.....Against this background, let me now turn to the financial inclusion strategy of the Reserve Bank and what are the specific steps taken for Uttarakhand? It is important to bring the poor and under-privileged sections of the society within the banking fold for inclusive growth. In this context, our recent financial inclusion drive has four key elements......
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, September 4, 2012
EDB holds Kissan mela
Srinagar, Sep 2: E D Bank organized a Kissan Mela at Sugain, a remote village in Khag block of district Budgam. Chief Guest Ravinder Koul, AGM Reserve Bank of India on the occasion urged the farmers to come forward to avail KCC from the Bank for development of Agriculture in the area. “The area has a lot of scope and potential for Agri credit absorption,” he said. He suggested productive use of the credit and timely repayment of dues so that Banks can recycle the funds.
Greater Kashmir
RBI asks banks to issue cheques with uniform features by Sep 30
Mumbai: The Reserve Bank today directed all banks to issue cheques with uniform features conforming to Cheque Truncation System (CTS) 2010 standard by end of this month. The homogeneity in security features act as deterrent against frauds, and the fixed field placement specifications facilitate straight-through-processing at drawee banks' end through the use of optical or image character recognition technology, RBI said in a notification......
State B Bikaner - Appointment of RBI Nominee Director on the Board
State Bank of Bikaner and Jaipur has informed BSE that Reserve Bank of India, vide its letter dated August 22, 2012 has appointed, in terms of powers vested with RBI vide section 25(1)(b) of State Bank of India (Subsidiary Banks) Act, 1959, Smt. Malvika Sinha, Chief General Manager, Reserve Bank of India, New Delhi as RBI Nominee Director on the Board of State Bank of Bikaner & Jaipur with immediate effect, vice. Shri Rajesh Verma.
Lateral hiring frustrates staff: Pratip Chaudhuri
............Chaudhuri suggested that banks change the way they compensate people. He explained that the compensation structure of any employee was biased in favour of metros. “I think we need to have a reverse compensation. There should be a compensation to work in rural, semi-urban areas. In the next wage revision with the Indian Banks’ Association, this would one of the things (that would be addressed),” he added.
SBI chief for a national debate on CRR
State Bank of India (SBI) Chairman Pratip Chaudhuri, on Monday, reiterated his stance on Cash Reserve Ratio (CRR) that it should be phased out completely and wanted a debate on the subject.........
My View on "CRR - Breaking self imposed silence.........."
If in India the effect of CRR, as argued by Dr. Nagarajan, is neutral or even perverse, it is not clear as to why this instrument is used to block not only the statutory minimum ratio but also much in excess of it. Banks being commmercial entities and expected to make profits (fortunately, the earlier view that public sector banks are not expected to make profit is no longer stated) have a certain cost of funds and if interest is not paid even on the excess balance required to be maintained,how is this justified? Dr. Nagarajan should touch on this point.
- A. Chandramouliswaran
- A. Chandramouliswaran
Dear all,
This is an interesting debate. The point raised by Mr.Chandramouliswaran (if the effect of CRR is neutral or perverse, why it is used?) remains unanswered. Dr.Nagarajan has left it to RBI younger generation. Let it be. I do recall that myself and Dr.Nagarajan debated this issue in mid 1980s when both of us were faculty in the BTC. The debate was endless-- and now also I leave at that. Here is a link which in technical sense explains how CRR operates in a lay man's language http://www.tatamutualfund.com/Knowledge-Center/Cash%20Reserve%20Ratio.pps.
I have also attached an article (first part only is relevant) on the issue of future of CRR written in 2010
(http://xa.yimg.com/kq/groups/31273828/1757422588/name/about). Both Dr.Nagarajan and Mr.Chandramouliswaran are my best friends--no offence to any of them. I am personally somewhat sympathetic to SBI Chairman's view in the current context of the banking system being sqeezed from every corner--high policy rate, CRR with not interest, Basel III, etc., but the way in which he put forth his views invited rightly the wrath of the Reserve Bank. He was also erroneous in some part of his statement as pointed out by Dr.Nagarajan (particularly relating to CRR application to non-banks).
KSabapathy (via email)
Debating cash reserve ratio
....CRR is a time-honoured instrument in the hands of a central bank to administer and calibrate monetary policy. The reason why Mr Chaudhuri may have felt emboldened to go public is that a distinction can be drawn between monetary policy and managing liquidity...........
RBI can't abdicate its role
This refers to the Q&A with Reserve Bank of India (RBI) Deputy Governor K C Chakravarty (“It is not our job to help banks achieve targets,” September 3). His assertion that it is not the central bank’s job to help banks achieve targets ignores some fundamental issues. Who lays down the targets in the first place? Who sets limits on various activities of banks? Moreover, who owns these banks? The limits of credit provisioning to specified sectors of the economy and inter-sectoral allocations are devised by the Centre and RBI. Having laid down these parameters, it is improper to say no help needs to be extended to banks to reach these targets. Banks are severely handicapped by umpteen regulatory requirements. They do not enjoy the independence to do business on purely commercial considerations, prudential norms notwithstanding. They are not only ring-fenced by RBI regulations, but the international benchmarks laid down by the Basel requirements also create roadblocks on their strategic planning. It is also pertinent to point out that the strengths and weaknesses of all banks are not the same. Therefore, some space for individual manoeuvring is necessary.
