.....Policy Options Given that the inflation rate is way above the RBI's comfort zone of 4.5- 5.0 per cent, the large fiscal deficit, the large CAD, the overvalued rupee exchange rate, the overextension of credit and the sluggish deposit growth, there is no case for a reduction in the repo rate or the CRR. In fact, the situation calls for tightening of monetary policy to squeeze inflation. The powerful political economy forces of industry and government will not permit the RBI to undertake the policy tightening which is necessary. It would be a heroic act on the part of the RBI to keep the present policy stance unchanged. What is likely to happen is that, in all probability, the RBI would, on January 29,2013, reduce both the repo rate and the CRR, each by 0.25 per cent........
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, January 14, 2013
The challenge of gold
.....One promising remedy would be “financialisation” of gold, both the imported component as well as the domestic stock. Banks and institutions need to introduce attractive savings packages based on gold. Simultaneously, alternative avenues for investment should be made to provide a real rate of return that is higher than what obtains now. Only then can domestic consumers be weaned away, at least partially, from their craving for gold......
Microfinance - Book Review by P.P.Ramachandran
..........NGOs are the backbone of financial intermediation for the self- help groups. Even with the strident official backing, their work has become an inalienable and invaluable part. Assisting the credit institutions has been an upsurge in the growth in MF institutions. This growth led the RBI to appoint a Committee headed by Dr. Malegam to recommend appropriate regulations for the sector. The Finance Ministry has formulated a Finance Bill proposing to confer regulatory powers on the RBI. The book under review is a history of the development of MF institutions and is an exhaustive analysis of the literature concerning that. MF is one of the growing tools of development and microcredit has become an integral part of social banking The SHG- BL programme backed by Nabard is the largest MF programme in the world. There are a number of government programmes, which support the poor. The book is a comprehensive survey of the literature on MF movement in India and abroad...........
Ex-RBI staffer fights to save her flat
........Nearly four decades ago, when she was a top official with the Reserve Bank of India, she had invested most of her savings into purchasing the two-bedroom flat, one that she hoped she could retire peacefully into. As luck would have it, she (with the help of her 96-year-old sister Taramati Israni) has been left battling her nephew for her 900-sq-ft home. Her nephew Mukund Bhide came back into her life four years ago and after a while, she made him a joint beneficiary on all her bank accounts so he could do the running around for her. “He swindled me of lakhs of rupees and took away the original share certificate of my house without my knowledge.” .........
Ex-MLA denies scam in Bapunagar bank
...........However, former Rakhial MLA Kanubhai Kotiya, husband of an accused Lilavati Kotiya, refuted the allegations made by the Reserve Bank of India (RBI). “The scam complaint registered against us is false. The whole thing has been misinterpreted by the RBI. As far as fake accounts are concerned, we have not done any such thing,”...........
RBI governor’s assurance to Vijayamma
RBI Governor D. Subba Rao has reportedly assured YSR Congress honorary president Y.S. Vijayamma that the future of the staff working in public counters of RBI regional offices will not be jeopardised by their closure. He was replying to a letter written by Ms. Vijayamma.
RBI plan: Financial literacy for students
....“We are in touch with UP Board officials and they have responded well to our initiative. In some of the books, they have already incorporated some topics like how to detect forged currency notes, etc. We are confident that other concepts would be added soon. It is important to educate young children about banking,” said Hemant Kumar Soni, DGM, rural planning and credit department, RBI while addressing the media..........
RBI watchful of non-compliance by PSU banks
........RBI has come down heavily on banks for not complying with the regulators annual inspection report findings. In a notification released last year the RBI had told banks to take the inspection findings seriously and to comply with them immediately after receiving the report...........
RBI can’t fight inflation on its own
....... With so many factors at work, if RBI goes for a rate cut, which many believe will happen, it is suggested that the government lend adequate support in terms of reducing non-essential imports such as gold, and taking measures to control fiscal deficits. The good news is with direct cash transfer slowly being put in place, it is expected that the government will be able to better utilise its funds, and control the fiscal deficit........
Appointments with a purpose
The newfound enthusiasm surrounding the selection of financial services secretary reaffirms the government's intent to oversee state-run banks
....., the animated discussion that is going on among civil servants over Mittal’s departure and the choice of his successor is unusual. There are several reasons for this. Even though Mittal’s role was not as critical as that of his counterparts in the departments of economic affairs, revenue or even expenditure, and until recently he would not even have an independent office in North Block, the ministry’s headquarters, his job per se was not unimportant. Ask any public sector banker or those working for the Reserve Bank of India and they would tell you how Mittal became an important player in India’s financial sector and how he used the financial services department to keep a tight vigil on the way the state-controlled banks functioned or even were regulated. ......
When and where the roads of Govt and Reserve Bank will meet? - T. V. GOPALAKRISHNAN
.......The economy can perform well only if both the Government and the RBI are on the same road and they take joint efforts mutually respecting each other’s role. Hope the roads they are presently on are not parallel...........
