Tweak financial regulation - Y.V.Reddy

.........In revisiting the issue of regulation in conjunction with competition and ownership, it is necessary to recognise the lessons from public sector banking in the 1970s and 1980s, particularly in developing and emerging market economies. The problems in the past with public sector banking were on due to financial repression attributable to macroeconomic policies, the lack of appropriate global standards of regulation, the existence of monopoly status, and technological obsolescence, in addition to standards of governance in public systems in general, and public ownership in particular..........

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Monetary policy for villages only

India has two economies: One for the urban rich and the other for the rural poor. The RBI should encourage the wealthy to invest in rural India by reducing interest rates there.

Like Mr Kapil Sibal’s policy of ‘one nation, one examination,’ the Reserve Bank of India has a policy of ‘one nation, one interest rate’: it offers the same rate whether it is a rich city such as Mumbai or a poor village in Keonjhar, Odisha. The fact that it has not produced the desired results has made no impact on the central bank. .................

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International Conference on Risk Management and Fraud Detention

.....Mr. Vijaya Bhaskar, ED of RBI explained in detail the regulatory expectations. He said that fraud is an area of concern as it undermines the trust, which is the foundation stone of the banking business. He emphasized that the three lines of defense against Fraud – the employees, the systems and controls and the external agencies like the regulator and law enforcement agencies- should be strengthened. He insisted that for establishing a strong anti fraud culture the first two lines are to be robust. .........

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Dr.Sandip Ghose - The honour well deserved...........

 

E-payment facility for all MGNREGA beneficiaries by Oct

.....Over six million households registered in the state under MGNREGA will benefit from the facility. The RBI Deputy Governor also rolled out an improved model of electronic receipts of the state government. The new model envisages a mechanism where the agency banks will forward the particulars of electronic receipt transactions on the day following the day of transaction to RBI-Bhubaneswar instead of sending to the cyber treasury. RBI will process the e-receipt files, debit the accounts of banks and credit the account of the state government instantaneously with the amount of e-receipts. The Central bank will also generate e-scrolls and forward the same to the cyber treasury.........

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Former Bank of Maharashtra chairman Anup Sankar Bhattacharya takes over as director of IBPS

Former Bank of Maharashtra chairman Anup Sankar Bhattacharya has taken over as the director of Institute of Banking Personnel Selection or IBPS, which conducts common admission tests for bank recruitment. Bhattacharya will replace M Balachandran who is resigning today.......

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What keeps rupee under pressure

The Reserve Bank of India announced details on balance of payment. Balance of payment is typically the sum of all transactions made between nations for a specific duration.............

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‘India must cut subsidies, push reforms to defend rupee’

......The Indian rupee is likely to slide further and might soon touch 58 to the dollar as regulatory measures by the central bank are unlikely to have any significant impact on the currency, analysts say.

“The monetary policy has its limitations. The RBI intervention won’t do much as the issue is structural,” .........

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NBFCs at business concentration risk

.....share of non-banking finance companies in the gold loan business has risen sharply with total asset size increasing to Rs 44,510 crore in 2011- 2012 from just Rs 5,480 crore at the end of March 2009, increasing the concentration risk in the business as the growth is contributed by two main companies, according to the Reserve Bank of India Financial Stability report released on Thursday.........

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Price stability and financial stability – an emerging market

Deepak Mohanty

Address by Mr Deepak Mohanty, Executive Director of the Reserve Bank of India, in the 2012 Central Bank of Nigeria (CBN) Board Retreat, Cape Town, South Africa, 27 June 2012.

......Drawing from a wider mandate, monetary policy in India has evolved to have multiple objectives of price stability, financial stability and growth. These objectives are not inherently contradictory, rather mutually reinforcing. The Reserve Bank’s approach recognises that price and financial stability are important for sustaining high levels of growth which is the ultimate objective of public policy. The Reserve Bank’s approach to financial stability has been proactive and preventive rather than reactive. Its role as monetary policy authority, well integrated with macroprudential regulation and microprudential supervision, with an implicit mandate for systemic oversight has enabled the Reserve Bank to exploit the synergiesacross various dimensions..........

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Banks must behave responsibly, says Chakrabarty

.........."Market players cannot behave in an irresponsible manner and say that it is RBI's job to provide (adequate liquidity). So, every financial institution has to manage its asset and liability in a prudential manner,"..............

Read - The Asian Age

RBI to take best possible steps to check Rupee slide: Chakrabarty

New Delhi: The Reserve Bank on Friday said it will continue to take "best possible" steps to contain the slide of Indian rupee. "Whatever best possible...What Reserve Bank needs to do, Reserve Bank will continue to do that," RBI Deputy Governor K C Chakrabarty said on the sidelines of IIMA's Citi Financial Literacy Symposium here...........

