 |
| RBI Governor D
Subbarao goes for morning walk in Kochi on Thursday. He was in town to
declare Ernakulam as the first district having ‘meaningful financial
inclusion’ in the country
Our Governor was in Kochi
(Ernakulam) on November 22, to participate in the Dedication Function on
"Meaningful Financial Inclusion" in Ernakulam District. Governor who
arrived Kochi on the previous day stayed in our VOF at Kochi. The next day
early morning he went for walk through the streets of Kochi along with Shri C.
V. George General Manager O-in-C Kochi office. Governor might have thought
nobody would notice him. But the Times of India, captured this rare photo and
published in the front Page on November 23, 2012 in Kerala edition.
Governor during his
inspiring and very interesting speech referred to about this walk and let me
quote from his speech:-
"this morning when i
walked through the streets of Kochi, I came to a junction, where there were a
few migrant labourers. There were labourers from Bengal. Odhisa, Jharkhand and
from as far away as Manipur. There were a few from my home state Andhra, to whom
I could speak in Telugu. I asked one of them how much he earned. He said that
he earned Rs. 550/ per day which I thought was quite impressive. He said that
he send money home sometimes fortnightly. He visited his hometown once in six
months. When I asked him how he sends his money, he said he send it through
ATM. Even the Governor of RBI has not sent the money through the ATM".
Narration of this incident
raised a big laughter from the audience when he said that even the Governor could
not send money through ATM.
- V.Reveendran,
AGM, RPCD, Thiruvananthapuram
|
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.
Monday, November 26, 2012
Walk the talk for fiscal fitness
Parliament nod needed on FEMA rules for implementing FDI: CAIT
....."The FDI notification can be valid and effective only if the amendments made by RBI in rules and regulations of Foreign Exchange Management Act,1999 (FEMA) are approved by "each house" of Parliament which is an inherited provision in Section 48 of the FEMA Act," CAIT Secretary General Praveen Khandelwal said in a statement. ......
RBI to take action if liquidity tightness persists: Dy governor
The present liquidity tightness caused by festival related demand for currencies and rise of government balances, if persists, then the central bank will take action to address the problem, H.R.Khan, Deputy Governor of the Reserve Bank of India said today. However, he expects the tightness to be short lived which is likely to be ease.......
Central bank to simplify KYC norms
The Reserve Bank of India ( RBI ) will soon come up with guidelines to simplify know-your-customer (KYC) norms and to make Aadhaar the proof for address and identification. “In the next few days, we will come up with guidelines on simplification of KYC norms and use of Aadhaar both as an address proof and identification proof,” said RBI Deputy Governor H R Khan , while speaking at Bancon 2012. According to Khan, there are also thoughts on coming up with policy measures on the International Bank Account Number , which will facilitate portability. “We are also trying to marry banks and post offices in an electronic fund management system,” he said. He also stressed on the means by which the payment system could work as a catalyst for financial inclusion. Khan said India was the second largest in terms of cash usage to gross domestic product. He said efforts were being made to make India a “less-cash society”.........
KYC can be non-inclusive
......SHGs need to and do park their surplus and unused savings with bank, and this need to be encouraged with special relaxations especially when these account are opened by women SHGs. This suggests the need for a more gender-sensitive policy, especially while handling women SHG members. Besides this, the RBI should also support some facilitating operational guidelines while handling such sensitive accounts, where the prime intent is facilitating the thrift culture and enabling inclusiveness of these poor communities in the formal system. Taking a cue from the World Bank report, and appreciating the unique individual characteristics and its influence in the financial behaviour of poor households, RBI needs to treat SHG-based savings as a part of its financial inclusion drive.
From Aadhaar to mobile banking, strategies for India's war on cash take shape
.....What sets apart the *99# initiative from other mobile telephony services presently offered is that the *99# connectivity is under the Unstructured Supplementary Service Data (USSD) platform where each dial-in results in a live connection with the banks server. This is similar to the system used in pre-paid phones to check balances and numerical literacy would be enough to operate the account. Also since it is not based on SMS or GPRS connectivity and there is no charge on the user. The government is pushing mobile banking also because it will provide those in remote areas an opportunity to access their Aadhaar accounts even if banks are not around nearby. The service is the first time banks and telecoms have come together at industry level is the brainchild of the National Payment Corporation of India (NPCI). According to AP Hota, MD & CEO, NPCI the new service best suits India as it is simple and secure as no information is stored in the mobile device. " Ninety percent of phones used in the country are GSM phones and this service works on all GSM phones irrespective of handset make, cost, operating system or even the telecom service provider" said Hota......
