‘No bias, fit and proper persons will get bank licences’

.........“RBI is the licensing authority. The Government has no role to play in granting bank licences. Let there be no misunderstanding. The Government has no bias in favour or against anyone getting a banking licence, provided fit and proper conditions are met,”..........

....“I agree that there are some problems in giving more powers to RBI. But I think RBI is best placed to continue being the regulator for banks at this stage”.......

Read - HBL

Parliament has opened doors for inclusive banking, RBI must move now

...........The RBI must allow each mobile company to form joint ventures with every existing bank, so that a farmer with a phone is able to use it as a machine for storing value, receiving funds and making payments. A few baby steps have already been taken in these directions: it is possible for a bank account holder to transfer money to mobile phone balances, for example. But more need to be done. Outdated legislation and the RBI's conservatism held back many reforms on the ground, but now that legislators have done their bit, it is up to the mandarins at Mint Street to shed their acute conservatism and bat for maximum financial inclusion.

Read - ET

New banking bill faces key challenges

..............The Reserve Bank of India has the power to grant new licences, but is expected to move slowly given the regulatory risk posed by the entry of financial firms with no banking experience. Despite earning new regulatory powers in the banking bill passed on Thursday, analysts say the RBI could issue only three to four licences in the next 12-15 months, denting expectations for a flood of new lenders in the sector.

Read - ET

Can RBI keep the lid on inflation? - A.Seshan

.......The question is whether the central bank can put the inflation genie back into the bottle, after having unleashed it in the wake of the Lehman crisis. Clearly, the expansionary policies of the government and RBI in 2008-09 were a panicky overreaction to the international financial crisis and unwarranted by domestic circumstances..........

The author is an economic consultant, former officer-in-charge, Department of Economic Analysis and Policy, Reserve Bank of India, and Adviser to National Bank of Kyrgyzstan and Bank of Sierra Leone

Read - BS

Politics, laws weigh on Islamic finance in India

.....Nisar at TASIS said that one possibility, which would not require amendments to the banking act, would be for the RBI to issue an order allowing non-bank financial companies to operate under a participatory model. Under this model, NBFCs would not charge interest but instead pay depositors with the proceeds of investment funds. However, RBI officials told Reuters they did not think this would be feasible. Rules for NBFCs are the same as for banks with regard to interest rates, they said.......

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Co-operative credit societies will have to seek banking license from RBI

...........While those co-operative credit societies with reserves and paid-up capital of over Rs 1 lakh have to register with RBI, most of these societies operated with a lower capital to avoid regulatory overview. Following the amendment in the Banking Regulations Act, the RBI will issue details guideline regarding the capital requirements that would apply for cooperative credit societies. As per the amendment in the Act, these societies will have to comply to the norms specified by the RBI within one year of it being notified. Alternatively, they will be forced to suspend banking operations. ...............

Read - ET

RBI extends date of chequebook return to April 1

If you are confused by the text messages being sent by your banks reminding you to change your old chequebooks, here is an answer to all queries.............

Read - Hindustan Times

Banks meet 61% credit target in Kannur

........ome banks, however, were criticised for their non-achievement of 40 per cent minimum target in the agricultural sector set by the Reserve Bank of India (RBI). District Collector Rathan Kelkar, who chaired the meeting, urged the banks to be liberal in the disbursal of education and agricultural loans. Syndicate Bank Deputy General Manager V. Ashokan, RBI Assistant General Manager (AGM) K.D. Joseph and Nabard AGM P. Dinesh and Lead Bank Manager V.S. Jayaram spoke.

Read - The Hindu

SBI: Reduce fixed deposit minimum tenure to 3 days

.....Speaking on the issue of interest rates on savings bank deposits, SBI Chairman Pratip Chaudhuri said he had requested the regulator to reduce the tenure of minimum deposit from seven days to three days. “We think a savings bank is not about rate of interests alone. It is about the facilities, the experience and so on. In fact, I am requesting RBI, time and again, that the tenure of minimum deposit be reduced from seven days to three days,” he said........

Read - BS

Union Bank bags Best Bank in Public Sector Technical Award from NPCI

Lalit Sinha, GM, Alternate Channels and Ajit Rath, GM, DIT receiving the award from former RBI E.D. Dr. Burman and A.P. Hota, CEO, NPCI. 