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RBI says about 9% of bank branches most reluctant to lend

The reluctance of bank branches to lend to the poor is hampering effective implementation of the Manmohan Singh government's financial inclusion scheme, being promoted as an antidote to the rising income inequality. Reserve Bank of India has found that 9% of the country's 92,690 bank branches are the most reluctant in lending. Their credit-deposit, or CD, ratio is less than 25%. Loan disbursals through these offices fell by 15.4% year-on-year to December 2011 as against a 4% rise in the corresponding period in 2009-10.................

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RBI imposes Rs2 lakh penalty on Rajasthan bank for excessive service charges

The action by the apex bank should serve as a pointer to other banks—big and small—that charge excessive service charges

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs2 lakh on the Bundi Urban Co-operative Bank located at Bundi in Rajasthan. According to a press release, the bank has been penalised for "repeated violations of Reserve Bank of India (RBI) directives relating to donation and levy of service charges on customers". A show-cause notice was sent to the bank, but the central bank found the response unsatisfactory. Levying monetary penalty for violation of RBI guidelines on services charges to customers is the first of its kind by the RBI. The action by the apex bank should serve as a pointer to other banks-big and small-that charge excessive service charges.

Moneylife

Current account deficit swells

.....“The stress witnessed in India’s Balance of Payments (BoP) in the third quarter continued during the fourth quarter of 2011-12 as well due to large increase in imports,” .........

Read - The Hindu

RBI warning as BoP deeper in red

..........Reflecting India’s growing vulnerability on the external sector, all the key parameters of the balance of payments (BoP) are flashing amber.................

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Banking on Pranab

........At the moment, it’s a problem of plenty. Omarpur, a small town on the way to Mukherjee’s home in Jangipur, has seen 20 banks spring up in the last couple of years. From private banks like ICICI Bank and Axis Bank to Bangiya Gramin Vikash Bank (a regional rural bank) and state-owned United Bank of India, the people of Omarpur are clearly spoilt for choice. There are too many banks chasing too few customers. Customers are therefore treated like royalty here. So intense is the competition among banks in Omarpur that in the last one year, around four branch managers have sought transfers because they found it impossible to meet the business targets assigned them................... 

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Gold loan business model worries RBI

RBI on Thursday expressed concerns that the business model of gold loan companies is driven by borrowings, of which, bank finance forms the major component and is increasing at a fast rate. Any adverse development in recovery by these NBFCs or an adverse movement in gold prices may have a spill-over impact on the asset quality of the banks, the central bank said in its financial stability report.

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So much of glitter

The spirited advice by a Reserve Bank of India official that Indians — especially the poor — must keep away from investing in gold because such investments are speculative, is unlikely to be heeded by many. This recent suggestion has been made by Reserve Bank of India Deputy Governor KC Chakrabarty obviously because huge amounts of gold imports are adding to the country’s current account deficit and dragging the value of the rupee down. Mr Chakrabarty’s concern is understandable..............

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KYC: An effective tool to fight money laundering

Money laundering poses a serious threat to the health of India’s financial sector. It is the process by which criminals conceal the origin and ownership of the proceeds of crime by legitimising illegally obtained money, channelising surreptitiously through legitimate business channels and integrating those to the financial system through ways like bank deposits, investments or transfer. Financial institutions like banks, insurance companies and stock markets are most vulnerable to such intrusion and therefore, the need to protect these institutions from the debilitating effect of laundered money. This is intended to be achieved by implementation of Know Your Customers (KYC) policy and Customer Due Diligence (CDD) guidelines across the financial sector...........

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“Expedite smart cards scheme”

.... A.J. George, Assistant General Manager of Reserve Bank of India (RBI), reviewed the banking indicators of the district. While expressing broad satisfaction, he pointed out with concern that advances to minorities was only 2 per cent instead of the mandated 10 per cent. He urged bankers to focus on this section and also improved their reporting.......

Read - The Hindu

SEBI’s ED Usha Narayanan demits office

......She also served in IOSCO’s inspection committee, RBI’s conflict of interest committee and the Government of India committee on ADR/GDR/FCCB policy......

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RBI's diktat capping debit card charges could spur usage

Come July 1, and you could see retailers across the country urging you to use your debit cards instead of credit cards. The reason? The recent directive from RBI asking banks to charge a maximum of 0.75-1% (of amount swiped) on debit card transactions at point-of-sale (POS) terminals. The objective is to make it cheaper for retailers to operate the POS infrastructure and thereby encourage use of debit cards over credit cards.............

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With fees halved, kirana shops may accept debit cards

......However, there is some confusion on who will reduce charges as the MDR is shared by the card issuing bank, Visa and MasterCard and the bank that has installed the point of sales terminal (acquiring bank). At present, the onus of recovering MDR is on the accquiring bank although most of it goes to the issuing bank. Card companies are seeking clarity from RBI on the extent of reduction by each player.......

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