RBI to soon allow Aadhaar for banking transactions
The central bank is likely to issue a circular on this within a week, says Deputy Governor H.R. Khan
....The central bank will soon issue a circular allowing the use of the Aadhaar as KYC, one of its Deputy Governors, H.R.Khan, said on the sidelines of Bancon, the annual bankers’ conference in Pune. Currently, then Aadhaar card carries a disclaimer that it cannot be used as an identity to conduct banking transactions. “KYC norms will be further relaxed soon to allow the use of any one document, which has both address and identity proofs. We will allow the Aadhaar card to be used as proof of identity,” Khan said. The central bank is likely to issue a circular in this regard within a week, Khan said......
Thackeray's shadow
Bal Thackeray ’s death appears to have disproved the common notion that the Shiv Sena no longer wields much influence over workers’ unions in Mumbai. The walls outside the offices of the Reserve Bank of India and the Mint had prominent boards put up by the unions of both institutions carrying obituaries of the Sena leader.
BS
Where caution is welcome
.....Although not spelt out, RBI’s caution is basically confined to the entry of industrial houses into banking. The structure of Indian banking so far, industrial houses do not directly own a bank — although in many cases they have sizable shareholding in individual banks — has a lot in its favour. Through a variety of regulatory rules, the RBI has ensured that no individual group, irrespective of its shareholding, can control a bank. The situation will change radically if large business houses get a direct foothold. For them, banking will not be the core or even the main business. No matter what safeguards are put in place, it will be a herculean task for the government and the RBI to keep a watch over the infringement of rules. Inter-connected shareholding will stress regulators, and is not a desirable outcome of reform. That is why the RBI wants more powers to check possible shenanigans.......
A case for paying interest on CRR balances
.....In the current situation, if 8-9 per cent interest is paid on the balance kept with the RBI, banks will most likely rush to keep funds with central bank and that will reduce the liquidity in the system. It may be noted that banks maintain 6-7 percentage points more SLR than the required 23 per cent when the risk-free return on SLR securities is 8-9 per cent. Therefore, it can be safely assumed that if 8-9 per cent interest is paid liquidity will automatically flow from the system to the RBI. The liquidity impounded will be 10-12 times the interest paid. Similarly, when the system requires more liquidity, the interest paid on the balances kept with RBI may be reduced which will compel the banks to draw the funds from their accounts with the RBI and use for advances or investment......
A reduction of 10-15 bps in interest rate is possible: D Sarkar
What is your outlook on interest rates for your bank and the banking sector as a whole?
Interest rates may soften a bit and everybody is talking about it. RBI had said it may do something in the last quarter. So, there is a possibility to bring down the rates.............
Food subsidy is of paramount importance: Rangarajan
.....The former RBI governor said taming inflation by the right balance of monetary and fiscal policies was also important at the moment and the government was tackling the issue with extreme seriousness. Rangarajan said rating agencies should take note of the various measures being taken by the government......
PSBs sore over FM push for IBA chief from pvt banks
While prodding the private sector lenders to be more active in BANCON – the annual banking conclave – finance minister P Chidambaram also suggested of making future chairpersons of Indian Banks’ Association from private sector banks. Typically, the IBA chairman is selected from public sector banks as they have majority in the bank body, in terms of voting power........
Banking consolidation is inevitable: FM
Finance Minister P Chidambaram today revived the debate on amalgamation of public sector banks saying some consolidation is inevitable as Indian banks would vie for the top slot in the global banking system in the next few years. He also advised banks to be different from each other and assured the finance ministry would not attempt to impose any uniformity................
Banking on short takes
.....Tamal Bandyopadhyay, who has emerged as an acute observer of the Indian banking scene, has managed to dispel both these reservations in this unfussy book. He has converted journalistic weakness into strength and told the story of the HDFC bank in a manner that only a truly accomplished reporter can — in fascinating, rather than mindless, detail.........BANCON 2012: FM nudges RBI on banking licences again
........."Let me emphasise that the three powers that RBI wants are already there with the RBI. It is already there in the regulation, it is there in the powers to grant the banking licences," he said. "I am sure the RBI acknowledges and appreciates the well-considered position of the Government and will take the process forward," he told reporters after inaugurating the two -day annual national banking summit (Bancon 2012) ......
