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| Over to you, Dr Subbarao................. |
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, December 11, 2012
Memo to RBI: Only shock therapy will work from now on
Who wants to be the RBI Guv?
IE
Hair raising........
Reserve Bank of India Deputy Governor Subir Gokarn’s rather distinctive hairstyle has attracted attention in the past, with at least one person mistaking him for a spiritual guru. He good-naturedly bore some more gentle ribbing on the subject last week, this time from R Ramakrishnan, CEO of Polycab Wires, who was speaking at an event at which Gokarn was chief guest. Ramakrishnan presented Gokarn with a book authored and published by him titled My African Odyssey – A photo journey to Kenya and Tanzania. The cover bore a picture of a lion with a wind-tossed mane. As he handed him the book, he looked askance at Gokarn’s wife Jyotsna Bapat and said the next time Gokarn had a bad hair day, she could remember this book because he would look just like that lion on the cover.
BS
Existing laws don’t allow interest on CRR: Chakrabarty
......Explaining the rationale behind the regulatory mandate, the Deputy Governor, who looks after banking supervision, apart from a host of other departments at the central bank, said the CRR is charged on banks because only they can create money. “Who creates money?...It’s only bank deposits that too chequeable deposits or demand deposits that create money. That’s why CRR is imposed only on banks...if a bank gives money to NBFCs, it will go not to NBFC but to some bank accounts (of NBFCs),” Chakrabarty, who recently got a two-year extension, said........
Deciphering the Euro Zone crisis - V. K. SHARMA
Edited excerpts of the keynote address delivered by V. K. Sharma, Executive Director, RBI, on November 30, at the International Leadership Symposium organised by World Forum for Ethics in Business in partnership with World Bank Institute at European Parliament, Brussels. Belgium.
.....in sustainable globalisation, there can be both winners, and losers, only in the short term, for such is the nature of sustainable globalisation that, in the long term, there can only be all winners and no losers. Therefore, if we earn and share, we prosper together, and if we don’t, we perish together.......
Read - HBL
No info on flaws in Samagra Gramin Vikas Yojana: RBI
The Reserve Bank of India (RBI) has no information on irregularities, if any, in its Samagra Gramin Vikas Yojna being implemented in 115 villages across the country, as per its reply to an RTI query by rights activist Radhakanta Tripathy. The main purpose of the scheme is financial inclusion, financial literacy, maximising relationships, extending community outreach and reiterate to the banks and other financial service providers and local authorities of the significance and seriousness that the RBI attaches to provision of financial services and financial education, the RBI has said. It said that visits by its top management have been undertaken in 2009 as an initiative for rural development in the platinum jubilee celebrations of the RBI. Replying to a query as to whether performance appraisal had been carried out annually on the development of the villages adopted so far, the RBI said that the performance of these villages is monitored with a quarterly report.............
Financial Inclusion by Central Bank of India in E. Godavari dist
......In the ultra small branch, people could open accounts with zero balance. According to the RBI's directives, the transaction would be conducted through the branch, said Mr. Tanksale. East Godavari district had been chosen as one of the 51 districts in the country for carrying out cash transfer scheme of the Union Government from January..........
RBI’s big challenge is to deepen financial inclusion: Gokarn
The monetary and financial policies of the Reserve Bank of India must be guided towards financial literacy, said RBI Deputy Governor Subir Gokarn on Monday. Addressing an outreach programme conducted at Mudageri village in Karwar taluk by the RBI on Monday, Dr. Gokarn said the programme was to create financial awareness among rural masses. It was the 11th programme in the series in the State. The Deputy Governor said he was privileged to hail from Uttara Kannada district and thanked the people for allowing him to participate in a programme which envisaged financial inclusion of rural masses........
......Uma Shankar, Regional Director of the RBI, said the programme aimed at inculcating the habit of saving money among teenagers. The RBI had chalked out many programmes to encourage talent among students. She said that women’s self-help groups were funded by banks to create financial independence and they should avail the benefit. ......
Economically speaking
Sarla Anil Modi School of Economics, a constituent school of NMIMS, deemed-to-be-university organised its annual Economics Conclave last week, where RBI Deputy Governor, Dr Subir Gokarn, addressed the audience. The theme of the conclave was ‘Indian Economy – Navigating Choppy Waters’. It saw participation from students who got an insight on the Indian economy and the challenges it faces. The key note address delivered by Dr Gokarn was about managing inflation and the challenges for the Indian Central Bank........
Banking on general managers
Not just investment scare which is holding up sanction of loans in public sector banks, this is the time when General Managers become Executive Directors and from there to CMDs. The last thing anyone wants at this stage is a loan application going bust. So all high value credit applications will remain pending till the appointment orders come through this month.
IE
IE
Reserve Bank of India simplifies account opening norm
...."If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her in the account opening form, the document may be accepted as a valid proof of both identity and address." The banking regulator said in a notification issued to banks on Monday. The RBI has also clarified that since introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank's extant KYC instructions, banks should not insist on introduction for opening bank accounts of customers......