Fiscal situation may worsen: Assocham
.....“The slower pace of GDP growth has affected the manufacturing and trade sectors thereby resulting in lower than estimated excise duty collections. Higher policy rates of RBI, in an effort to contain inflation, has led to an investment downturn,”.......
50 bps rate cut likely in RBI policy review: Credit Suisse
....“Following a break of nine months, we expect the Reserve Bank to cut the repo rate at its January 29 meeting, probably by 50 basis (0.5 per cent) points to 7.5 per cent,” .......
Provisioning norms for NBFCs will hit profitability: Assocham
......“New NBFCs are likely to be more adversely affected due to the need for additional capital. If the required capital could not be raised with reasonable cost, they may be forced to restrict the scale of operations or shrink their business, and this may pave way for some consolidation too,”..........
Tata Capital says new norms to eat into bottom lines of NBFCs
..........The draft norms, based on the recommendations by the Usha Thorat (Former RBI Deputy Governor) committee and released last month, seek to bring NBFCs at par with commercial banks. Stating that banks operate with benefits like recovering money under the Sarfesi Act and having access to low-cost deposits, he said, "Only on the disadvantages side you are going to bring it (banks and NBFCs) at par, and thus it becomes difficult."..........
Bharat Bank bags 1st prize for best H.R.Project
ET
Shri Ratnakar Deole has wrongly been quoted as Former ED. He retired from Premises Department, Central Office as Chief General Manager.
Banks set to slash rates for MSME loans
.....A senior banker familiar with the issue, who did not want to be named, said, “In cases where over leveraged companies have managed to get a fine rate, RBI is asking banks for an explanation on how they arrived at the rate. RBI is insisting that rating should be directly linked to the price of a loan.” The Reserve Bank of India (RBI) had set up working group last year headed by Deputy Governor Anand Sinha for transparency in pricing of loans, but the committee is yet to submit its report......
Financial holding co to infuse equity into PSBs likely
The finance ministry will soon send a note to the Cabinet for setting up a financial holding company (FHC), which will leverage its capital base to infuse funds into public sector banks, a senior ministry official said. The proposal, based on the recommendations of the Shyamala Gopinath committee, has the backing of the Reserve Bank of India (RBI). The ministry will also send its views on bank licence norms to RBI next week.............
Will Chidambaram become Rahul’s Manmohan Singh?
..........However, it is the constant pressure on the RBI top brass that has thoroughly exposed PC’s undemocratic nature. He is unwilling to share power. Whether it is D Subbarao, or his predecessor Y V Reddy, PC has covertly and overtly sought to erode the autonomy of the central bank by trying to force his will on it, especially in regard to the benchmark policy rate............
UPA's last chance?
...........Banking is a two-way relationship with several changing dimensions. ATMs and hand-machines with banking correspondents cannot substitute for the personal relationship a banker cultivates with his/her clientele over time. But it is quite unlikely that the present political leadership will opt for such a change, since time is running out for them.
‘ Interest- free’ Islamic banking in offing
The minority affairs ministry is working with the Reserve Bank of India to introduce the " interestfree" Islamic banking system, which will enable over 15 crore Muslims to use banking facilities without tinkering with the Islamic code of belief that prohibits them from earning any interest. It may provide " vehicles of financial instruments which can facilitate interest- free financial products, including loans, for the community's benefits," says Minority Affairs Minister K Rehman Khan, who wrote to the Reserve Bank of India Governor D Subbarao last month, to first introduce some financial instruments as a pilot. He had suggested that the RBI set up a committee to examine the possibility of such financial instruments........
R.K.Dubey joins Canara Bank as CMD
R K Dubey has assumed charge as Chairman and Managing Director of Canara Bank, one of the leading public sector banks in India with effect from Jan 11. A professional banker par excellence, Dubey carries with him vast knowledge and multi- dimensional banking experience, spanning over three decades. His key areas of expertise include planning and budgeting, resource mobilization, credit, risk management, HR, IT and marketing. A post graduate in English, Dubey's academic credentials also include LLB, MBA in HR and a Certified Associate of the Indian Institute of Bankers. Born on 10.09.1954, Dubey joined PNB in the year 1977 as a management trainee and moved up to the ranks of a General Manager in 2008 and was appointed as Executive Director of Central Bank of India in 2010.FPJ
Raj Kumar Goyal takes charge as Executive Director of Central Bank
Raj Kumar Goyal has taken charge as Executive Director of Central Bank of India, one of the largest nationalised banks of the country with effect from Jan 11. He replaces Rajeev Kishore Dubey. Goyal was earlier working with Bank of India as General Manager, HRD. He has more than thirty five years of experience in banking having worked extensively in the areas of credit, human resources, general operations and international banking at Bank of India's London Branch.
FPJ
Demand for SBI module office in Gulbarga gains momentum
.....The establishment of the module office would lead to the opening of new branches and increase the bank’s commercial activities. Although Gulbarga district had been sanctioned 9 licenses by RBI to open new branches in different parts of the district, only two new branches will be opened. The remaining licenses are being shifted to other districts. If SBI’s module office had been set up here, all nine branches would have opened in Gulbarga district, the source said........
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