Rakesh Mohan tipped to be ED at the IMF

Former Deputy Governor of the Reserve Bank of India, Rakesh Mohan, is tipped to join the International Monetary Fund as Executive Director on the board of the International Monetary Fund. He will get a three-year tenure at the Fund. He will replace Dr Arvind Virmani, whose three-year tenure is coming to an end. As an executive director, Dr Mohan will be representing India along with Bangladesh, Bhutan and Sri Lanka on the 24-member Executive Board of the IMF, which is responsible for conducting the day-to-day business of the multilateral financial institution......

Read - BS

Understanding recent policy initiatives - S.S.Tarapore

......With the Consumer Price Index ( CPI) over 10%, on a year- on- year basis, the need for a cautionary monetary policy by the RBI is understandable. The Mid- Quarter Review of September 17, 2012 has reduced the cash reserve ratio ( CRR) from 4.75% to 4.50%, thereby releasing Rs 17,000 crore of liquidity. The policy move seems to be driven more by monetary- fiscal policy co- ordination rather than any need for enhancing liquidity. The RBI would now be under greater pressure to further liberalise policy at the time of the next review on October 30, 2012. The RBI should not liberalise the monetary policy any further unless there is a visible reduction of the fiscal deficit and a significant and enduring reduction in the CPI inflation rate. The RBI will be in an increasingly difficult bind and resisting political economy pressures would be easier said than done given the RBI- Government power equation......

Read - FPJ

Man stabs dad 15 times over cash for booze

Thirty one year-old Atul Jhemse (centre) confessed to killing his father

A 62-year-old former Reserve Bank of India (RBI) employee was stabbed to death by his son on Friday night for denying him Rs 150 for alcohol. Atul, 31, stabbed his sleeping father Sudhir Jhemse (who retired after working as a RBI clerk in the statistical department) 15 times with a pair of scissors at their residence in Mulund (East). Jhemse has been arrested and remanded in police custody............

Read - Hindustan Times

PNB's Kamath to be chairman of Indian Banks' Association

......The management committee chose Kamath to head the body at its meeting, said a senior IBA official. T M Bhasin, CMD of Indian Bank, is inducted as deputy chairman. The other two deputy chairpersons are Bhaskar Sen, CMD, United Bank of India, and Chanda Kochhar, managing director and chief executive of ICICI Bank......

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FDI decision will keep growth story going: RBI officials

Jaipur : ....... The occasion was a  workshop-cum-interface on “Foreign Exchange for you” organised  by the RBI’  Foreign  Exchange Department  here  on Friday. “ Only heavy FDI investment will keep the ‘India growth story’ going,” stated Deepali Pant Joshi, Regional Director, RBI, Jaipur, delivering the keynote address.......

 .......“India is not that vulnerable to economic disturbances as other nations are,” said D.K. Srivastava, Deputy General Manager at RBI Central Office, Mumbai. The day-long event included participation of another DGM from RBI’s Central Office Ajay Vij and other senior officers, besides officers from RBI Foreign Exchange Department, Jaipur, ......

The Hindu : NATIONAL / NEW DELHI : FDI decision will keep growth story going: RBI officials

No change in govt borrowing plan as of now: RBI

Reserve Bank Deputy Governor H R Khan today said there has not been any change in the government borrowing programme for this fiscal as of now.......

Read - Indian Express

Government can help RBI balance objectives

......Monetary policy, till a few days back, was being seen as the sole hope to revive growth in 2013. Of late, the government’s efforts to break the policy stalemate are looking constructive. Such measures, if implemented effectively, can help improve business environment and growth prospects over six-12 months and will eventually offer the RBI better headroom to balance its objectives.

Read - HBL

Banks want NPA norms to be relaxed for housing project loans

......To add to the woes of real estate developers, Reserve Bank of India guidelines does not allow banks to take out that exposure from the NBFC if the project has not been commenced. Now, bankers have requested the finance ministry to take up the matter with the banking regulator so that favourable polices could be framed to boost bank loans to real estate projects.......

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Ministry freezes plan to spin off DMO from RBI

In yet another example of the growing convergence of views between North Block and Mint Road, the finance ministry has decided to freeze the long-pending proposal to have a separate debt management office (DMO). Sources familiar with the developments said following Finance Minister P Chidambaram’s reinduction as the finance minister, the Reserve Bank of India (RBI) wrote to the ministry, reiterating its objection to the proposal and its concerns over a separate DMO. The central bank’s views also had board approval.......

Read - BS

Separating India's twin deficits

......The difficulty of controlling inflation with supply-side measures means monetary policy will have to remain hawkish and contain aggregate demand. The RBI recently said it would “reinforce” the government’s pro-growth policies. That has given rise to expectations that more rate cuts are on their way to supplement a half-percentage-point reduction in April. This is not the time to allow such expectations to take hold. Rate reductions should be part of next year’s policy agenda when the government has demonstrated the success of its resolve to stop the fiscal haemorrhage and after inflation has lost its sting.......

Read - BS

Why banks aren’t cutting loan rates

......Why aren’t the banks lowering their low rates? They cannot do so because their bad assets are growing and they need to set aside more money to take care of that. Besides, they are also setting aside money for the statutory dues of their employees, such as pension and gratuity, which they had not done before. The impact of the combined provision on their balance sheets is quite big. On top of that, if they want to cut their loan rates, their interest income will go down, and that will affect their profitability......

Read - Mint

CRR still serves a purpose

The debate will continue......