Urban cooperative banks have maximum potential to reach out to common people: Malvika Patel
PUNE: Urban cooperative banks have the maximum potential to reach out to the common people, said General Manager of the urban cooperative department of the Reserve Bank of India, Malvika Patel. Speaking at the inaugural session of a training programme organised jointly by 'Galaxy Consultancy' and 'Banko Diary', Patel said that the number of private and commercial banks in the country is increasing but urban cooperative banks have the maximum potential to serve the common people. The training programme was held for officers and directors of the cooperative banks about the modern processes, technological developments and rules. ...........
Co-op bank staff body holds protest to press for demands
....Developing co-operative consciousness among the various stakeholders of cooperative banking structure; exempting smaller co-operative banks from the income tax net; capital infusion in weaker co-operative banks and closer co-ordination between Reserve Bank of India and Government Registrar of Co-operative Societies are some of the key demands of the Federation......
Make MFI interest rates consistent with repayment capacity: C Rangarajan
....."Fix interest rates in a manner in which it is consistent with the repaying capacity of the borrowers. Now, fixing the interest rate independent of the repaying capacity of the borrower is asking for disaster. "I think that's where things went wrong," Rangarajan said during a programme in Centre for Economic and Social Studies. ......
Finance Ministry pushes RBI to give infrastructure status to housing sector & ease provisioning norms
NEW DELHI: The finance ministry has asked the Reserve Bank to consider giving infrastructure status to the housing sector, and relax provisioning norms for it so banks can extend attractive loans to buyers. RBI has mandated that banks set aside from their profits an amount equal to 1% of total standard assets in commercial real estate, which also includes housing projects. This means if a bank lends 100 towards a commercial real estate project, it will have to keep aside 1 to offset any loan to the sector turning bad. The provisioning rises to 15% of net investment in case of secured sub-standard asset. A finance ministry official confirmed the government has asked RBI to look at all possible options to provide an impetus to the housing sector...........
Traffic diversions jam major roads
BHUBANESWAR: Commuters in the city had a harrowing time negotiating traffic diversions following the stir by Gana Sikhyaks at Lower PMG Square here on Monday. The vehicles remained stranded for nearly two hours at the intersection with not a single traffic cop in sight. Most vehicles turned off the engine near the Reserve Bank of India after being diverted from the Lower PMG. The commuters had to take a detour from the back side of the bank negotiating traffic coming from the opposite direction. .......
Banking Bill hits Opposition wall, stalls on procedural issue
A determined Opposition on Monday thwarted the Banking Laws (amendment) Bill 2012 in the Lok Sabha, raising doubts about its being passed in the coming days. This Bill was listed for consideration and passage in the Lower House on Monday. Monday was, however, a mixed day for banking reforms, with Finance Minister P. Chidambaram succeeding in getting a Bill on debt recovery passed by the Lok Sabha. The Bill (recovery of debts) was passed after the entire Opposition staged a walkout over it not having been referred to the Standing Committee. On the Banking Laws (amendment) Bill, senior Bharatiya Janata Party leader Yashwant Sinha demanded that three new provisions sought to be introduced by Chidambaram be first referred to the Standing Committee on Finance......
India’s growth story: A comparative view
As GDP growth slows and industrial performance worsens, the government is hard put to find explanations. Part of the blame has been conveniently placed at the door of the central bank, with fingers pointed at the Reserve Bank of India’s reluctance to cut interest rates that were raised to combat inflation. But the more fundamental explanations being offered are the poor performance of the global economy and the difficulty of pushing ahead with more “reform” in India’s divided polity. Since little can be done about the former, the Congress Party’s economic policy agenda has been focused on accelerating reform at all costs, with special attention on policies that favour foreign capital..............
Need 2% rate cute by RBI for growth to come back on track: Nandan Chakraborty, Axis Capita
....Well, it is a mix of everything. If it is left only to the RBI to revive growth, they would not be able to do it at all. Historical trends indicate that you need at least 2% cut in the interest rates to be able to revive growth back to trend line. On the other hand, if you do that, then the inflation shoots up........
RBI unlikely to cut rates on Dec 18: Report
.....Over the past three months, the Reserve Bank has reduced the cash reserve ratio, the portion of deposits banks are required to keep with RBI, by 0.50 per cent to 8 per cent. But these cuts did not lead to an easing of overnight rates. Though the RBI has finally decided to resume open market operations (OMOs) to ease liquidity, BofA ML said that “Governor Subbarao may not want to take chances with the RBI’s inflation fighting image by cutting rates at 7.5 per cent inflation.” India is the only BRIC where lending rates are almost at their 2008 peak, the report said......
Do RBI rate cuts really matter to the common man?
