RBI advisors backed hold on rates in July

Most of the Reserve Bank of India's external advisors supported Governor Duvvuri Subbarao's decision to keep interest rates steady last month, in stark contrast to their opposition to the bank's surprise sharp cut in rates in April. Minutes from the quarterly review of policy released by the central bank on Tuesday showed five of the seven external members of the governor's advisory committee had favoured keeping rates on hold......... 

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Inflation concerns remain: RBI panel

The remedies to fix the economy, which is in a bind with slackening growth and elevated inflation, lie with the Government. This view was expressed by the members of a Reserve Bank of India panel on Monetary Policy..........

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Retail inflation dips marginally to 9.86%

.....RBI Governor D. Subbarao said the headline inflation was “way above” the central bank’s threshold level. Typically, 5 per cent is considered as a threshold level of inflation in a high growth economy. RBI needs inflation to fall sharply if it plans to cut borrowing rates and stimulate growth in the economy. RBI will decide on any monetary action next on September 17............. 

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Back in the reckoning

After spending a nearly a year at the Deposit Insurance and Credit Guarantee Corporation, Reserve Bank of India’s Executive Director G Gopalakrishna is back at the central bank in the Department of Banking Supervision. Gopalakrishna had been a strong contender for the Deputy Governor’s post but dropped out of reckoning and was shifted to DICGC. Now that he is back and will become the senior-most ED when Deputy Governor Anand Sinha retires next February, he will be a strong contender to replace Sinha.  

BS

Obiturary

Kum Nalini Ambegaonkar passed away in Baroda on August 19^th 2012.  She was 89 years old. She retired from RBI as Adviser in Charge of the erstwhile Credit Planning Cell. She had worked for decades in the Economic Department and apart from Mumbai she had worked in Calcutta. A large number in our Groups have worked with her. May her soul rest in peace. 

 - P.P.Ramachandran (via e-mail)

RBI official to appear in court

A division bench headed by Chief Justice Vikramajit Sen directed a senior official of the Reserve Bank of India connected to non-banking financial companies (NBFCs) to appear in court and explain the policy in court on September 13. Earlier, during the hearing of a PIL over the exorbitant rate of interest charged by Manappuram Finance and Muthoot Finance companies, the counsel for RBI informed the court that except housing and agriculture loans which are considered a priority sector, other things are left to the market to decide and the RBI does not exercise any control.........

Read - TOI

Bank should tally signatures

The State Consumer Disputes Redressal Commission has observed that levying charges of shopping done through debit or credit cards, without checking the signature on the charge slip and specimen signatures maintained by the bank, is deficiency of service on the part of the bank...........

Read - DNA

Bank employees on two-day strike from today

......Employees of 27 public sector banks, 12 private lenders and eight foreign banks will stay off work to protest the government’s decision to pass an amendment to the banking laws bill, expected to come up for discussion in Parliament on Wednesday, according to C.H. Venkatachalam, convenor of UFBU.....

Read - Mint

Parliament may take up banking Bill

The government has listed the much awaited Banking Laws (amendment) Bill, which seeks to strengthen the regulatory powers of the Reserve Bank of India, for consideration and passage on Wednesday in the Lok Sabha............

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Corporates misused forex hedging instruments: RBI ED

Who is responsible for the instability in the currency market in the recent past? A Reserve Bank of India official has said forex hedging instruments became “weapons in the hands of corporates to trigger market instability” and they did not take a “well-deliberated and calculated call” while hedging the risk............

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ED of RBI sees a rosy future ahead for the state

Stressing that Odisha’s economy needs to retain the growth momentum and a concerted effort made to raise its farm productivity in particular, Reserve Bank of India Executive Director Deepak Mohanty predicted a rosy picture ahead about the economic and financial developments of the state. Mohanty made the prediction in the backdrop of a disciplined fiscal position of the state which now ranks seventh among the all the states of the country.............. 

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Assocham asks RBI to set up rolling fund for rupee stability

NEW DELHI: The Reserve Bank should consider setting up a rolling fund for trading in foreign exchange or allow Indian firms to issue dollar-denominated shares to avoid rupee fluctuations, industry body Assocham said today......

Read - ET

RBI tightens norms for securitisation of loans by NBFCs

....Giving details of the guidelines, the RBI said a loan upto two years can be securitised only after payment of three monthly instalments by the borrower. The limit for loans between two and five years is six monthly instalments and above five years, 12 monthly instalments. With regard to minimum retention requirement (MRR) for securitisation, ......

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‘No blanket exemption from CCI oversight’

....Earlier this month, the Reserve Bank of India had written to the finance ministry saying that banking sector merger should not be under the purview of the CCI. The finance ministry had also opposed a Cabinet Note proposed by the corporate affairs ministry on bringing banking mergers under the Competition Commission of India (CCI) saying that the body was not equipped to handle the issue......

