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Friday, January 11, 2013
Underlying reasons for gold rush - S.S.Tarapore
Banking Ombudsman Scheme may be widened
........Another likely revision, which has also been proposed by the Damodaran Committee on customer service, is to ask banks to strengthen their internal Ombudsman schemes so that the RBI's Banking Ombudsman can function as the Appellate Authority, says an official of the Indian Banks' Association. Currently, the Deputy Governor of RBI is the Appellate Authority.......................
Food court to add spice to Chennai book fair
....It will not be all books
at the fair. The RBI will put up a stall to create awareness about
banking facilities and to sensitise people about fake currency notes. An
ATM by Union Bank will also be set up at the venue. School education
minister N R Sivapathi will inaugurate the book fair ...........
RBI to hold coin melas
The Reserve Bank of India has launched camps with various banks to meet the increasing demand for coins this Pongal. On Friday, coin melas will be organised at Indian Bank, Purasawalkam and at Canara Bank in Koyambedu, a press release said.
M D Mallya BS Banker of the Year
M D Mallya, who retired from Bank of Baroda (BoB) as chairman in November last year, is the Business Standard Banker of the Year 2011-12. He was chosen by a four-member jury, headed by former Sebi chairman M Damodaran.................
SBI chief bats for rate cut
State Bank Group chairman Pratip Chaudhuri has argued for a 50-100 basis point reduction in cash reserve ratio (CRR) and a 50 basis-point cut in repo rates, saying that these would do enormous good to the economy, at a time when credit absorption was flagging due to high interest rates..................
Kill cash
..........A payments company like Visa, MasterCard or RuPay, an RBI initiative, can take care of settling payments. Scale will bring down their fees. And for every crore rupees worth of tiny transactions they settle, they can be paid something from the government so that they have an incentive to make a good job of settling small payments in remote areas. The banks are the agencies to deploy the swipe machines. They can split their incentive from the Centre with the payment companies..................
Credit cards linked to fixed deposits are good for customers and even better for banks
........After the credit crisis in 2008, banks hit the break on credit card issuances that hit a high of 27 million cardholders in 2007- 2008 - defaults hit a high of 20- 22% and banks like ICICI, one of the most aggressive issuer of cards in India, had to clean up their portfolio. By F12, the same had come down to 17 million as per RBI data. The secured card is usually the first card that one takes in the US, a developed market for credit cards, to start building one's credit history. Indian banks are now pitching the same to clients with low CIBIL scores, over- the- counter, or on email. Various banks, like SBI and DCB, have trained scouts on market visits and ICICI began offering instant FD- linked cards to net banking customers only recently..............
Reserve Bank of India sees stress on state finances from 2017-18
..........India's central bank raised concerns over states governments' debt repayment capacity from fiscal year 2017/18 because of higher market borrowings and the recently announced bailout scheme for state-owned power companies. "The increase in market borrowings of state governments since 2008-09 could lead to large repayment obligations from 2017-18 onwards," the Reserve Bank of India said in its annual publication on state finances, 'State Finances: A Study of Budgets of 2012-13', released on its website...............
Encourage NBFCs to continue and build on their business models: G S Sundararajan
........RBI wants to convert existing NBFCs into banks…
If we want to continue to achieve financial inclusion, we should realise some NBFCs like us and banks are in mutually exclusive customer segments. Hence, if we want NBFCs to get into banking space, then they should be encouraged to continue with their business models and, at the same time, expand on their additional products to the existing customer base after conversion.
What if RBI insists?
In the current scenario, there are some businesses which we can do as a bank. So, there is a choice, which we will have to exercise. As long as we are able to convince the regulator that there will be no regulatory arbitrage, I am sure they will support us in furthering financial Inclusion...................
RBI floats draft norms on capital needs for counterparty risk
In order to enhance risk management system of banks, the Reserve Bank of India (RBI) has proposed tweaking norms for capital adequacy with regard to their exposure in derivative instruments. Under the new framework, banks’ exposure to central counterparty (CCP), a clearing house, arising from OTC derivatives, exchange traded derivatives and Securities Financing Transactions (SFTs) will be subjected to capital requirements for counterparty credit risk, the RBI said in a draft guidelines........
Government mulls interest-free banking incentive to woo Muslim voters
........It is learnt that a recent exchange of letters between minority affairs minister K Rehman Khan and RBI Governor D Subbarao in December has given a new push to the issue, hanging fire for want of requisite changes in the existing banking laws. The RBI has been insisting that to make it possible, an amendment is required in the Banking Companies Regulation Act, 1949. This was conveyed to the finance ministry recently after Khan raised the issue with the RBI governor through a letter, dated December 5, 2012.......
Dump gold abroad
.........Even if two per cent of the gold holdings with the public can be garnered through an attractive scheme for exporting, the government will be able to influence the international prices. A gold bond scheme that offers the lowest of the market value of gold or an inflation-adjusted assured return can easily attract the public, and accumulating gold stock for export will not be difficult.
How to stop the gold rush
.......RBI talks of gold deposits, accumulation and pension schemes. Will
people really come forward and deposit their gold and take it back
after say 5 or 10 years? If it is held for security or vanity, then this
will not happen. Also, most gold held by households could be in the
form of jewellery and not coins especially in rural areas, which makes
such a scheme a non-starter as the individual would expect the same to
be returned at the end of the tenure. If the idea is to churn this gold
for meeting further demand, then the scheme may not work. ................
'Both farmers and bankers culpable’
..............Official sources said that it is imperative on the part of supervisory bodies such as the RBI to make sure that the crops and area mentioned in the loan applications are genuine, and loan is used for the stated purpose.
CBI inquiry sought over misuse of interest subvention scheme
........Sources in the NABARD point out that the Reserve Bank of India is already seized of the issue. In its circular dated November 9,2012, the RBI said “the government of India, through its budget announcement for 2006-07, introduced an interest subvention scheme with a view to ensure (sic) availability of short-term crop loans up to Rs.3lakh to farmers at a reduced rate of seven per cent per annum. This scheme has continued ever since with minor variations. Currently, with three per cent additional subvention for timely repayment, the effective cost of short-term crop loan comes to four per cent for farmers.”.........
Delhi-NCR: The crown and the jewel
................But the RBI instructing scheduled banks to not allow a rollover of loans given to real estate developers into next financial year will mean that developers will see an urgency to dispose of their unsold inventory to raise funds to pay back their loans. This holds the potential for a major correction in residential prices in the NCR region................
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