The upcoming budget session may see a proposal to set up a gold bank under Reserve Bank of India, India's central bank, a report that has been published in the South Indian daily, Malayala Manorama speculated. The proposal can be traced back to the 1992 budget presented in the Parliament, but which eventually gathered dust..............
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Tuesday, February 5, 2013
Title conferred on Sanskrit scholar
.......A former officer of Reserve Bank of India, Sri Sastrigal possessed a sound knowledge of the Rig Veda and the bhashyam in Rig and Yajurveda. He passed the Sahitya, Nyaya, and Mimamsaand Vedanta Siromani degrees, obtained doctorate degree from Rashtriya Sanskrit Sansthan in recognition of his contribution to Advaita Vedanta.................
Issue of Rs 5 coins to commemorate the occasion of 150 years of Kuka Movement
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| A great patriot remembered Union Finance Minister P. Chidambaram releasing a commemorative coin on Satguru Ram Singh in New Delhi on Friday to mark the 150 years of the Kuka Movement |
Bond yields inch up on RBI deputy governor's comment on HTM cut
Benchmark 10-year bond yield is up 1 basis point at 7.92 per cent following RBI Deputy Governor H.R. Khan's comment that the RBI looking to cut the held-to-maturity ratio of banks from April. .........
Raise banks' provisioning to recast loans: Sinha
......“What we have issued are the draft guidelines. So let us what the response is. The timing is something which can be looked into,” Sinha said. “But the fact is that provisioning will have to be increased.”..........
RBI delivers beyond expectation yet market in bearish mode
....RBI delivered to expectations on rates with 25 bps cut and surprised the market with 25 bps CRR cut but lack of optimism (and confidence) in RBI’s tone (and guidance) drove asset markets into bearish mode............
RBI treads with care and caution
......Banks want that they should be freed of the burden to collect taxes on interest earnings. If that is done, more funds would flow in. If deposit rates are to remain at around six to eight per cent, lending rates have to remain at least two percentage points higher than that. Can a slowing economy afford that? Possibly not. But it also calls for taking steps that are beyond the purview of the RBI. During last over three years little has been done to pep up the economy and check prices. The RBI is rightfully apprehensive of an economy that shows little growth.
My View on "RBI asks banks to beef up wage hike, pension provisioning"
The next wage settlement in banking industry will have to factor in, among other things, the following ground level realities:
i) After the introduction of New Pension System (NPS), there are two categories of employees in banks. The claims of employees covered by NPS for higher wages factoring in the reduction in real wages on account of subscription to NPS and the need to save more to ensure income comparable to the pension available to the employees who joined earlier than them are genuine.
ii) Industry parity. Workmen staff/Officers doing similar work in different categories of banks will have to be given comparable wages, additional compensation being provided for extra work.
iii) Outsourcing. Let us not forget Maruti experience. Employees who are on regular employment of banks, even on contract, will have to be given clarity about their absorption in the institutions and a living wage till then. Circumventing labour laws is not in the long term interest of industry.
iv) Institutions will have to revisit the recruitment policy (right from basic qualifications needed), career progression (traditional path is no more relevant or practical) and placement policy (rural posting, need for special skills etc.)
Centre should perhaps consider a quick review by a national level expert group with a view to providing some broad policy guidelines to be followed by industries across public and private sectors, while negotiating wage structure. Transparency in policy will go a long way in reducing sporadic eruptions emanating from suppression of genuine human needs.
- M G Warrier, Thiruvananthapuram
Common man’s “guzaarish, khwahish, farmaish” to the FM on the ensuing budget!
.....The most deserved gift the FM can give to the banking public before the venerable former governor of RBI and the present PM Manmohan Singh lays down his office next year is to totally abolish TDS (tax deducted at source) on bank interest, as it is the most obnoxious of all regulations of the Income Tax department. Despite all the goading by RBI to banks, even today, majority of banks do not bother to send the TDS certificates to their customers every quarter as required by law, unless one demands for it. At present tax is deducted at source on bank interest paid in excess of Rs10,000 per year.......
Senior citizens and FDs
....Ideally, such instructions with industrial and social implications should have been issued through the Reserve Bank of India (RBI) after due deliberations. North Block appears to be unaware of how interest rates evolved to the present stage. At the time of retirement in the early 1990s, retirement benefits deposited in banks or post offices gave a return of 12 per cent per annum. Now, the return has come down by 20 to 30 per cent. Hence, the 50 to 100 basis points of additional interest on deposits of senior citizens was instructed to be paid by banks by the RBI.........