......It fulfils an important regulatory function in countries such as India where the Open Market Operations (OMO) that central banks use to check liquidity face some structural rigidities. Central banks rely on CRRs to check inflation by varying money supply. An increase in CRR lowers the multiplier, and, hence, the growth of money supply. The opposite result happens when the CRR is lowered. Banks ought to view the zero interest on CRR balances as a fee paid to the RBI for its supervisory function. Banks alone can mobilise low-cost savings and current account deposits. Mutual funds, NBFCs and insurance companies do not have access to such funds. So, banks are not disadvantageously placed in having to meet CRR obligations......

Read - The Hindu

An artificial paradise

Data on rural wages in different states and occupations released by the Reserve Bank of India (RBI) last week throws interesting light on India’s rural economy. When read together with data on consumption released by the National Sample Survey Office (NSSO) early last month, they confirm many of the trends that have been written about in past years.......

Read - Mint

Efforts for total financial inclusion

Efforts are on to make Ernakulam the first district in the country to achieve meaningful financial inclusion as per RBI norms. RBI Governor D. Subbarao will declare the achievement at a function to be held in the district on November 22, the lead district bank Manager K.R. Jayaprakash, told The Hindu.......

Read - The Hindu

Reforms, RBI give some help to your finances

......With the recent cut in CRR by RBI, there is a strong possibility of banks reducing their lending rates; implying lower EMIs for new borrowers and also for existing ones. Over the last couple of weeks, some banks have already taken the lead to reduce rates – both on loans as well as on deposits. Although the reduction in EMI will be welcome for borrowers, the same may get offset by the lower yield on bank deposits......

Read - BS

Presence of women staff more in South-based banks

......According to Usha Ananthasubramanian, Executive Director of Punjab National Bank, South India has been a forerunner in women’s education. This could be a reason for more women here taking up employment, such as bank jobs, than their counterparts in some of the northern States......

Read - HBL

Window-dressing of deposits by banks: Some truths

......The phenomenon of window-dressing continues despite the RBI’s warnings and suasion. The RBI’s concern is evident from its Business Season Credit Policy, 1995. To quote, “Banks have been repeatedly warned to eschew window-dressing and it is unfortunate that despite strong suasion this warning has been ignored. Banks are cautioned once again against the recurrence of such a phenomenon and I am constrained to say that we may have to evolve certain arrangements, including punitive action, to prevent the recurrence of such a phenomenon.” (Paragraph 5 of the RBI Governor’s letter to SCBs on September 29, 1995 detailing the Busy Season Credit Policy......

Read - HBL

Maharashtra is No. 1 in bank heists in country

......"Police and banks haven't fully availed of scientific developments in security. Once UID and CCTV projects are completed it may be easier to track criminals. Innovations like ATM-type cash chests within banks, linking alarms with other security establishments and police networks, placing sensors in a couple of cash bundles etc can go a long way in curbing bank heists."......

Read - TOI

19% rise in circulation of counterfeit notes: RBI

......Kolkarkar had submitted RTI queries with the RBI demanding number of fake notes recovered under RBI's Nagpur region (Nagpur, Vidarbha and Marathwada). In its reply, the RBI said the number of counterfeit notes detected by banks increased to 5.21 lakh pieces in 2011-12 from 4.35 lakh in the previous year, an increase of approximately 19%. The data shows that maximum counterfeit notes were detected for Rs 500 denomination followed by Rs 100.......

Read - TOI

State Bank of India, Bank of India allowed to operate in Pakistan

......India and Pakistan have agreed to allow two banks each from both the countries to set up branches across the border, governor of the State Bank of Pakistan, Yaseen Anwar said today. "We have held discussions with the Reserve Bank of India and both sides have agreed to issue a full banking licence to two banks of each country,".....

Read - TOI

Customers confused when it comes to new bank accounts

......However, the phenomenon gained real momentum when the Reserve Bank of India (RBI) deregulated interest rates on savings accounts. For the ease of operations and uniformity, RBI further issued guidelines and categorised savings accounts as Basic Savings Bank Deposit Account and value added savings bank deposit account. Whether you simply call it sheer business or the target set by the Government - to have at least one bank account every household - there is a paradigm shift towards the way banks have treated savings bank accounts.......

Read - The Pioneer

Hundreds suffer as ICICI bungles

......Even the Prevention of Money Laundering Act, 2002, says banks have to keep multiple hard and soft copies in a manner as may be specified by the Reserve Bank of India. But ICICI did no such thing. Apart from closing and suspending accounts, the bank lost three-in-one online trading account opening forms of 440,000 customers and account opening forms of 55,000 NRIs, according to information obtained under the Right to Information Act (RTI).......

Read - DNA

Bank ATMs stop sucking in cash after RBI direction

Next time you go to an ATM to withdraw cash, don't worry about the banknotes getting sucked back by the machine if not collected immediately, as RBI has asked all banks to immobilise the 'cash retraction facility'. At the same time, customers will have to be extra careful in collecting the cash dispensed by the ATM, as they cannot later claim the money from the bank, which was the case when this 'cash retraction facility' was in place at the ATMs.......

Read - BS

Nabard wastes Rs. 22 crore, government ignorant

......A Right to information Act (RTI) query in June 2012 revealed that the BCG was given Rs13.2 crore for the process, but the company did not produce any report. In fact, DNA found that Rs13 crore was the initial amount and an additional Rs9 crore was given to BCG later. Dr Bakshi was primarily instrumental in getting the BCG involved. “In exchange of Rs22 crore, Nabard did not get anything. The consultants should come out with reports that become the framework of restructuring,” said Dr KG Karmakar, former Managing Director of Nabard. He had opposed the selection of BCG when he was at the helm of affairs. ......

Read - DNA