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Friday, August 3, 2012
Rangarajan sees growth topping RBI’s 6.5% projection
A cover for action
........Whether it is commodity price volatility or exchange rate movements, they have preferred a policy of frozen inaction to a proactive one of hedging against such risks. As the Reserve Bank of India (RBI) Executive Director, G Padmanabhan noted only the other day, higher volatility in the rupee’s exchange rate is the ‘new normal’ in the current uncertain global environment.....
RBI asks banks to assist clients in gaining financial literacy
Bank branches need to have a more proactive role in the affairs of their micro and small enterprise (MSE) clients by providing them with financial literacy and consultancy support, according to the Reserve Bank of India. Towards this end, banks could either separately set up special cells at their branches, or vertically integrate this function in the Financial Literacy Centres (FLCs) set up by them, as per their comparative advantage. The RBI said banks should submit an Action Taken report by August 24 on financial literacy and consultancy support...........
Do’s and don’ts on plastic cards likely for banks
Thiruvananthapuram, Aug 1: Office of the banking ombudsman for Kerala and Lakshadweep may suggest a do’s and don’ts list to banks issuing credit/debit/ATM cards to customers. But this office has no right to put out a circular in this regard, Joseph F. R., Banking Ombudsman for Kerala, Lakshadweep and Mahe, told newspersons here............
Ease and convenience but at a cost
Cashless transactions are catching up fast in India. The total number of debit and credit cards in the country has increased roughly at a compounded annual growth rate of 20% in the last two fiscals, according to data compiled by Visa from data released by the Reserve Bank of India (RBI)................
SBI announces 7440 vacancies for clerical posts in associate banks
There is a good news for the aspiring candidates who have missed the State Bank of India clerk exam held in May-June 2012 as the bank had announced recruitment notification for clerical jobs in its associate banks. The eligible candidates can apply for 7400 vacancies in the five associate banks of SBI, the largest public sector bank of the country.............
Par Panel to summon RBI Governor over poor growth
.....Significantly while it is the first time that the panel has decided to summon the RBI Governor to discuss the state of the Indian economy, the move seems to be in line with international practices where central bank heads are answerable to Government panels.The panel which is headed by senior BJP leader and former Finance Minister Yashwant Sinha, sources said, has been quite concerned about the poor economic growth over the last few months and in order to get behind the actual reasons for the disappointing performance, has decided to summon Subbarao for a discussion on the matter on August 6............
RBI Governor summoned
.....If Subbarao agrees to appear before the committee, it will be for the first time that the RBI becomes answerable to the Parliament. Finance ministry officials feel it would have been better if the committee invited the governor for consultations instead of summoning him like a bureaucrat in the government..........
‘Indian regulatory norms insulate it from crisis situations’
While countries across the world, as well as India, are all undergoing a downturn, India is immune from the side effects because of good banking and regulatory norms drawn up by the RBI, said V. Gopalan, Director, Janhar Management Consultancy Pvt Ltd........
On FinMin push, govt banks eye gold loan business
.....PSBs’ thrust in this segment also comes after the finance ministry nudged them to enter this lucrative segment and at a time when the central bank has been expressing some discomfort over NBFCs becoming aggressive here. The Reserve Bank of India (RBI) has taken away priority sector status given to banks for their loans to NBFCs for on-lending against gold jewellery.......
Kaushik Basu farewell note: More woes
On a day when the Reserve Bank of India left policy rates unchanged due to persistent inflationary pressures and failure of the government to rein in fiscal deficit, the outgoing chief economic advisor, Kaushik Basu, said Indian economic woes are far from over with growth likely falling below 6 per cent in the first two quarters of current year...........
SC declines US firm’s plea on RBI norms
In a tax dispute arising out of global business transactions, the Supreme Court has declined to entertain a petition of US company Columbia Sportswear raising various questions on the RBI guidelines for assessment of tax liabilities of foreign entities on their business operations in India......
Regional rural banks allowed to start branches in Tier 2 cities without RBI nod
....."In order to enhance the penetration of banking services in Tier 2 centres, it has been decided to allow RRBs to open branches without having the need to take permission from Reserve Bank of India in each case," the apex bank said in a notification......
Unclaimed deposits in 85 banks account for Rs. 2,481 crore
....Replying to a query made by the RTI applicant Subhash Chandra Agrawal of Delhi as to whether any steps were being taken to transfer such unclaimed deposits to Central funds, the Central Public Information Officer (CPIO) of the RBI said the Banking Laws (Amendment) Bill, 2011, had been introduced in the Parliament and a new Section 26A regarding establishment of Depositor Education and Awareness Fund was proposed.......
RBI penalizes Ernakulam District Co-op Bank
The Reserve Bank of India (RBI) has imposed a penalty of Rs. 5 lakh on Ernakulam District Co-operative Bank Ltd, Ernakulam (Kerala) for violation of rules.............
RBI, foreign banks clash on priority lending norm
.....Foreign banks are not willing to accept the new norm, which will only come into effect in August 2018, as they say profitability will be eroded. Under RBI rules, any bank that fails to fulfil the priority loan norm is required to keep money with the National Bank for Agriculture and Rural Development (Nabard) for rural infrastructure development. Earnings on this are much lower than what a bank will get from giving loans.......
IOB needs Rs 1,500-cr capital infusion to meet Basel-III norms
.....The government has asked public sector banks (PSBs) to send their capital requirements under the recently notified Basel-III norms of the Reserve Bank of India. Most PSBs have done so........
Most consumers feel bank loan rates are high
The Reserve Bank of India’s decision to leave key policy rates unchanged in its latest quarterly review is likely to leave not just industry but also consumers disappointed. The RBI’s latest Consumer Confidence Survey for the June quarter indicates that nearly three-fourths (74.8 per cent) of Indian consumers feel that current interest rates on bank loans are high, while 77.2 per cent say their deposits do not attract enough interest............
Losing the battle
.....The central bank does not seem to be focusing on its main aim of “controlled expansion”; it has instead maintained its avowed focus on “controlling inflation”. Unfortunately, things are not happening the way the RBI desires. One is not sure whether the policy stand the RBI governor has taken in the recent monetary policy review will help control inflation. But it will certainly dampen sentiment. If addressing the causes of inflation is beyond the scope of monetary policy, as argued by the RBI governor, why isn’t anything being done to induce the sources of economic growth — the primary being the cheapening of the investment cost for productive economic activities?......
RBI Plays Cruel To Be Kind
...........The RBI has raised concerns about the global economic factors, categorically stating that despite a slowing economy, the outlook for commodity prices is uncertain. The bank has also raised concerns about increased subsidy burdens on account of a truant monsoon. ..........
Why the RBI preferred an SLR cut
........The RBI did not have to wait for two and a half years to realise that repo is not really the solution to inflation. The RBI had targeted repo because the interest rate that the banks charge remains above the inflation rate. The real rate of interest — as the difference between the two is called — has to be positive to ensure that people do not give up their savings habit and debtors are not subsidised by creditors. There was a more relevant reason why the RBI did not cut the repo rate.............
Why small could be big for Chidambaram
.....The RBI, currently headed by Duvvuri Subbarao who has had a distinguished stint in the finance ministry before taking charge at the central bank, has already made it clear that its hands are largely tied as far as reducing interest rates to spur growth is concerned. It has reduced rates 50 bps in April and cut the statutory liquidity ratio (SLR) by 100 basis points (one percentage point) on 31 July to allow some banks to lend to productive sectors. But beyond that, monetary policy can achieve precious little. The ball is now clearly in New Delhi’s court. And Chidambaram will have to be the principal player.......
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