RBI governor, Dr D. Subbarao, is the latest ‘medium’ and ‘victim’ in a major online scam where the gullible gets hooked by an offer of $500,000. The mail, clearly meant to cheat the recipient by using the photograph of the RBI governor to make it look authentic, claims that Dr Subbarao has asked to release all unclaimed fund after a meeting with UN secretary general Ban Ki-moon and senate committee on finance, RBI, on November 18 this year............
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Thursday, December 13, 2012
Know your documents
A rare error in a Reserve Bank of India (RBI) notification has caused minor confusion among bankers. In order to relax Know Your Customer norms for opening bank accounts, an RBI-issued notification had said a customer need not furnish a separate proof of address if the identity document carries the same address. Giving examples of such documents, RBI listed driving licence and passport. It also added PAN (permanent account number) card to this list. Now, it’s well-known that a PAN card carries only an individual’s permanent account number, name, father or husband’s name, date of birth and a photograph, but never the address.
BS
5 banks launch Aadhaar-linked bank account
Five banks, including SBI, ICICI Bank and Axis Bank, today launched Saral Money bank account product which allows customers to open an account using Aadhaar card as address as well as identity proof. The RBI has recently directed banks to accept Aadhaar letter as the proof of both identity and address if the address provided by the account holder is the same as that on the Aadhaar card. “Through a product like Aadhaar-enabled KYC (Know Your Customer), we are bringing down the cost of account and that makes a product lot more attractive. And it will definitely further the cause of financial inclusion,” Axis Bank Managing Director and CEO Shikha Sharma said during the launch of Saral Money’, which is jointly launched by Axis Bank, ICICI Bank, HDFC Bank, SBI and Indian Overseas Bank.......
Financial Inclusion for Muslims in India: How Can Islamic Finance Help?
.............Among other interesting insights that were made in the webinar, with a recording now available at http://www.ethicainstitute.com/achieving_financial_inclusion_for_indian_muslims.aspx, was the notion that India represents the "last frontier" for Islamic finance, which is the largest global alternative financial system and is now present in many Muslim minority countries across the world. A comparative analysis of how different governments in such countries have facilitated Islamic finance was also made during the webinar that included countries such as France, Ireland, Luxembourg, USA, Canada, UK, Hong Kong, Singapore, Australia, Thailand, Kenya, Sri Lanka and South Africa. This analysis becomes all the more relevant in light of the landmark statement made last month by the Reserve Bank of India (RBI) Governor D. Subbarao that sought an amendment to the current banking laws in order to introduce Islamic banking in India. So what is it that is required to kick start Islamic banking and finance in India?...........
The RBI has a very tough job ahead of it: Dr Pronab Sen, Planning Commission
.........What do you think would be the correct course of action the RBI should take?
The RBI has a very tough job ahead of it. When we talk about rate cuts, it should be seen independently of the larger monetary policy. The fact is we have had two cuts in the CRR. If the investment cycle does not pick up, there is going to be downward pressure on the market interest rates and the RBI cannot allow the policy rates to diverge too much from what is happening in the market. Otherwise, the policy rates tend to lose the relevance. So at some point in time, the RBI is going to simply cut the policy rates to bring it in line and in a sense, restore the quiver of arrows that they have. ..............
NEW FORMAT CHEQUES
RBI has decided to introduce new format cheques for all bank transactions across the country from the year 2013. Following this decision, all the cheques in the old format will be condemned and the cheques in the new format will be invariably in force. However, this proposed move of the RBI is fraught with a hitch in so far as the bank clientele who have issued post-dated cheques to a third party 3 to 6 months in advance so as to redeem the same by the banks in the year 2013 would have to face the problem of their cheques getting bounced when the proposed move would come into force. Hence, it is expedient that the RBI makes certain amendment to their policy of new cheque format and accordingly relax the rule so as to allow the redemption of all post-dated cheques until the end of the current financial year.
Bh Indu Sekhar, Tarnaka (Hindu)
RBI asks banks to consider issuing debit cards with photographs to prevent misuse
..........."With a view to reducing the instances of misuse of lost/stolen cards, banks may consider issuing cards with photographs of the cardholder or any other advanced methods that may evolve from time to time," the RBI said while issuing guidelines for issuance of debit cards. The guidelines were issued after a comprehensive review of existing instructions on issue of debit cards.......
