Reserve Bank Governor, D Subbrao said that separate legislation should be enacted in order to commence Islamic Banking in India. Talking to media persons here today he said under the present banking laws, Islamic banking could not be permitted in India. "There should be separate legislation for the purpose. The Kerala government had proposed to permit Islamic banking as the inward remittance is the highest here. Reserve Bank is not against the idea, but we can work only under the present legal frame work of the country," he added......
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.
Friday, November 23, 2012
It is another first for Ernakulam
.....Mr. Subbarao said Ernakulam enjoyed many firsts. Earlier, it had achieved 100 per cent coverage under family planning and cent per cent literacy. While the average population for setting up a bank branch in the country was 13,000, it was 7,000 in the case of Kerala. In the case of Ernakulam district, the population factor got further reduced to 4,400. The feat of meaningful financial inclusion was achieved under a target-driven programme, he said. The idea is that people must utilise it to save money, to get credit, micro insurance and other products. The State had already been listed as having achieved total banking coverage in September 2011, which indicated the widespread presence of branches or alternative facilities such as services of business correspondents. The district has about 850 branches of 43 banks and about 1,000 ATMs ......UBI’s financial inclusion feat in Ernakulam
....The objectives of Meaningful Financial Inclusion is to empower people to help them in achieving financial progress. Dr. D Subbarao, Governor, RBI, said that the efforts of banks in Ernakulam are commendable.......
‘Tight monetary policy among other things impacting growth’
Attributing the economic slowdown to various factors, including Reserve Bank’s tight monetary policy, the government today said that it has been taking steps to promote investment and growth..........
Reserve Bank gives infra lending status to host of sub-sectors
In a boost to key segments like roads and bridges, telecom towers and three-star hotels, RBI today gave ‘infrastructure status’ to a clutch of sub-sectors paving a way for them to avail easier funding. In a notification, RBI said the credit facility extended by lenders (banks and select financial institutions) to a borrower in about 30 odd sub-segment of the infrastructure sector will qualify as “infrastructure lending”.....
Make RBI whim-free
......Statutory bodies should not be made subservient to the whims of ministry officials. RBI has faced problems on issues relating to banks earlier, owing to blurred clarity in powers and interpretation of law. Even today, a ten-year-old pension updation issue is shuttling between RBI and the finance ministry.
Succession plans
This refers to the report “Gokarn to continue as RBI Deputy Governor till December 31”. When will we learn to implement succession plans for top government/public sector jobs in a graceful manner? We all talk highly about the virtues of the private sector, but do we really allow the public sector to imbibe its good features? How else can one explain the difference between the selection procedures of successors for Ratan Tata and N. R. Narayana Murthy and those for identifying CEOs and top managers of public sector organisations? Another point is that it will be next to impossible to attract talent to these government positions, given the meagre remuneration offered. It suits an unstable government to have ‘yours obediently’ people who have no other place to go or those who find the postings as a stepping stone for career opportunities abroad. Not much research is needed to know why it tries to ease out people like D. Subbarao, S. Gokarn and Vinod Rai.
- M. G. Warrier, Mumbai (HBL)
Govt, RBI should take more initiatives to revive growth: Assocham
....."While the Finance Ministry has taken some encouraging steps to revive the investment sentiment, the efforts have to be supplemented by the RBI and different wings of the government," industry body Assocham said in a study..........
Nineteen rural banks merged into eight 71 left
The government seems to be preparing the ground for the merger of public sector banks (PSBs). After asking small banks to coordinate with large ones on key areas, it has now merged 19 regional rural banks (RRBs) into eight entities, despite reservations by the Reserve Bank of India (RBI). It plans to merge more rural banks by the end of this financial year. RBI has expressed its displeasure at the move, saying the finance ministry didn’t keep it in the loop while going ahead with the mergers. The ministry, however, argued it followed the Regional Rural Banks Act, which didn’t mandate consultation with the central bank on such mergers.........
Easy option for RBI
Government (Financial Services Sector Ministry) is reported to be now writing to the Nominee Directors of banks ( this would include Nominee directors from RBI) with a copy to the Chairmen of banks to ensure that their directives are carried out by the banks since RBI had objected to such directives issued to banks as micromanaging the banks. RBI have been pressing the Government for a long time to remove their nominees from public sector banks as there is a conflict of interest because of its regulatory function over banks. Government had not agreed to the request but found a solution by asking RBI to nominate their retired executives to the boards of banks. This practice was introduced but has since been given up. The latest directive from the Government would place the nominee directors from RBI on the horns of a dilemma- whether they have to follow the RBI directives or the ones from the Government especially when the directives from the Government are not in accordance with the RBI stand. In the circumstances, RBI would either have to firmly insist on their representatives being removed form the boards or instruct their officers to follow the RBI stand. The former seems to be an easier option.