RBI must allow new banks, says FM
In a stern message to the Reserve Bank of India ( RBI) on the contentious topic of issuing new bank licences, Finance Minister P Chidambaram made it clear that RBI has the powers to issue new licences and expressed the hope it will take the process forward " appreciating" government's position. " Whatever powers, whatever authority there was in 1993, remains on the law books today. In fact there are more power and authority now in place." He was speaking at the launch of a book ' A Bank for the Buck' on the history of HDFC Bank by financial journalist Tamal Bandyopadhyay in Mumbai on Saturday. " I am keen that there should be more banks. That is the policy of this government. The policy was announced by my predecessor in his budget speech in a year and half ago. This government's intention is to urge the RBI to quickly finalise the guidelines." His remarks assume significance in view of the reluctance of RBI to move ahead with the policy of granting new bank licences in the absence of changes in the Banking Regulation Act, which is awaiting approval of the Parliament.........
'India must have world size banks'
...."We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," .........
Read - FE
India's banking sector has changed a lot, set to change further: KPMG
.....With increasing volume and complexity of the banking business, it will be imperative for the regulator to move gradually towards more offsite monitoring than onsite. Technology will play a much larger role in the overall supervision of the banking system. There are likely to be transformational changes in the entire regulatory system for financial services.........
Nagpur Municipal Corporation general body to end RBI sq naming row
NAGPUR: The Nagpur Municipal Corporation (NMC) general body is likely to put an end to the ongoing controversy over RBI square's name. The naming committee headed by deputy mayor Sandip Jadhav has agreed to name RBI square as Samvidhan square and the stretch of road from Akashwani square to Ladies Club after former chief minister Vilasrao Deshmukh. The general body will take a final decision on the committee's resolution..........
10- rupee note to be collector’s item, so preserve it!
Stock up the 10- rupee currency notes as they are to become a collector’s item, though only in the distant future as the Reserve Bank of India ( RBI) has decided to gradually replace them with coins that last much longer than the paper currency and hence cost- effective. Minister of State for Finance Namo Narain Meena disclosed this in the Lok Sabha on Friday, saying the currency notes have a life span of “ just eight to nine months” and hence RBI plans to gradually replace them with coins. He, however, declined to set a deadline for the end of the 10- rupee notes era, pointing out that speed of the replacement depends on the capacity of the mints to supply the coins..........
Co-opting the consumer with positive banking
.....Most bankers’ lives are monotonous and they have stopped thinking and learning. They get up early, travel to work in the morning, go home tired and return to the same routine the next day. Bankers should start their day with a positive attitude saying “How can I be a better banker”. This will change the dull faces of boring bankers and they will start trying to do their jobs better........
Better days ahead
.....“The new banks will be at a disadvantage to existing banks due to absence of an existing client base and the requirement for new banks to ensure 25 per cent of branches in unbanked areas from the outset. For existing banks, the requirement is for only new branch additions. Therefore, they continue to have a large proportion of branches in high business opportunity areas. Also, creating a strong CASA franchise is far from easy, as Yes Bank can testify after struggling to create a meaningful CASA franchise over eight years. This is not to deny that a banking licence would be a positive, but merely stressing that they come with complications. So valuations can’t go out of the window on such expectations,” ..........
No RBI role, Rupee to recoup on its own
......Mayaram hoped the currency will appreciate once the economy is back on an upward curve without any effective intervention by the RBI. "I don't think RBI would have to effectively intervene for strengthening the rupee. We believe, once the slowdown bottoms out, the rupee will strengthen"......
Read - Express India
Two-thirds of bank deposits have no insurance cover
.....The falling insurance cover is due to the rising proportion of high-value deposits. Bank depositors enjoy insurance cover on deposits up to Rs 1 lakh. This means that if a bank goes belly up, each account will still recover up to Rs 1 lakh from the Corporation.Some experts feel that the situation calls for a revision in the insurance cover offered. The insurance limit of Rs 1 lakh per account was set way back in 1993. With inflation averaging 6.5 per cent in the last two decades, a Rs 1 lakh deposit then would equal Rs 3.3 lakh at today’s prices. Bankers, however, counter that this may not pose much of a risk to small investors, as most are likely to have deposits of less than Rs 1 lakh. In fact, banks have deposit accounts (savings and time deposits) numbering 107 crore. Of these, 99.6 crore deposit accounts, or 93 per cent, have less than Rs 1 lakh as balance.........