Banks can issue only online debit cards: RBI
Debit cards that do not ask for an authorisation code when used in shops or anywhere else will be discontinued soon. The Reserve Bank of India has asked banks to issue only those debit cards, including co-branded ones, where typing such codes are mandatory, within the next six months.......
Banks can issue online debit cards without RBI nod
......However, bankers should conform to the norms laid down by the RBI while issuing such cards. The RBI has asked banks to follow board-approved policies. Strict compliance with KYC (know your customer) norms, AML (anti-money laundering) standards, CFT (combating of financing of terrorism) and obligation of banks under PMLA (Prevention of Money Laundering Act) is a must, the banking regulator said.......
Sending money from kirana store via SMS
Remitting money from the kirana store in the neighbourhood or allowing cash withdrawal from your bank account through a text message has become possible, with private sector lenders starting to offer these services. YES Bank is partnering retail stores to allow customers in remitting money through these shops. "Curiosity killed the cat. In our case, curiosity gave us a new business strategy," Anand Bajaj, executive vice-president and chief innovation officer at YES Bank, told Business Standard.........
NBFCs may need RBI nod for change in ownership control
N
on Banking Financial Companies (NBFC) would need RBI's prior approval before making changes in their ownership control, a draft guideline of the central bank said. The RBI's draft guidelines based on Usha Thorat Committee report also seek to make mandatory for all deposit-taking NBFCs to obtain credit rating. Appointment of CEOs of NBFCs with asset size of Rs 1,000 crore and above would require the RBI approval, it added.......
The tyranny of KYC norms
It is the season for KYCs. For the uninitiated, that is “know your customer”. Your bank wants to know you. Your gas supplier wants to know you. And, of course, your telephone service provider also wants to know you. Huge caution, though, to those of you who may have a Ghajini-style short-term memory loss; or for those who may be too old, too sick, too busy or just too stressed to remember details. KYC is not just about giving your address, date of birth and other such mundane stuff — but also about remembering the precise details you fill out in the form, and for several years to come!.......
‘We are slowly opening up the bond market for FIIs’
The Reserve Bank of India will allow foreign institutional investors (FIIs) to invest more in government securities and corporate bonds, said Deputy Governor, H. R. Khan. In the works is a proposal to allow FIIs to invest $5 billion each in government securities and corporate bonds without any restriction on residual maturity...........
RBI may allow repo trades through CP, CD
The Reserve Bank of India ( RBI) may soon allow repo trades between market players through Certificate of Deposits (CDs) and Commercial Papers (CPs). “Given that not much of transaction happen and also that there is a demand, we will allow repo in CDs and CPs,” said HR Khan, deputy governor of RBI at CII event on Wednesday. Khan also said that the government is expected to notify on reducing withholding tax on rupee-denominated infrastructure bonds soon. Besides that the RBI was also considering whether foreign investors can be allowed to participate in currency futures trading..........
RBI policy: Financials in focus
.......If the RBI beats expectations in that it does announce a rate cut along with a CRR cut, the Bank Nifty is likely to jump to a new high — beyond the 13,000 mark. If the RBI offers just a CRR cut, the index is likely to move down slightly but find support at around 12,100. If the RBI hikes rates and doesn't offer a cut, a sharp fall till below the 12,000 level could result. So, the trader is seeing a potential movement of about 500-600 points in either direction.
Inflation will be game-changer
....Inflation is going to be the game changer in times to come, as it would determine the Reserve Bank of India’s (RBI) rate action. ICICI Securities estimates the annual inflation at 7.08 per cent in November, the lowest since December 2009. Despite this, RBI might not start cutting the benchmark rates from December. Other economists like Deepali Bhargava of Espirito Santo, however, believe inflation for November could come in at 7.68 per cent year-on-year. Even if inflation comes in above RBI's comfort level, economists expect the central bank to cut rates only next year..........
Banks should look at quality of data they provide: RBI Regional Director
Banks should address data quality, which is a key for sustainable growth and they should also look at MSME sector for the growth, according to a Reserve Bank of India official. In his keynote address at Credit Information Bureau (India) ltd (CIBIL) seminar on "Increasing credit penetration and improved asset quality" N S Vishwanathan, Regional Director, RBI, said, "When it comes to credit infor about the borrower is the key and how to reduce cost. Quality of information is key in retail segment, which is growing fast. "Data quality is the major issue, while we see quantity, depth, coverage of data are increasing."