Union Bank of India received the Best Bank in public sector category Award from National Payments Corporation of India (NPCI) for operational excellence in national financial switch. The awards were given by NPCI during their annual NFS User Meet at Mumbai on 13th Dec.2012. These awards are given by NPCI based on excellence in performance in operation of ATMs covering parameters like dispute management, net work uptime, control on transaction declines, DR Drills etc. NPCI evaluates banks based on the performance data available with them. Union Bank of India has 4264 ATMs connected to National Financial Switch of NPCI servicing the customers of 118 member banks.

TOI

Abhyudaya Co-operative Bank penalized by RBI for violating guidelines

...........An investigation carried out in the bank's Vashi branch revealed that the bank failed to comply with the RBI guidelines on KYC/AML process. Penalizing the urban co-operative bank, RBI said, "The bank had also violated instructions by freezing the account and thus tipping off the customer. It had also closed the audit trail by closing the account."..............

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Tough times ahead?

......Making the market regulator responsible for policy lapses is not wise given the backdrop of tough macroeconomic environment coupled with uncertainties looming large. This is not to suggest that the rating agency’s alarm bells on asset quality of banks should be ignored. Both RBI and banks have huge challenges on hand to contain the NPAs to acceptable levels.........

Read - FE

Shadow banking: Silent threat to India’s growth story

.....With non-bank companies accounting for almost 40% of India’s financial system, policy makers are struggling to tame inflation and reverse slowing growth, said Ashima Goyal, a Mumbai-based economics professor and member of the central bank’s technical advisory committee. While the Reserve Bank of India raised interest rates 13 times from mid-March 2010 through April of this year, inflation has remained above 8% for 21 of 26 months, according to data compiled by Bloomberg. Having so much money outside government control “stands in the way of smooth transmission of monetary policy,” Goyal said. “This challenge is at the root of India’s struggle to administer policy that will trigger the kind of growth the world is expecting out of India.”........

Read - DNA

Rocketting financial Inclusion in India

.......Although there is a long road ahead for complete financial inclusion, the business correspondent model has the potential to be the model of socio-economic inclusion for India.....

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Parliament gives final approval to Banking Amendment Bill

........Winding up the discussion on the Bill in the House, Mr. Chidambaram said the modified legislation would help create "world size" banks in India. "We need more banks. Yes, we are opening new branches, but that's not enough... We need two to three world size banks," said Mr. Chidambaram, adding that the new regulation would help achieve this objective.........

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Bank licences by Dec-end; FinMin, RBI plan guidelines

............The finance ministry is now preparing a letter that will be sent to the RBI on Friday  morning regarding the submission of the final guidelines that will be later considered by the finance ministry. Some of the suggestions listed by the finance ministry include the categorisation of banks banks into three groups - local, regional and national banks and international banks.......

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Moves afoot for mergers of public sector banks

.......“The issue of consolidation (of  public sector banks) has been taken up by the finance ministry, though it is still at a nascent stage,” said a senior finance ministry official on condition of anonymity.........

Read - Hindustan Times

Banking Amendment Bill: What are its benefits to the banking public?

The measures contained in the Banking Amendment bill are expected to create more confidence among investors, depositors and the public in the banking system. But a lot more requires to be done in the area of improving corporate governance, better customer service, and more importantly freeing the public sector banks from the political interference and the dual control of banks by the finance ministry and the RBI.....

Read - Moneylife

Shriram splits holdings with eye on bank licence

The Shriram Group has moved its non-financial businesses worth Rs. 4,500 crore to a  new holding firm, Shriram Venture, to meet Reserve Bank of India (RBI) norms and apply for a banking licence, a top official of the Chennai-based firm said.........

Read - Mint

Govt bank employees strike, residents inconvenienced

Employees of government banks observed a complete strike on Thursday at Sangrur. Protesting under the banner of All India Banks Employees Association (AIBEA) and Banks Employees Federation of India, employees demanded the roll-back of the recent Banking Regularisation Act and slammed the government's move to grant banking licences to big business houses..........

Read - Hindustan Times

The lure of gold

........As far back as July 1958, I G Patel predicted in an essay titled “Turning Gold into Base Metal”, carried in the Economic Weekly, that “gold bonds would prove unattractive to most people”. This essay concluded that “dethronement of gold from the position it occupies in India — deserves serious consideration”. Well, many Indians continue to want to keep their gold holdings confidential. Consequently, to reduce demand for gold, alternative investment avenues would need to be devised to facilitate anonymous cash purchases of inflation-proof, low-risk and potentially high-return instruments. Clearly, this may not be feasible or ethically justified........