......So let us stop making fuss of the credit policy or its supposed failings. It’s time now that RBI needs to improve on making the formal source of credit available to common people easily. The Reserve bank should now make the most of the opportunity offered by Aadhaar-based cash transfers so as to enable a full-fledged mobile banking across the country. Also they need to implement new licenses between the banks and the phone companies so that the method of formal finance reaches any and every body across the Indian Territory. Not only this, RBI should take steps so as to make policy rates more relevant to more people.
Read.......
To control inflation, use structural reform
.......Assorted blunders add to the chaos, eg, judicial rulings that contravene the sanctity of contracts, and misguided institutional action, like the Reserve Bank of India (RBI) trying to force the government towards fiscal responsibility instead of concentrating on providing stability and support for growth. This is aggravated by a government that does not seem to act in the public interest, and a frustrated Opposition that stalls governance and parliamentary proceedings............
FAPCCI seeks drastic cut in interest rates
....The Federation of Andhra Pradesh Chambers of Commerce & Industry has urged the Reserve Bank of India for a higher percentage of interest rate reduction to boost industrial production. “Given the current industrial and economic scenario, there is an urgent need for the RBI to reduce interest rates not by a token of 25 or 50 basis points, but by 200 basis points,” the trade body said in a letter to the RBI Governor......
The wages of growth in India
.....The question is: which set of numbers is correct? This is not merely an academic question but has important implications for policy decisions. In recent months, GDP numbers have been stealthily revised down, RBI has expressed reservations about the industrial production data and now the data on wages, too, is cause for confusion. It’s high time for a complete overhaul of our macroeconomic data collection systems. Is the Indian economy experiencing a wage depression?
Why India’s gold fever isn’t easily cured?
..Moving a step further, in October, the RBI barred banks from financing the purchase of gold in any form other than working capital finance. RBI is only “trying to cure the symptoms rather than the problem,” said Rajeev Malik, senior economist, CLSA Singapore. “There are several drivers of India’s demand for gold, including a convenient store for unaccounted wealth, use as an inflation hedge and rising demand for investment in gold,” Malik said. “The push towards unlocking of this vast reservoir of gold savings is a welcome step and could be marginally effective.”.........
Inflation, not gold, is problem
........Finally, gold has maintained value against inflation. In the last five years, as inflation climbed higher, fixed deposits or small savings schemes have not kept up, earning investors a negative real return. Equities, which are supposed to beat inflation, have proved a disappointment, too. To some extent, gold demand will dampen as the economy starts picking up, as investment opportunities open up and as inflation falls to reasonable levels. But there is bit of chicken and egg here: strong gold demand weakens rupee, weak rupee pushes up inflation which then causes another rush for gold.........
Robbed by cyber criminals, Kandivli man to approach telecom authority
.....Cyber lawyer Pankaj Bafna said, “Landing of bank correspondence in wrong hands could prove to be dangerous.” The Reserve Bank of India (RBI) has made sending of the know your customer (KYC) forms mandatory since April. “A person may have shifted his residence, but does not inform the bank about it. Hence, the KYC forms are sent every three years so that the customers can update their details. This could ensure that sensitive data does not land in wrong hands.” Experts advise caution while uploading details of your e-mail account on a networking site.....
Public cash holdings rise by Rs 44,000 cr
.....With at least five states headed for the elections beginning with Gujarat on Thursday, currency with the public jumped by Rs 44,000 crore in a single fortnight. Currency with the public according to the RBI data amounted to Rs 11,08,120 crore for the fortnight ended November 16. Currency with the public represents cash holdings with the public......
Electronic transactions rise 30 per cent till October: RBI
....The banks, especially the foreign banks operating in the country, have started aggressive marketing of credit cards even outside the banks’ customer base. The practice was followed by banks before the crisis year of 2008 and was stopped thereafter.
Banks See New Charge in M-Banking
....In a
country like India, where there are only 90,000 bank branches and
banking services reach only about 40% of the population, the need to
open more branches is compelling. Mobile banking, backed by a robust
banking-correspondent architecture, overrides the need to set up more
branches. “Mobile banking will help lot of customers who are financially
excluded,” says Sabharwal. It also works for banks because a physical
bank is expensive......
FinMin: Use e-payment route to beat disruptions at branches
....The Finance Ministry, it appears, wants to make sure that calamity, strike or other disruptions at banks/branches don’t disrupt revenue collections. The Ministry has asked members of the public to use alternative channels such as ATMs, Internet, and other electronic means to pay tax and other statutory dues in case of any service disruptions at the bank/branch in handling government business.......
Union Bank launches Xperience branch in Kolkata
....Union Xperience branches are a part of the bank’s initiative towards bringing superior customer experience for its customers. The bank has introduced automation through self service machines like pass book printers, cheque deposit machines and queue management among others and also completely revamped the sales and service model in these branches, said a bank press statement. The bank also launched its green banking service at the branch,.....
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