- G R Saha Kolkata (BS)
Look beyond the repo rate
As the mid-quarter monetary policy review due on September 17 draws near, the usual speculation about the Reserve Bank of India’s (RBI’s) action is building up. There is a minority that hopes that the combination of sub-six per cent growth in the last two quarters and somewhat lower-than-expected inflation rates will persuade the RBI to drop the policy rate. The majority in the markets, however, expects no change — particularly in the absence of any visible efforts by the government to pare the fiscal deficit or improve the food-supply situation..............
Will the liquidity dry up again?
................Of course, RBI can restart bond purchases, which have been stalled for the past two months. But it is clear that without concrete policy action, there is little chance of the liquidity deficit in the system moving to surplus. Thus, a proxy rate cut may just be wishful thinking.
Bank employees welcome Central Government’s move
Tamil Nadu Bank Employees Federation (TNEF) state general secretary E. Arunachalam has welcomed the Union Government’s decision, following the recent bank employees’ strike, to withdraw the proposed amendment in Banking Regulation Act to keep bank mergers out of the ambit of Competition Commission of India........
Blame self-goals, not global crisis
........RBI starts by saying that the deceleration in growth seen in Indian economy is due to a combination of international and domestic factors. While this is correct, blaming the global environment only helps the government to pass on the buck, provides an alibi for inaction and an opportunity to attribute our own sins to ‘global factors’.........
Mamata likely at bankers’ meet for development
..........According to sources from the state finance department, the possibility of the chief minister attending the meeting of SLBC, West Bengal has become bright after a recent communication from the Reserve Bank of India (RBI) to the chief minister’s office, where the apex bank requested Banerjee to interact with the banking circle more intimately to achieve the desirable economic development of the state............
Banks may get more time to shed bulk deposits
...According to RBI’s definition, however, bulk deposits are corporate deposits that are generally Rs 1 crore and above with maturity of up to one year. “We are re-computing the share of our bulk deposits after we received the clarification from the ministry. According to the ministry’s definition, the proportion of our bulk deposit base will be lower than what we had earlier estimated. This will help us to meet the 15 per cent cap within the given timeline,” said another banker............
PSU banks make home loans a little sweeter
.....Earlier, in July, the Reserve Bank of India (RBI) announced a cut of one percentage point in the Statutory Liquidity Ratio (SLR) - the proportion of deposits that banks must invest in government bonds. PSU banks have taken advantage of the increased cash flow to make loans cheaper.......
There isn't much time left for kick-starting the economy: Chanda Kochhar
.............. don’t want to guess what the central bank would do. My theory is simpler. While lower interest rates would be an enabling factor for investments to take place and for people to buy more homes or invest more in homes and cars, that alone won’t be enough. It is important now to kick-start the economy through executive decisions to restore confidence in the investment climate. The process of decision-making has to improve for projects that have been either completed or are nearing completion...................
Yes Bank to install ATMs at Kolkata metro stations soon
Yes Bank, India's fourth largest private sector Bank has won the bids to install and operate 19 ATMs across 16 Kolkata Metro stations. The roll-out of the network has been initiated with two locations at Mahanayak Uttam Kumar station and one at Kalighat station already being operational..........
RBI wants banks to install system to alert police
Worried over the rise in crime at banks’ automatic teller machines (ATMs), the Reserve Bank of India (RBI) has asked banks to install remote mechanisms that would automatically trigger alarm at the nearest police stations. This is expected to help the police reach the site of incident without delay...............
Starting today, you need to be doubly careful at an ATM
Going forward you need to be doubly careful while you are at an Automated Teller Machine (ATM). Reason: the Reserve Bank of India (RBI) has asked banks to disable their cash retraction facility at ATMs........
Need cash? Visit nearest police station
JAIPUR: Next time when you urgently need some money, you can visit the nearest police station! This may sound a bit odd as people go to police station when they lose their money and not vice versa. However, various banks, both nationalized and private, have entered into an agreement with the police commissionerate here to install ATMs at police station premises in an effort to curb robberies and thefts.........
RoC: The dog that did not bark when Sahara came in
...... it is little coordination between the three regulators -, RBI, Sebi and RoC. After the RBI ordered Sahara India Financial Corporation to stop taking deposits from the public in 2008, two Sahara companies – SIREC and SHIC – started raising OFCDs by avoiding both RBI and Sebi. This could not have been a mere coincidence. Did the RBI not inform the minister of company affairs and Sebi to warn them against Sahara?...........
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