Govt panel suggests consumer campaign against ponzi schemes
A government panel has suggested running a public campaign under the
flagship consumer awareness programme 'Jago Grahak Jago' to guard the
gullible investors against multi-level marketing (MLM) and pyramid
structure companies collecting money through ponzi schemes. The
recommendation has been made by the inter-ministerial committee, headed
by Consumer Affairs Secretary and comprising of members from Reserve
Bank of India, Finance Ministry, Corporate Affairs Ministry and Law
Ministry among others,.......
Centre open to Islamic banking, says Rahman
......Sources said that by asking for amendments, the RBI wants to put the ball in the government's court on the issue. The government and the RBI do not appear to be on the same page on the matter. Asked if the RBI was not cooperating with the government, Khan said, "I have not dealt with them so far. I will talk to them on the issue." The government, on its part, has been pushing for the introduction of Islamic banking for quite some time. The then Union Law Minister Salman Khurshid had written to the Planning Commission and the RBI to look into the issue. The National Commission for Minorities had a meeting in May this year to discuss the issue, which was attended by finance ministry officials.......
Gold-backed instruments can bring down gold imports: Gokarn
....“Essentially role of innovation is not denying people to invest in gold, but find ways to give them gold like qualities (through new instruments). That might give some solution to the larger scale (gold) imports” Gokarn said while speaking at Bancon conference in Pune..........
RBI considering four alternatives to gold
......Given Indians’ yen for gold and the pressure on the current account due to its import, the Reserve Bank of India is considering introducing four gold-related instruments to ease the physical demand for the yellow metal. The instruments are modified gold-deposit scheme (GDS), gold-linked account, gold-accumulation plan, and gold-pension plan, said RBI Deputy Governor Subir Gokarn at the Bankers Conference in Pune.......
Steps to discourage gold imports on cards
Concerned with the drastic depreciation in the Indian rupee against the greenback raising alarm bell for decision makers, the Standing Committee of the Reserve Bank of India (RBI) on gold is meeting on Monday to take immediate measures to discourage import of yellow metal. Gold is seen as unproductive asset causing monitory management issues.........
Banks want RBI to allow gold buyback
Banks have asked the Reserve Bank of India to allow them to buyback gold which is not allowed at present, though banks are allowed to sell gold coins. In an interaction with Subir Gokarn deputy governor, RBI, at the annual banking conclave BANCON, State Bank of India’s chairman Pratip Chaudhuri suggested such a move which will in turn will improve market liquidity. “Today all the banks are selling gold but RBI does not allow to buyback their own gold. Suppose somebody has taken gold from my bank and the same gold, without opening the seal, comes back, banks are not allowed to buyback. What would be the underlying thoughts as it is impeding the liquidity of gold holdings,” Chaudhuri asked the regulator in an interaction which followed by a speech by Gokarn on the country’s gold import problem...........
Bank told to pay 42 thousand to man whose account was hacked
......The commission took into consideration the RBI guidelines which state that it is the bank's liability to the customers on account of unauthorized transfer through hacking, denial of service on account of technological failure, etc needs to be assessed and banks providing internet banking should insure themselves against such risk. "The appellant (bank) has not explained whether they have acted in accordance with these guidelines. The deficiency in service on the part of the appellant is proved beyond doubts," the commission said. .....
Vijayalakshmi Iyer takes charge of Bank of India
The government has on Monday appointed Vijayalakshmi Iyer as the chairperson and managing director of Mumbai-based Bank of India. Iyer — who was an Executive Director of Central Bank of India prior to this appointment — will serve Bank of India till May 31, 2015........
Piercing the veil on foreign offices
....While, it may seem strange at first glance that the RBI is looking into matters related to immigration compliance, the reason for it seems to be national security. This is in line with the recent trend of Government authorities cross-verifying whether foreign nationals are complying with regulations in the jurisdiction of other agencies.......
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