IIP Numbers: Green Shoots Or Fluke?
.........The central bank has said any interest rate cut is "highly improbable" at the meeting next week, since it expects price pressures to remain elevated following a hike in the price of heavily subsidised diesel in September. Some economists expect a cut in cash reserve ratios (CRR) for banks, to help liquidity. Any data signals that the economy is past the trough of its slowdown will bolster the RBI's case that taming inflation should take precedence over reviving growth in its rate-setting policy. November wholesale price index data, which the Reserve Bank of India gives more weight to in setting policy than the relatively new consumer price index, is due to be released on Friday. "With inflation likely at 7.8 per cent in November, a rate cut is ruled out in December. I do not expect any CRR cut also as the government is maintaining large cash balances with the RBI," said Sujan Hajra, chief economist with Anand Rathi securities in Mumbai..........
Government aims at complete financial inclusion
.....The government is also giving a push to rural ATMs. State run banks plan to install around 63,000 ATMs. Cash Management firms who manage transfer, transporting and other service related issue of ATMs are also gearing themselves to explore the opportunities. One of the largest firms in the segment SIS Prosegur is already working to create a cash management infrastructure........
Decline in WPI must for RBI to cut rates: C Rangarajan, PMEAC
.The concern about inflation will be a major factor. The CPI number which has been released today is not very satisfactory, but let us wait for the WPI index number. If inflation, according to WPI, shows some decline, then I believe there will be some room for the RBI to rethink, but if it does not, perhaps we will have to wait till January........
IIP surprises: Will Subbu be able to battle inflation in peace now?
Reserve Bank of India (RBI) Governor Duvvuri Subbarao just got a new number to factor in before he unveils his review of the monetary policy on 18 December. Surprising most economists and observers on the upside, the latest Index of Industrial Production (IIP) print for October 2012 came in at a healthy 8.2 percent, much higher than most expectations which were in the region of 4.5 percent..........
Credit tap runs dry for small biz
.....There are hundreds of Periyaswamis, nay lakhs of them, with similar stories playing out in different parts of the country, triggered by the recent moves by the Reserve Bank to encourage banks to lend directly to the Micro, Small and Medium Enterprises (MSME) in the country..........
RBI not ‘taken on record’ Walmart remittance into Bharti firm
The Reserve Bank has “not taken on record” the documents filed for investment of Rs 455 crore by Walmart into Bharti group firm Cedar Support Services and alleged FEMA violation in the matter which was referred to the Enforcement Directorate. “The form FC-GPR filed for issuance of the Compulsorily Convertible Debentures (CCD) has not been taken on record by the RBI to ensure that the CCD are FDI compliant instruments and for the purpose certain information has been called for from the company,” Minister of State for Commerce and Industry S Jagathrakshakan said in a written reply in the Rajya Sabha..........
Minister yet to take action in Samata Bank case
........Samata Bank got into trouble seven years ago due to bad lending practice for which the management is being held responsible. Initially, RBI had issued an order restricting withdrawal amount by each depositor to Rs1,000. RBI action had left the 57,000 odd depositors in lurch. Many of them were pushed into financial distress when their money got stuck up in the bank. The bank's operations was wound up three years ago.........
FCI's swap deal with Barclays, Axis went awry as it lost about Rs 34 crore: CAG
......The Reserve Bank of India has already flagged off concerns on the end use of interest rate swaps, as the negative spreads between interest rate swaps and similar tenor government bonds indicate, these instruments are not being used for the intended purpose of hedging. "The situation here in the IRS segment is almost getting to the point where the IRS market is existing almost entirely for its own sake and to the almost complete exclusion of the needs of the real sector, creating a massive "financial sector-real sector imbalance," V.K.Sharma, Executive Director, RBI, had said at a seminar on November 8.........
Banking Bill will not go back to parliamentary committee: Chidambaram
..............The passage of the Bill is critical to the government as it will pave the way for the central bank to issue new banking licenses to the private sector. Late November, Mr Chidambaram had said the RBI should begin issuing new bank licences, and that amendments to the Bill are simply to formalise powers that the central bank is seeking. However, RBI Governor D Subbarao had said it would be not possible without fulfilling the enabling conditions.
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