A.Chandramouliswaran (via e-mail)
A heady decoction
.....“Why a bank executive sells you insurance or puts a retired person’s savings into mutual fund, which could prove disastrous? There are 100 articles about it but if you are told in what is the motivation of the person and what are the long term consequences of it, it creates an impact. It is fiction with a purpose. I was pleasantly surprised when a senior RBI official in his address to bankers asked how many of them had read The Incredible Banker. Can they take solace from the fact that what Ravi says is fiction or can it happen in real life?” Having said that, Ravi finds Indian banking more stable than global banking. “It is largely because our regulators are stronger and are not swayed by commercial interests.”......
As banks get busy replacing the cheques, people have a tough time
Come 01 January, 2013 and your all existing bank cheques will become invalid. The reason being that the banking regulator, Reserve Bank of India (RBI) has implemented cheque truncation system (CTS) effective from 01 October and hence it has asked all the banks to replace the existing bank cheques, which have already been issued by them to their customers, to new standard cheques that comply the new system. The new generation private sector banks have already complied with the RBI norm. However, the same was not the case with the state-owned banks and hence the rush among them to inform their customers through notices which have been pasted at branches and ATM kiosks........
The sources of growth
Not for a decade has growth in gross domestic product been as low as it is likely to be this financial year. Finance MinisterP Chidambaram now says that it may be in the 5.5-6.0 per cent range; the Reserve Bank’s figure is midway, at 5.7 per cent. More worryingly, while the slowdown has been caused very substantially by a shortfall in investment , there seem to be few sources of recovery on this front. As a series of reports in this newspaper over the last week has shown, the much-needed rebound of investment cannot be financed by big private sector firms, because many of them are heavily laden with debt and in no shape to undertake fresh investment.......
Soiled Currency Menace
Melas for fighting the soiled notes (currency including) fail to yield
satisfactory results, despite RBI's claim of providing enough currency
for circulation in the market........
Branch banking unlikely to go out of fashion in India
.....Banking is also changing due to the efforts of the Reserve Bank of India (RBI) to inculcate the habit of paperless payments through credit and debit cards, electronic fund transfers and mobile banking. While cheque is still the dominant mode of payment, the value of such transactions has been on a gradual decline between 2007/08 and 2011/12. Paper-based payments accounted for 52.4 per cent of non-cash transactions in terms of volume, but only 8.4 per cent in terms of value.......
RBI to issue Rs 500, Rs 10 banknotes with rupee symbol soon
....."The Reserve Bank of India will shortly issue Rs 500 denomination banknotes with rupee symbol on the obverse and the reverse, inset letter 'E' in both the numbering panels,"......
Click, and your taxes are paid from home
KOLKATA: Imagine paying all your taxes - from stamp duties to motor vehicle tax - through netbanking or a debit card from the comfort of your home or at the nearest bank counter. It could well be a reality next year. This is the final piece in an ambitious proposal by the Mamata Banerjee government to replace the fault-ridden online payment system introduced by the Left Front regime in April 2008 with a single-window, seamless interface between public and private banks, the 'e-Treasury' and the RBI.........
Dhanlaxmi appoints new auditor, says not up for sale
Old generation private-sector lender Dhanlaxmi Bank Ltd has appointed a new auditor after the controversial exit of its previous auditor even as the market is abuzz with speculation about a likely merger of the Thrissur-based bank with a large new private bank. Hyderabad-based Sagar and Associates is the new auditor. The Reserve Bank of India (RBI) approved the appointment of the new auditor after rejecting the names of three audit firms submitted by the lender........
Lakshmi Vilas Bank CEO & MD Somasundaram resigns
......In 2010-11 AFI report, RBI observed that the chairman's post remains vacant since January 2011 following which the bank recommended the name of a director, K R Pradeep, with shareholding of 4.99% for the post. RBI, however, advised the bank to suggest two more names. Very recent, sources say that LVB has recommend other two names for the post and the RBI had to get back to the bank.......
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