Read - Indian Express

NBFCs must retain 5% loan sold to another entity: RBI

...........Giving details of the guidelines, the RBI said a loan up to two years can be securitised only after payment of three monthly installments by the borrower. The limit for loans between two and five years is six monthly installments and above five years, 12 monthly installments........... 

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Andhra mum, MFIs glum

REVIVAL ROADMAP

12% is the interest margin that Microfinance Institutions Network (MFIN) are looking at  MFIN wants the Reserve Bank India to restore the interest margin between MFI borrowings and lending.   Margin is the difference between the interest rate at which an MFI borrows and the rate of interest at which it lends  10% and 12% is margin cap for MFIs with a credit portfolio of less than Rs 100 crore and more than the above amount, respectively. RBI fixed this via a circular dated August 3  Rs 100 crore will be the credit portfolio of less than 12 MFIs out of the 47 members in MFIN, according to Trident Microfin MD Kishore Kumar Puli

Read - BS

Soon, a bank-wide portal that will allow you to shop for best service

How convenient it would be to compare at one place interest rates on deposits offered by various banks, their retail loan rates, margin amounts they require, the processing fees they charge, the add-on facilities they offer on deposits, and so on. Extremely. The Finance Ministry also thinks so, and wants public sector banks,a la travel portals such as cleartrip, makemytrip, yatra and expedia, to explore the feasibility of setting up a bank-wide portal......

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Banks told not to bid for bulk deposits

.....Bankers said RBI Deputy Governor K C Chakrabarty told them nowhere in the world such bidding for bulk deposits happened and Indian banks should also refrain from doing so. Bulk deposits are of 30 days to one-year maturity and of amounts varying from Rs 1 crore to Rs 1,000 crore or even more. The move comes after the finance ministry issued norms that required banks to reduce the proportion of bulk and certificate of deposits to 15 per cent of the total deposits by March 31, 2013........ 

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PSBs may seek more time to comply with bulk deposit norms

....“Some of the public sector banks are likely to approach the Finance Ministry to seek more time for complying with the norm to reduce bulk deposits to 15 per cent of total deposits,”.......

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Is your child financial savvy?

.....Portals and websites launched by financial institutions can also help your children learn about finances in a fun way. The Reserve Bank of India's (RBI) website has a financial education section for kids, which explains the roles and functions of RBI and banking concepts like inflation, monetary policy through comic characters, puzzles and games......

Read - BS

Get locked into bank fixed deposits for 2-3 years

KEEPING IT SAFE Bank fixed deposit returns on investment of Rs1 lakh
Bank Name	Duration	interest (%)	amount (Rs)
The Catholic Syrian Bank	Above 2 years to 3 years	10	1,33,100
State Bank of Bikaner & Jaipur	3 years and up to 5 years	9.5	1,31,294
Dena Bank	3 years to less than 5 years	9.3	1,30,575
ICICI Bank	2 years to less than 5 years	9.25	1,30,396
HDFC Bank	2 years 17 days to 3 years	9.25	1,30,396
Bank of Baroda	1 year and above up to 3 years	9	1,29,502
State Bank  of India	2 years to less than 3 years	9	1,29,502
Punjab National Bank	1 year to 5 years (except 111 days)	8.75	1,28,613

Read - BS 

Top four PSU banks slip in asset quality

.....According to Reserve Bank of India data, public sector banks burnt their fingers most in terms of loan restructuring, while foreign banks have actually seen a dip in the ratio of restructured standard advances to gross advances, while private sector banks have seen a marginal increase.

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It’ll be tough for wilful defaulters

Banks have decided to get tough with wilful defaulters or borrowers who have not repaid bank loans despite having the capacity to do so. Saddled with rising bad debts, banks are pressing for imposition of stricter penalties, including a ban of up to five years on floating of new ventures by the promoters of such firms. Besides promoters, auditors, if found to have wrongly presented facts about borrowing companies, will be held accountable........

Read - Hindustan Times

Loan norms for roads to be reviewed

With many highway projects finding it difficult to reach financial closure, the government is seeking a review of guidelines for lending to such projects. The finance ministry and the Reserve Bank of India are considering a proposal under which banks could treat escrow accounts as collateral for projects where annuities are not backed by a government guarantee...... 

Read - BS

HC asks Centre, SEBI to reply to plea on automated trading

....Besides Sebi and Finance Ministry, Justice Rajiv Shakdher has also issued notices to Reserve Bank of India, BSE and NSE on the plea alleging algorithmic trading put small investors at a disadvantage in comparison to big brokers and FIIs. .....

Read - BS