Read - BS

RBI begins check on collateral adequacy for corporate loans

...........A senior official associated with CDR said RBI’s move on checking collateral adequacy made eminent sense, as questions on quality and adequacy of securities were often raised when recast proposals came. The feasibility of restructuring crucially depended on the collateral and securities offered, he added.

Read - BS

Stop resorting to strikes, Chidambaram tells bank unions

Finance Minister P. Chidambaram on Thursday asked bank unions to desist from resorting to protest strikes, stating that such actions were not desirable in an important industry such as banking. The Finance Minister’s advice came on a day when over five lakh bank employees and officers went on protest strike, paralysing banking operations in many parts of the country..........

Read - HBL

RBI directive on ATMs

IMPHAL, Dec 20: Representatives of Reserve Bank of India (RBI) today instructed officials of banking institutes to ensure sufficient availability of cash at their respective ATM booths..........

Read - The Sangai Express

RBI asks payment operators to move to IPv6

.........“The DoT has undertaken the initiative of migration from IPv4 to IPv6... They have expressed that the migration of all payment gateways, banks, financial institutions, insurance companies, etc, including their websites should be completed at the earliest,” RBI said in a notification. Since migration to IPv6 is an eventuality that has to be accepted and manage proactively, government wants it to be done in a planned manner, it added. “We...advise you to initiate necessary action by constituting a special team to complete the migration at the earliest and keep us informed of the progress made by March 30, 2013,” RBI said in a notification.......

Read - Mint

Strike hits banking activity

.....Banking activity in the State was hit on Thursday as a result of the strike by employees and officers in protest against the amendments to banking regulations that are aimed at facilitating the entry of Indian corporate groups to venture into banking.......

Read - The Hindu

On strike: Why bank unions are opposing banking bill

...........The passage of the bill will be a giant step towards de-nationalisation of the PSU banks that have played a pivotal role in the growth of India’s economy........

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ATMs, e-payment options take sting out of bank strikes

....Compared to earlier days when bank strikes had brought the normal financial world of the public to a halt, bank-strikes these days seem to be a non-issue for many, thanks to technology. The increasing presence of ATMs, usage of Internet banking and e-payment gateways are obviously working in favour of bank customers these days. “I think technology made bank-strikes irrelevant for many because of increasing use of alternative channels,’.......

Read - HBL

SBM in your pocket

State Bank of Mysore has embraced mobile banking and internet banking to serve its customers. The bank, through this medium, has found an alternate delivery channel for the customers’ banking needs. This is just like having the bank in your pocket or at your house/office..............

Read - HBL

CanMobile - banking while you are on the move

....While some banks launched mobile banking at an early stage under different SMS and GPRS-based platforms, Canara Bank worked hard to introduce a strong and secure solution for mobile banking to facilitate its customers.......

Read - HBL

Karnataka Bank opens new delivery channel for customers

....“To begin with, our bank is proposing to have over one lakh customers subscribing for ‘KBL-Mobile’ services.” Karnataka Bank wants to make use of mobile banking services as a financial inclusion platform by reaching out to large section of people across India,........

Read - HBL

Banks take deposit route to cross-sell products

The latest entrants in the banking sector are focusing on retail liabilities, which in turn are used for cross-selling products to boost fee income. These are looking to grow their customer base by first offering a savings bank account and then cross-sell loan products........

Read - BS

As bad loans rise, rival banks share info on clients

With bad loans turning an increasingly heavy millstone, it’s time for enemies to turn frenemies on Banking Avenue. The Reserve bank of India (RBI) has ordered banks to mandatorily share information on borrowers and public sector players have kicked off the process in right earnerst............

Read - DNA

Takeover news false: Karnataka Bank MD

The Karnataka Bank Ltd (KBL) is not facing any takeover moves and reports to that effect are all “rumours”, according to managing director and CEO, P Jayarama Bhat. According to him, the bank is, in fact, looking at increasing its export credit from the current Rs 1,500 crore to Rs 2,500 crore in the current financial year (FY13). “The Reserve Bank of India (RBI) said it was advisable to have export credit at 12 per cent, and we were planning to achieve that. We have a target to reach about Rs 2,500 crore of export credit. We are at around Rs 1,500 crore now, so there is a Rs 1,000-crore gap. We are planning to cover this in 2012-13,” said Bhat..........

Read - BS