Microfinancing serves to make poor poorer
.....The microfinance movement is suspect because virtually no discussion is made of the rate of profit on the deployed loans. It is implicitly assumed that the rate of profit will be higher than the rate of interest. But this assumption has no basis whatsoever. Rather, it is seen that people in the villages often deposit their savings at low rates of interest of about 5- 7 per cent in fixed deposits with the banks. They would scarcely do so if they could earn more than 30 per cent from the same money by opening a shop or establishing a mini rice mill. It is also seen that the price of many items produced by the poor, such as paper envelopes, candles, buttermilk and vegetables, is falling. The microfinance movement becomes an instrument of expansion of poverty in this background of declining prices and rates of profit. The poor become poorer because they have to pay out a part of their meagre earnings as interest to the banks. Mr. Mohammed unus and Dr Manmohan Singh, both do not talk about the prices of commodities made by the poor.........
Not fair
It is time for banks to reduce lending rates across the board
................Around 50 per cent of the total deposits are bulk deposits, which are driven by market rates. HDFC Bank, the second biggest private lender, decided to selectively cut rates. A day after the RBI announcement, HDFC Bank cut interest rates in auto segment for the benefit of new customers alone — by 25 basis points for cars and trucks and by 50 basis points for two wheelers. In effect, RBI’s effort for a lower interest rate regime is stuck mid-way. It is time for banks to reduce lending rates across the board and step up lending.
Post-policy blues
.........The RBI has cut the policy rate and infused some liquidity in the economy. It has, however, been cautious about promising much more. Companies that face an immediate escalation in costs, thanks to higher fuel prices and rising wages, know that a small reduction in borrowing rates will not compensate for this. Nor will it goad Indian bureaucrats to take decisions faster. The central bank has emphasised “non-monetary” factors as the key constraint to growth and I doubt if any Indian entrepreneur will disagree with this prognosis..........
Inappropriate utilisation, lack of awareness about schemes causing concern
Though the Union Government and RBI had come out with a plethora of fiscal and monetary benefits to boost the exports, its inappropriate utilisation and also lack of adequate awareness to extract the maximum out of the incentives in Tirupur knitwear cluster are causing concern...........
SBI says can’t issue fixed-rate loans
State Bank of India (SBI), the country’s largest lender, has no intention of offering fixed-rate loan products as proposed by the Reserve Bank of India (RBI). The central bank had released a report last month, listing out suggestions to help banks introduce such products.........
NSE to spread financial literacy; signs pact with Gitam varsity
The country is badly in need of trained personnel in stock market trading to guide the investors and National Stock Exchange (NSE) is tying up with universities to offer specialised courses in financial markets, according to G.C Sharma, Head, Financial Education of NSE.......
FinMin to assess progress of financial inclusion, DBT schemes
..........Among others, the meeting will take stock of the progress achieved in seeding the unique identification ‘Aadhaar’ number in banks accounts; details of bank account and Aadhaar received from various ministries/departments; and steps for strengthening banking infrastructure, including opening new bank branches, installation of onsite ATMs, mobile banking, and so on.
NABARD credit proposals released
..........Mr. Sampath said that based on NABARD projections, the Lead Bank in the district would prepare the Annual Credit Plan. He underscored the point that the ACP would encourage farmers to take to horticulture crops in a significant manner in the district. He called upon all bankers to extend their cooperation in realising the goals to be set in the Annual Credit Plan. NABARD Deputy General Manager A. Balachandran, DGM of Indian Bank S. Natarajan, and District Development Officer (Reserve Bank of India) J. Kandasamy were present.
Doubling of food production crucial before 2020: RBI
.....RBI Governor while unveiling the quarterly monetary policy expressed concern over the contrarian behaviour of food inflation which moved into double digits in December 2012, ‘reflecting both cyclical and structural factors’. During the period even though headline inflation rate fell to 7.2%, food inflation remained high, revealing.......
Read........
FM to sweeten home loans with tax break
Finance minister P Chidambaram may have good news for home loan
borrowers in the union budget for the financial year 2013-14 to be
presented later this month. The government is considering hiking the tax
deduction limit on home loan interest from the present Rs. 1.5 lakh to
more than Rs. 2 lakh per annum........
Chidambaram offers help for Repco Bank
.....Inaugurating its new branches and training centres here on Saturday, the Minister said that it was a matter of regret that when all other banks came under his control, the Repco Bank was governed by the Ministry of Home Affairs. It should develop in a phased manner and become full-fledged like the Pandian Grama Bank, Indian Bank and Indian Overseas Bank, he said and offered to take up the issue with the Reserve Bank of India (RBI).........
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