through the buybacks of gilts under open market operations, which imply retrospective monetisation of the past fiscal deficit. The response is not likely to be large since foreign subscribers have to bear heavy hedging costs against the possible depreciation of the rupee at the time of redemption of the securities.
- A Seshan Mumbai (BS)
Right move
This refers to the editorial ‘Balancing act’ (Business Line, June 27). Just after its mid-quarter review, the RBI has sought to upgrade the falling rupee by attracting foreign investments. The introduction of government bonds is a welcome move. Enhancing the limit for foreign institutional investments is a right step to attract dollar inflows. It is also expected that this will attract foreign investments in view of relaxation in rules. It will be easier for new classes of investors to invest in gilts as the RBI’s move also ends entry barriers. It will also be a good chance for Corporate India to go in for ECBs.
- Jayant Mukherjee, Kolkata (HBL)
Stop gold coin sales
This refers to the report “Central Bank likely to impose curbs on gold coin sale” (June 27). The Reserve Bank of India should take serious steps to curtail gold coin sales by not only banks, but other channels also like MMTC, post offices and so on. By doing this, the government will achieve two targets: one, it will be able to gradually wean investors away from such non-productive assets; and, two, it will save considerable amount of foreign exchange that is spent on gold imports.
- V Sridhar Kolkata (BS)
Curb gold; raise duties; borrow more – Are these solutions?
.....the Reserve Bank wants to impose curbs on banks selling gold coins to customers. A report in Business Standard quoted an RBI official as saying: “Banks were allowed to sell gold by importing it to fight the excess dollar flows. By the same logic, the measure should be reversed now as we are at the opposite end of the spectrum. It was a temporary measure, which unfortunately was made permanent by banks.” Temporary measure? Is liberalisation a temporary measure?.......
TJSB Sahakari – 40 and going strong
......The bank has also received permission from the Reserve Bank of India for starting mobile banking services and the bank has completed all the testing to start inter-bank mobile payment system (IMPS). The bank has received approval from the Reserve Bank of India for opening branches in Maharashtra, Goa, Gujarat and Karnataka. During the current financial year, 20 branches would be opened. The business target is the Rs 10,000-crore milestone.
Apna Bank makes big strides
......In recognition of its excellent customer services and overall progress, for the first time in the history of banking, the RBI and the Maharashtra Government have consented merging of Care Co-op. Bank Ltd. In a Non Scheduled Co-operative Bank – Apna Sahakari Bank Ltd. After that another co-operative bank from Western Maharashtra region, The Ashta Urban Co-op. Bank having nine branches, has merged into Apna Bank. Recently, one of the oldest co-op bank from Kolhapur region known as Shree Balbhim Co-op Bank Ltd having 10 branches is also merged into Apna Bank. Apart from this the bank has opened seven more branches during this financial year. Apna Bank having 46 branches and ATM centres at all over Maharashtra as on March 31, has received multi-State permission from the Reserve Bank of India to open the branches at Gujarat, Goa and Karnataka. The bank has been allowed to provide direct RTGS/ NEFT Services by Reserve Bank of India...........
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